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Bata India Ltd.

BSE: 500043 Sector: Others
NSE: BATAINDIA ISIN Code: INE176A01028
BSE 13:49 | 25 Mar 1336.00 -24.30
(-1.79%)
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1368.40

HIGH

1368.40

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1335.00

NSE 13:39 | 25 Mar 1334.45 -27.20
(-2.00%)
OPEN

1361.00

HIGH

1361.00

LOW

1334.40

OPEN 1368.40
PREVIOUS CLOSE 1360.30
VOLUME 9581
52-Week high 1383.75
52-Week low 690.00
P/E 58.52
Mkt Cap.(Rs cr) 17,170
Buy Price 1334.45
Buy Qty 113.00
Sell Price 1335.25
Sell Qty 84.00
OPEN 1368.40
CLOSE 1360.30
VOLUME 9581
52-Week high 1383.75
52-Week low 690.00
P/E 58.52
Mkt Cap.(Rs cr) 17,170
Buy Price 1334.45
Buy Qty 113.00
Sell Price 1335.25
Sell Qty 84.00

Bata India Ltd. (BATAINDIA) - Auditors Report

Company auditors report

Report on the Audit of the standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statementsof Bata India Limited ("the Company") which comprise the Balance Sheet as at 31March 2018 the Statement of Profit and Loss the Statement of Changes in Equity and theStatement of Cash Flows for the year then ended and summary of the significant accountingpolicies and other explanatory information.

Management's Responsibility for the standalone Ind AS FinancialStatements

The Company's Board of Directors is responsible for the matters statedin Section 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these standalone Ind AS financial statements that give a true and fair viewof the state of affairs profit/loss and other comprehensive income changes in equity andcash flows of the Company in accordance with the accounting principles generally acceptedin India including the Indian Accounting Standards (Ind AS) prescribed under section 133of the Act.

This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone Ind AS financial statements that give a true and fair view and are freefrom material misstatement whether due to fraud or error.

In preparing the financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone Ind ASfinancial statements based on our audit.

We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made thereunder.

We conducted our audit of the standalone Ind AS financial statements inaccordance with the Standards on Auditing specified under Section 143(10) of the Act.Those Standards require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether the standalone Ind AS financialstatements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence aboutthe amounts and the disclosures in the standalone Ind AS financial statements. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the standalone Ind AS financial statements whether dueto fraud or error. In making those risk assessments the auditor considers internalfinancial control relevant to the Company's preparation of the standalone Ind ASfinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the standalone Ind AS financial statements.

We are also responsible to conclude on the appropriateness ofmanagement's use of the going concern basis of accounting and based on the audit evidenceobtained whether a material uncertainty exists related to events or conditions that maycast significant doubt on the entity's ability to continue as a going concern. If weconclude that a material uncertainty exists we are required to draw attention in theauditor's

report to the related disclosures in the financial statements or ifsuch disclosures are inadequate to modify the opinion. Our conclusions are based on theaudit evidence obtained up to the date of the auditor's report. However future events orconditions may cause an entity to cease to continue as a going concern.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the standalone Ind AS financialstatements.

Opinion

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone Ind AS financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at 31 March 2018 its profit and other comprehensive incomechanges in equity and its cash flows for the year ended on that date.

Other Matter

The comparative financial information of the Company for the year ended31 March 2017 prepared in accordance with Ind AS included in these standalone Ind ASfinancial statements have been audited by the predecessor auditor. The report of thepredecessor auditor on the comparative financial information dated 15 May 2017 expressedan unmodified opinion.

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government in terms of Section 143(11) ofthe Act we give in "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act we report that:

a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss the Cash FlowStatement and Statement of Changes in Equity dealt with by this Report are in agreementwith the books of account.

d) In our opinion the aforesaid standalone Ind AS financial statementscomply with the Indian Accounting Standards prescribed under section 133 of the Act.

e) On the basis of the written representations received from thedirectors as on 31 March 2018 taken on record by the Board of Directors none of thedirectors is disqualified as on 31 March 2018 from being appointed as a director in termsof Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls withreference to financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure B".

g) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its Standalone Ind AS financial statements. (Refer note 32 to theInd AS financial statements).

ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.

iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.

iv. The disclosures in the financial statements regarding holdings aswell as dealings in specified bank notes during the period from 8 November 2016 to 30December 2016 have not been made since they do not pertain to the financial year ended 31March 2018.

