1. We have audited the attached Balance Sheet of Bata India Limited
(the Company) as at December 31, 2008 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 Companys 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 (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, 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, 2008, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
December 31, 2008 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 31,2008;
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.
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) All fixed assets have not been physically verified by the
management during the year but there is a regular program of
verification which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. As informed, no
material discrepancies were noticed 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 (Auditors
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 (Auditors
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, no major weakness has been
noticed in the internal control system in respect of these areas.
(v) (a) According to the information and explanations provided by the
management, we are of the opinion that there are no transactions that
need to be entered into 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 order 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, 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 if have
generally been regularly deposited with the appropriate authorities
though there has been a slight delay in a few cases.
(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 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 information and explanation given to us and
records of the Company, there are no dues of income-tax, sales-tax,
wealth-tax, service tax, customs duty, excise duty and cess which have
not been deposited on account of any dispute, other than following:
Name of the Nature of dues Amount (Rs
statute In thousand)
Various State Demand against 4,500
Sales Tax Acts contract sale
Various State Goods Seizure Case 730
Sales Tax Acts
Various State MRP-Tax on tax case 16,480
Sales Tax Acts
Various State Purchase Tax Dispute 5,100
Sales Tax Acts at Faridabad
Various State Revenue recovery against 6,700
Sales Tax Acts non payment of demand
in assessment
Various State Tax in dispute u/s 92 of 2,780
Sales Tax Acts Central Sales tax Act
regarding non-submission
of forms
Various State Penalty for non payment 1,200
Sales Tax Acts of tax and non collection
on C forms
Various State Demand raised in Assessment 2,800
Sales Tax Acts order for non submission of
declaration form.
Various State Appeal Against 1,400
Sales Tax Acts Assessment Order
Central Excise Excise Duty demand on 1,500
Act, 1944 closing balance of
exempted footwear.
Central Excise Excise duty on 18,970
Act, 1944 double textured
fabric(rubberized textile)
Period to Forum where
which the dispute is
amount relates pending
2001 DC, Kolkata
1997-98 High Court Jaipur
1987-88 to Sales. Tax Tribunal
2001-02 Appellate
Authority, Tamilnadu
1984-85 Supreme Court
1994-95 CESTAT, Kerala
1998-99
1999-00
2000-01
1991-92 High Court, UP
2002 CESTAT, Kolkata
2003 Assisstant
Commssioner, Sales
Tax ,West Bengal
1985-87 High Court
1987-88 CCE(Appeals)
Kolkata
1990-1994 Supreme Court
Name of the Nature of dues Amount (Rs
statute in thousand)
Central Excise Duty demanded for sale of 7,030
Act, 1944 footwear at domestic Tariff area
of which final hearing before
commissioner concluded
and order is pending.
Central Excise Central Excise duty demanded 320
Act,1944 on clearance of microsheet
from the factory without payment
of duty and observance
of Central Excise
procedure/formalities
Central Excise For refund of Modvat 670
Act, 1944 Credit erroneously
refunded.
Central Excise Duty demanded on various 870
Act, 1944 chemicals used for
processing of leather and
subsequent clearance of said
processed leather for
manufacture of footwear
(Exempted)
Central Excise Disallowance for trade 2,750
Act, 1944 discount for sale of
footwear to retail outlet
Central Excise Demand of duty on Parts 51,420
Act, 1944 ot footwear, which were received
from job worker after processing
and used in manufacture
of exempted footwear
by the company
Central Excise Reversal of MODVAT/ 12,360
Act, 1944 CENVAT credit wrongly
availed by the Company
Central Excise Excise duty demanded on 5,040
Act, 1944 parts of footwear used
captively in manufacture
of exempted footwear
Central Excise Central Excise Duty Demanded 6,730
Act, 1944 for clearance of Defective
Footwear without payment of
Central Excise Duty, after
necessary re-processing of
said footwear. The process
treated as MANUFACTURE
Period to Forum where
which the dispute is
amount relates pending
1997-1999 Commissioner of
Central Excise,
Chennai
1994-95 Commissioner of
Central Excise,
Kolkata
2004 Additional
Commissioner,
Bangalore
2005 Commissioner,
CCE Kolkata
1995-97 CESTAT-Chennai
2004 CESTAT-Kolkata
2004 CESTAT-Kolkata
2004-05 Additional
Commissioner of
Central Excise
Kolkata
2004 CESTAT-Kolkata
Name of the Nature of dues Amount (Rs
statute in thousand)
Central Excise Excise duty demanded 18,790
Act,1944 for movement of raw
material to job worker
without payment of duty
Central Excise Disallowing of abatement 4,250
Act,1944 @ 40% on MRP for
Institutional Sales. Sale of
Industrial Boots & Mines
Safety Boots.
Central Excise Demand tor alleged non reversal 2,770
Act, 1944 of CENVAT credit on ceveted
inputs and non payment of CE
duty on finished goods
on written off stock as
per Balance sheet
Customs Duty demand on account of 10,340
Act, 1942 short levy of customs duty
(anti dumping duty) for
which hearing before
commissioner concluded
and the order received.
Customs Wrong availment of 83,760
Act, 1942 concessional rate of
customs duty etc. against
which the hearing has not
finalized as yet
Customs Adv. License No. P/W/3497630 100
Act, 1942 dt. 7.2.94
Period to Forum where
which the dispute is
amount relates pending
2004-05 Commissioner
(Appeal) Kolkata.
2006 CESTAT, Kolkata
2007 Commissioner,
Kolkata.
2001 Deputy
Commissioner of
Customs
1998-2003 CESTAT-Kolkata
2002 DGFT, Kolkata
(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) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a financial
institution, bank. The Company have no outstanding dues in respect of
debenture holders.
(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 (Auditors 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 (Auditors 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) Based on information and explanations given to us by the
management, the Company did not obtain any term loan 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) In previous years, the Company has raised money from issue of
equity shares offered on right basis to existing shareholders. We have
verified that the end use of balance money is as disclosed in the Note
No. 21 of schedule 22 to financial statements.
(xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the course of our audit except as mentioned below:
Nature Rs. In Thousands
Cash and Stock Shortage at various Rs.3,952 suitable action taken and
locations appropriately accounted for
For S.R. BATLIBOI & CO.
Chartered Accountants
per Rajiv Goyal
Place : Gurgaon Partner
Date : 27th February, 2009 Membership No.: 94549
