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Directors Report of Bata India Ltd.
Mar 31, 2025
Your Directors are pleased to present the 92nd Annual Report covering the operational and financial performance of your Company along with the Audited Financial Statements for the financial year ended March 31, 2025.
FINANCIAL HIGHLIGHTS & PERFORMANCE
|
(Rs. in Million) |
||
|
Particulars |
Financial Year ended on March 31, 2025 |
Financial Year ended on March 31, 2024 |
|
(Audited) |
(Audited) |
|
|
Revenue from operations |
34,880.26 |
34,784.13 |
|
Other Income |
650.92 |
614.73 |
|
Total Income |
35,531.18 |
35,398.86 |
|
Profit before exceptional item |
3,005.73 |
3,895.32 |
|
Exceptional Item |
(1,231.68) |
409.00 |
|
Profit before Taxation |
4,237.41 |
3,486.32 |
|
Provision for Taxation |
952.92 |
887.07 |
|
Net Profit |
3,284.49 |
2,599.25 |
|
Other Comprehensive Income (net of tax) |
1.75 |
(3.16) |
|
Total Comprehensive Income |
3,286.24 |
2,596.09 |
Your Company has prepared the Financial Statements for the financial year ended March 31, 2025, in terms of Sections 129, 133 and other applicable provisions, if any, of the Companies Act, 2013 (as amended) (the âActâ) and Schedule III thereto read with the Rules framed thereunder.
During the financial year ended March 31, 2025, your Company achieved a turnover of Rs. 34,880.26 Million as compared to the turnover of Rs. 34,784.13 Million recorded during the previous financial year ended March 31, 2024, registering a growth of 0.28%. Your Company successfully completed sale of a closed manufacturing unit and made a one-time gain (net of related expenses) of Rs. 1,339.52 Million during the year under review. The exceptional item include Rs. 107.84 Million towards a Voluntary Retirement Scheme (VRS), introduced at one manufacturing unit, during the financial year ended March 31, 2025. There was an exceptional item of Rs. 409.00 Million towards VRS, introduced at one manufacturing unit, during the financial year ended March 31, 2024. Your Company posted a Net Profit of Rs. 3,284.49 Million for the financial year ended March 31, 2025, as against the Net Profit of Rs. 2,599.25 Million for the financial year ended March 31, 2024.
Significant investments behind Brand and technology made during the year under review, for future readiness, impacted net margins.
On a consolidated basis, your Company reports a turnover of Rs. 34,887.86 Million during the financial year ended March 31, 2025 and a consolidated Net Profit of Rs. 3,306.56 Million for the said financial year.
OPERATIONAL HIGHLIGHTS & PERFORMANCE
Your Company continued to be India''s favorite footwear brand and largest footwear retailer. Your Company retails through a Pan India network of 1962 COCO and Franchise Stores, its own website (www.bata.in) and major marketplaces. Your Company has a robust e-commerce network that delivers across the country. During the year under review, Quick Commerce was added as a channel.
Your Company witnessed sluggish demand that carried forward from the previous year, however, consumer sentiments saw early improvement through the second quarter of the year under review. Overall, the discretionary consumer spending majorly remained subdued during the year under review, further accentuated due to the elections and extreme heat wave. Your Company witnessed demand recovery during the second half of the year, in the value segments as retailers registered higher sales of low-priced items. Premium products saw bouts of healthy demand, driven by festive, wedding and winter season sales.
Your Company maintained significant thrust on portfolio newness with style and technology propositions to attract new customers. To foster ease of choices for customers, your Company continues to drive affordability and reducing complexity across categories. On account of these initiatives, your Company witnessed volume growth after a long time.
During the year under review, your Company witnessed a chequered demand for premium footwear in brands like Power, Hush Puppies, Floatz across channels.
As Indian customers across small towns aspire for branded products, your Company continues to augment its presence in Tier 3 - 5 cities through Franchise and Distribution networks. Rural markets outperformed urban areas driven by aspirational purchases and lower inflationary pressures.
Due to strong Brand recall, your Company has been witnessing increasing interest for opening of franchise stores. Your Company crossed the milestone of 600 Franchise stores for the first time, taking a leap forward in its retail footprint having penetration in 490 unique towns. Distribution channel was scaled up to 1550 towns.
Your Company continued to renovate stores and implement initiatives to elevate customer experience at its stores and on its website.
Network expansion through Franchise stores, combined with robust digital presence helps your Company to tap into new growth opportunities with strengthened omni-channel approach.
Demand for casual footwear continues to be ahead of the curve, due to growing preference for comfortable and versatile footwear. Trends like athleisure, streetwear and casual dressing boost demand for sneakers, flip-flops and slip-ons. Your Company maintained its focus on evolution of its product portfolio with the strategy of casualisation and premiumisation. Sneaker Studio were expanded to over 750 Bata and Franchise stores during the year under review.
âFloatzâ - a casual, washable and comfortable footwear continued to perform exceptionally well. Leveraging the success of Floatz, your Company expanded the Floatz banner in another 200 stores.
Your Company continues to make investments behind marketing campaigns, to pivot the Brand on style, modernity and youthfulness with high levels of portfolio freshness. Major campaigns - 10/10 Campaign, Try and Fly Campaign, Stronger Inside Campaign, etc., were launched during the year under review to target relevant customers. Your Company made strategic brand collaborations with new-age icons like Mr. Kartik Aaryan, Mr. Jim Sarbh and Mr. Vir Das. Our brand stories connected well with targeted audience.