For B S R & Co. LLP

Chartered Accountants ICAI Firm Registration Number: 101248W/W-100022

Tarun Gupta

Partner

Membership No.: 507892

Place : Gurugram Date : 22 May 2018

Annexure A referred in the Independent Auditor's Report to the Membersof Bata India Limited on

the standalone Ind AS financial statements for the year ended 31 March2018

(i) (a) According to the information and explanations given to us theCompany has maintained proper

records showing full particulars including quantitative details andsituation offixed assets.

(b) According to the information and explanations given to us thefixed assets are physically verified by the management in accordance with a phasedprogramme designed to cover all items of fixed assets over a period of three years whichin our opinion is reasonable having regard to the size of the Company and nature of itsfixed assets. Pursuant to the programme a portion of the fixed assets has been physicallyverified by the management during the year. As informed to us no material discrepancieswere observed on such verification.

(c) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of theimmovable properties included in the fixed assets are held in the name of the Company.

(ii) According to the information and explanations given to us theinventories (excluding stocks with third parties and goods-in-transit) have beenphysically verified during the year by the management. For goods in transit in respect ofpurchase and sales of material all material is substantially received or delivered untilthe date of issuance of this report. In respect of inventories lying with third partiesthese have substantially been confirmed by them. In our opinion the frequency ofverification is reasonable. Further as informed the discrepancies noticed onverification between the physical inventory and the book records were not material.

(iii) According to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms limitedliability partnerships or other parties covered in the register maintained under Section189 of the Act. Accordingly paragraph 3(iii) of the Order is not applicable.

(iv) According to the information and explanations given to us theCompany has not given any loans or made any investments or provided any guarantee orsecurity as specified under Section 185 and 186 of the Companies Act 2013. Accordinglyparagraph 3(iv) of the Order is not applicable.

(v) According to the information and explanations given to us theCompany has not accepted any deposits covered under Section 73 to 76 of the Act.

(vi) According to the information and explanations given to us theCentral Government has not specified the maintenance of cost records under Section 148(1)of the Companies Act 2013 for the products of the Company.

(vii) (a) According to the information and explanations given to us andon the basis of our examination of

the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including Provident Fund Employees' StateInsurance Income tax Sales tax Service tax Duty of Customs Duty of Excise Goods andServices Tax ('GST') Value Added Tax Cess and any other material statutory dues to theextent applicable have generally been regularly deposited with the appropriateauthorities during the year.

According to the information and explanations given to us noundisputed amounts payable in respect of Provident Fund Employees' State InsuranceIncome tax GST Sales tax Service tax Duty of Customs Duty of Excise Value Added taxCess and other material statutory dues to the extent applicable were in arrears as at 31March 2018 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and onthe basis of the records of the Company examined by us there are no dues of Income-taxSales-tax Service tax Duty of Customs Duty of Excise and Value Added Tax which have notbeen deposited with the appropriate authorities on account of any dispute except asmentioned below:-

Name of the Statute Nature of dues

Amount of demand * (in INR millions)

Period to which the amount relates

Forum where dispute is pending

Various state sales tax Acts Purchase tax dispute at Faridabad

8.2

1984-1985

Supreme Court

Various state sales tax Acts Revenue Recovery against non-payment of demand in assessment

6.7

1994-1995 1998-1999 2000-2001

STAT Kerala

Various state sales tax Acts Tax in dispute u/s 92 of Central Sales Tax act regarding non submission of forms.

2.8

1991-1992

High Court (Uttar Pradesh)

Karnataka Sales Tax Act Unclaimed input tax credit adjusted against VAT

4.1

2005 - 2006 to 2008 - 2009

Joint Commissioner's Appeal

Various State Sales Tax Acts Misclassification of Article for VAT payment

9.7

2005-06 to 2006-07

VAT for tribunal Kerala

Central Excise Act1944 Excise duty demand on closing balance of exempted footwear

1.5

1987-88

CESTAT- Kolkata

Central Excise Act1944 Duty demanded for sale of footwear at domestic tariff area which final hearing before commissioner concluded and order is pending.

7.0

1997-99

Commissioner of Central Excise Chennai

Central Excise Act1944 Excise duty demanded for movement of raw material to job worker without payment of duty

15.5

2004-05 to 2005-06

CESTAT-Kolkata

Central Excise Act1944 Disallowing abatement @ 40% on MRP for institutional sales. Sale of Industrial Boots and Mine Safety Boots.

