We have audited the accompanying financial statements of Bata India
Limited (the Company), which comprise the Balance Sheet as at
December 31, 2013, and the Statement of Profit and Loss and Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
accounting principles generally accepted in India, including the
Accounting Standards notified under the Companies Act, 1956 read with
General Circular 15/2013 dated 13th September 2013, issued by the
Ministry of Corporate Affairs, in respect of Section 133 of the
Companies Act, 2013. This responsibility includes the design,
implementation and maintenance of internal control relevant to the
preparation and presentation of the financial statements that give a
true and fair view and are free from material misstatement, whether due
to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances but not for the
purpose of expressing an opinion on the effectiveness of the entity''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Companies Act, 1956 (the Act) 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, 2013;
(b) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 (the
Order) issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, 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 purpose 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, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
(d) In our opinion, the Balance Sheet, the Statement of Profit and
Loss, and the Cash Flow Statement comply with the Accounting Standards
notified under the Companies Act, 1956 read with General Circular
15/2013 dated 13th September 2013, issued by the Ministry of Corporate
Affairs, in respect of Section 133 of the Companies Act, 2013;
(e) On the basis of written representations received from the directors
as on December 31, 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on December 31, 2013, from
being appointed as a director in terms of clause (g) of sub-section (1)
of section 274 of the Companies Act, 1956.
Annexure referred to in paragraph 3 of our report of even date Re: Bata
India Limited (''the Company'')
(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) According to the information and explanations given to us,
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. Accordingly, the
provisions of clause 4(iii) (a) to (d) of the Companies (Auditor''s
Report) Order, 2003 (as amended) (the order) are not applicable to the
Company and hence not commented upon.
(b) According to the information and explanations given to us, 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. Accordingly, the provisions of clause
4(iii) (e) to (g) of the Companies (Auditor''s Report) Order, 2003 (as
amended) (the order) are not applicable to the Company and hence not
commented upon.
(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 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. Accordingly, the provisions of clause 4(v)(b) of
the Order is not applicable to the Company and hence not commented
upon.
(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 of the company 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) The Company is regular in depositing with appropriate
authorities 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 applicable to it.
(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.
million) which the dispute is
amount
relates pending
Various State Purchase Tax
Dispute at 6.2 1984-85 Supreme Court
Sales Tax Acts Faridabad
Various State Revenue recovery
against 4.3 1994-95 STAT, Kerala
Sales Tax Acts non-payment of
demand 1998-99
in assessment 1999-00
2000-01
Various State Tax in dispute
u/s 92 of 2.8 1991-92 High Court, UP
Sales Tax Acts Central Sales
Tax Act
regarding non-
submission of
forms
Various State Misclassifi
cation of
Article 9.68 2005-06 to VAT Tax Tribunal,
Sales Tax Acts for VAT Payment 2006-07 Kerala
Central Excise Excise Duty
demand on 1.50 1987-88 CESTAT-Kolkata
Act, 1944 closing balance
of exempted
footwear.
Central Excise Duty demanded
for sale 7.03 1997-1999 Commissioner of
Act, 1944 of footwear at
domestic Central Excise,
tariff area of
which final Chennai
hearing before
commissioner
concluded and
order is pending
Karnataka Disallowance of
adjustment of 2.8 2005-06 to Joint
Commissioner
Sales Tax Act unclaimed tax
credit 2008-09 Appeals
Central Excise Disallowance
for trade 2.75 1995-97 CESTAT-Chennai
Act, 1944 discount for
sale of
footwear to
retail outlet
Central Excise Excise duty
demanded for 15.56 2004-05 CESTAT-Kolkata
Act, 1944 movement of raw
material 2005-06
to job worker
without payment
of duty
Central Excise Disallowing of
abatement 9.00 2007 CESTAT, Kolkata
Act,1944 @ 40% on MRP
for 2008
Institutional
Sales. Sale of 2009
Industrial Boots
& Mines 2010
Safety Boots.
Central Excise Non compliance
of the 21.48 July 2004
to CESTAT, Kolkata
Act, 1944 condition of
the
notification Jan 2008
for marking
MRP on factory
seconds
cleared on
payment of
appropriate
C.E duty.
Central Excise Exclusion of
sales tax 3.00 August
2004 to CESTAT, Kolkata
Act, 1944 @ 8% for
payment of
an Jan 2008
amount equal
to 8% /10%
on exempted
footwear as
per CCR 6(3)
(b).
Finance Act, Disallowance
of Service
tax 4.34 2006-2010 Commissioner of
1994 Credit on input
service Central Excise,
availed for
outward Kolkata
transportation
Customs Act, Duty demand on
account of 10.34 2001 CESTAT-Kolkata
1942 short levy of
customs duty
(anti dumping
duty) for
which
hearing
before
commissioner
concluded
and the order
received.
Finance Act, Availment of
wrong input 86.2 April
2008 to CESTAT, Chennai
1994 service tax
credit May 2012
Customs Act, Wrong availment
of 81.20 1998-2003 CESTAT-Kolkata
1942 concessional
rate of customs
duty etc.
against which
the hearing
has not
finalized as
yet
Income Tax Short term
capital gains 230.55 2007-08 High Court,
Kolkata
Act, 1961
Income Tax Disallowance
of certain 13.67 2008-09 Commissioner of
Act, 1961 expenditure (A.Y. 2009
-10) Income tax
(Appeal)
(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
4(xi) of the Order not applicable, hence not commented upon.
(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 Order 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 Order 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) During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
material fraud on or by the Company, noticed or reported during the
year, nor have we been informed of any such case by the management.
For S.R. Batliboi & Co. LLP
ICAI Firm Registration No.: 301003E
Chartered Accountants
per Rajiv Goyal
Place of Signature : Gurgaon Partner
Date: February 12, 2014 Membership No.: 94549
