1. We have audited the attached Balance Sheet of Bata India Limited
(the Company) as at December 31,2009 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. Furtherto 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 it 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, 2009, and taken on recordby the Board of
Directors, we report that none of the directors is disqualified as on
December 31, 2009 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 affair so the
Company as at December 31,2009;
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) 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 (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) to4(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.
During the course of our audit, we have not observed any continuing
failure to correct major weakness in internal control system of the
company.
(v) (a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Act that need to be
entered into the register maintained under section 301 have been so
entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements exceeding value of Rupees five lakhs have been entered
into during the financial year at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
(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 it have
generally been regularly deposited with the appropriate authorities.
Further, since the Central Governent has till date not prescribed the
amount of cess payable under section 441 A of the Companies Act, 1956,
we are not in a position to comment upon the regularity or otherwise of
the company in depositing the same
(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 MRP-Tax on tax case 16,480
Sales Tax Acts
Various State Purchase Tax Dispute at 5,100
Sales Tax Acts 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 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)
Name of the Period to Forum where
statue which the dispute is
amount relates pending
Various State
Sales Tax Acts 1987-88 to Sales Tax Tribunal
2001 -02 Appellate Authority,
Tamilnadu
Various State
Sales Tax Acts 1984-85 Supreme Court
Various State
Sales Tax Acts 1994-95 CESTAT, Kerala
1998-99
1999-00
2000-01
Various State
Sales Tax Acts 1991-92 High Court, UP
Various State 2002 CESTAT, Kolkata
Sales Tax Acts
Various State 1985-87 High Court
Sales Tax Acts
Central Excise
Act, 1944 1987-88 CCE(Appeals)
Kolkata
Central Excise
Act, 1944 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 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 Excise duty demanded on 5,040
Act, 1944 parts of footwear used
captively in manufacture
of exempted footwear
Central Excise Central Excise Duty Demanded 5,100
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
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 7,470
Act,1944 @ 40% on MRP for
Institutional Sales. Sale of
Industrial Boots & Mines
Safety Boots.
Central Excise Demand for alleged non
reversal 5,440
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
Name of the Period to Forum where
Statue which the dispute is
amount relates pending
Central Excise
Act, 1944 1997-1999 Commissioner of
Central Excise,
Chennai
Central Excise
Act, 1944 2005 Commissioner,
CCE Kolkata
Central Excise
Act, 1944 1995-97 CESTAT-Chennai
Central Excise
Act, 1944 2004-05 Additional
Commissioner of
Central Excise
Kolkata
Central Excise
Act, 1944 2004 CESTAT-Kolkata
Central Excise
Act, 1944 2004-05 Commissioner
(Appeal) Kolkata.
Central Excise
Act, 1944 2006 CESTAT, Kolkata
2007
2008
Central Excise
Act, 1944 2007 Commissioner,
Kolkata.
Name of the Nature of dues Amount (Rs
statute in thousand)
Central Excise Non compliance of the
condition 21,480
Act, 1944 of the notification for marking
MRP on factory seconds
cleared on payment of
appropriate C.E. duty.
Central Excise Exclusion of sales tax @ 8% 1,500
Act, 1944 for payment of an amount
equal to 8%/10% on exempted
footwear as per CCR
6(3)(b).
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
Name of the Period to Forum where
Statue which the dispute is
amount relates pending
Central Excise
Act, 1944 2008 CESTAT, Kolkata
Central Excise
Act, 1944 2009 Additional
Commissioner of
Central Excise-
Kolkata
Customs
Act, 1942 2001 Deputy
Commissioner of
Customs
Customs
Act, 1942 1998-2003 CESTAT-Kolkata
Customs
Act, 1942 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 bank. The Company had
no outstanding dues in respect of debenture holders and financial
institutions. I
(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) The Company has not raised any money by way of public issue during
the year.
(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.
For S.R. BATLIBOI & CO.
Chartered Accountants
per Rajiv Goyal
Place: Gurgaon Partner
Date : 24th February, 2010 Membership No.: 94549