9.0

2007 2008 2009 2010

CESTAT-Kolkata

Central Excise Act1944 Non-compliance of the condition of the notification for marking MRP on factory seconds cleared on payment of appropriate C.E. duty

21.5

July 2004 to Jan 2008

CESTAT-Kolkata

Central Excise Act1944 Exclusion of Sales tax @8% for payment of an amount equal to 8%/10% on exempted footwear as per CCR 6(3)(b)

3.0

August 2004 to Jan 2008

CESTAT-Kolkata

Finance Act 1994 Disallowance of service tax input credit on input service availed for outward transportation

4.3

2006-2010

Commissioner of Central Excise Kolkata

Customs Act1942 Duty Demand on account of short levy of customs duty (antidumping duty) for which hearing before commissioner concluded and order received

10.8

2001

CESTAT- Kolkata

Finance Act 1994 Availment of wrong input service tax credit

86.2

April 2008 to May 2012

CESTAT- Chennai

Customs Act1942 Wrong availment of concessional rate of customs duty etc. against which the hearing has not been finalised as vet.

83.8

1998-2003

CESTAT- Kolkata

Income Tax Act1961 Disallowance of certain expenditure

293.1

AY 2011-2012 AY 2012-2013 & AY 2014-2015

Commissioner of Income Tax (Appeal) Kolkata

* Amount as per demand orders including interest and penalty whereverindicated in the order.

(viii) According to the information and explanations given to us theCompany has neither taken any loans from financial institutions or banks or government norissued any debentures therefore the provision of clause (viii) of the Order is notapplicable.

(ix) According to the information and explanations given to us theCompany has not raised any money by way of initial public offer or further public offer(including debt instrument) and any term loans during the year. Accordingly paragraph 3(ix) of the Order is not applicable.

(x) According to the information and explanations given to us nomaterial fraud by the Company or on the Company by its officers or employees has beennoticed or reported during the year.

(xi) According to the information and explanations given to us andbased on our examination of the records of the Company the managerial remuneration hasbeen paid or provided by the Company in accordance with the provisions of Section 197 readwith Schedule V to the Act.

(xii) According to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order is notapplicable.

(xiii) According to information and explanations given to us and on thebasis of our examination of the records of the Company all transactions with the relatedparties are in compliance with Section 177 and 188 of the Act where applicable and thedetails have been disclosed in the Ind AS financial statements as required by theapplicable accounting standard.

(xiv) According to information and explanations given to us and on thebasis of our examination of the records of the Company the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year. Accordingly paragraph 3(xiv) of the Order is not applicable.

(xv) According to information and explanations given to us the Companyhas not entered into any non-cash transactions with directors or persons connected withhim. Accordingly paragraph 3(xv) of the Order is not applicable.

(xvi) According to information and explanations given to us theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934. For B S R & Co. LLP

Chartered Accountants ICAI Firm Registration Number: 101248W/W-100022

Tarun Gupta

Partner

Membership No.: 507892

Place : Gurugram Date : 22 May 2018

Annexure B referred in the Independent Auditor's Report to the Membersof Bata India Limited on the standalone Ind AS financial statements for the year ended 31March 2018

Report on the Internal Financial Controls under Clause (i) ofSub-section (3) of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls with reference tofinancial statements of Bata India Limited ("the Company") as of 31 March 2018in conjunction with our audit of the standalone Ind AS financial statements of the Companyfor the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control with reference tofinancial statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on 'Audit of Internal FinancialControls over Financial Reporting' issued by the Institute of Chartered Accountants ofIndia ('ICAI'). These responsibilities include the design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company'sinternal financial controls with reference to financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note on 'Audit of Internal FinancialControls Over Financial Reporting' (the "Guidance Note") and the Standards onAuditing issued by ICAI and deemed to be prescribed under section 143(10) of the Act tothe extent applicable to an audit of internal financial controls both issued by the ICAI.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to financial statements was established and maintainedand if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system with reference to financialstatements and their operating effectiveness. Our audit of internal financial controlswith reference to financial statements included obtaining an understanding of internalfinancial controls with reference to financial statements assessing the risk that amaterial weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system with reference to financial statements.

Meaning of Internal Financial Controls with reference to FinancialStatements

A company's internal financial control with reference to financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles. A company's internalfinancial control with reference to financial statements includes those policies andprocedures that (1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany; (2) provide reasonable assurance that transactions are recorded as necessary topermit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorisations of management and directors of the company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorisedacquisition use or disposition of the company's assets that could have a materialeffect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference toFinancial Statements

Because of the inherent limitations of internal financial controls withreference to financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to financial statements to future periods are subject to the riskthat the internal financial control with reference to financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequateinternal financial controls system over financial statements and such internal financialcontrols with reference to financial statements were operating effectively as at 31 March2018 based on the internal control with reference to financial statements criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note issued by the ICAI.

For B S R & Co. LLP

Chartered Accountants ICAI Firm Registration Number: 101248W/W-100022

Tarun Gupta

Partner

Membership No.: 507892

Place : Gurugram Date : 22 May 2018