Your Company has one of the largest Omni-network in India covering over 1750 stores. The Omnichannel of your Company recorded a handsome share of the total sales.
E-commerce business continued its steady growth path during the year under review. Both bata.com and marketplace channels grew significantly over last year.
In addition, Home Delivery Services now have been extended to all Franchise stores.
The Distribution Business and B2B Business of your Company remained subdued due to supply chain congestion caused by lower secondary sales. B2B business has been steady on major marketplaces with sharp focus on growth opportunities across categories & brands and continues to be amongst the top footwear brands on major marketplaces. During the year under review, your Company witnessed growth in categories like school, ladies VAC and sports.
Your Company stepped-up its infrastructure to enhance productivity and efficiencies across the value chain. A Voluntary Retirement Scheme was successfully implemented at one of the manufacturing units. Your Company continues to implement its strategies of L2L sourcing, import substitution, etc., to support Speed-to-Market and margin improvement across Retail and I&D businesses.
For the year under review, margins remained healthy across all business channels of EBOs, MBOs and E-Commerce, despite softness in discretionary demand.
Your Company continues to focus on efficiency and productivity backed by digital transformation for future readiness with cautious optimism.
As a responsible corporate citizen and a trusted Brand, your Company is committed towards its social responsibilities through various initiatives, details of which are covered subsequently in this Report.
During the year under review, there was no change in Share Capital of your Company.
Your Board at its meeting held on August 6, 2024, declared an interim dividend of Rs. 10/- (200%) per equity share of Rs. 5/- each, fully paid-up of your Company, for the financial year ended March 31, 2025. The said dividend was paid in September 2024.
In line with the Dividend Distribution Policy of your Company, your Board recommends a Final Dividend of Rs. 9/- (180%) per equity share of Rs. 5/- each, fully paid-up of your Company, for the financial year ended March 31, 2025. The Final Dividend, if declared, by the Members at the forthcoming Annual General Meeting (AGM) shall be paid to the eligible Members of the Company from Monday, August 25, 2025 onwards. The total payout of aforesaid dividend would be approximately Rs. 1,156.75 Million.
The Dividend Distribution Policy has been uploaded on the website of the Company at www.bata.in under the tab âInvestor Relations > Company Policiesâ at https://www.bata.in/company-policies.html and is available at the link https://www.bata.in/on/ demandware.static/-/Sites-bata-in-Library/default/ veadaf24d0adb1bcaa378b1c129 3c96d71a988b9e/ pdf/CP 1905-Dividend-Revised 2023.pdf
Pursuant to the Finance Act, 2020 read with the Income-tax Act, 1961, the dividend paid or distributed by a company shall be taxable in the hands of the shareholders w.e.f. April 1, 2020. Accordingly, in compliance with the said provisions, your Company shall make the payment of dividend after necessary deduction of tax at source at the prescribed rates. For the prescribed rates for various categories, the shareholders are requested to refer to the Finance Act, 2020 and amendments thereof.
Your Company has not transferred any amount to the General Reserve during the financial year ended March 31, 2025.
Your Company has no unclaimed / unpaid matured deposit or interest due thereon since December 31, 2013. Your Company has not accepted any deposits covered under ''Chapter V - Acceptance of Deposits by Companies'' under the Act during the financial year ended March 31, 2025.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
In terms of Section 186 of the Act and Rules framed thereunder, details of the Loans given and Investments made by your Company have been disclosed in Note No. 5 of the Notes to Financial Statements for the financial year ended March 31, 2025, which forms part of this Annual Report. Your Company has not given any guarantee or provided any security during the year under review. The disclosure as per Rule 8(5)(xii) of the Companies (Accounts) Rules, 2014, as amended, is not applicable to your Company.
During the financial year ended March 31, 2025, all transactions with the Related Parties as defined under the Act read with Rules framed thereunder, were in the ordinary course of business and at arm''s length basis. Your Company does not have a ''Material Subsidiary'' as defined under Regulation 16(1)(c) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended) (the âListing Regulationsâ).
During the year under review, your Company did not enter into any Related Party Transaction which requires prior approval of the Members of your Company. All Related Party Transactions entered into by your Company had prior approval of the Audit Committee and the Board of Directors, as required under the Listing Regulations. Subsequently, the Audit Committee and the Board have also reviewed the Related Party Transactions on a quarterly basis. During the year under review, there have been no materially significant Related Party Transactions having potential conflict with the interest of your Company.
Since all Related Party Transactions entered into by your Company were in the ordinary course of business and also on an arm''s length basis, therefore, details required to be provided in the prescribed Form AOC - 2 are not applicable to your Company.
Necessary disclosures required under the Ind AS 24 have been made in Note No. 33 of the Notes to the Financial Statements for the financial year ended March 31, 2025.
INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
In compliance with Sections 124 and 125 of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (âIEPF Rulesâ) as amended from time to time, a sum of Rs. 22,57,752/- has been deposited into the specified bank account of the IEPF, Government of India, towards unclaimed / unpaid dividend amount for the financial year ended March 31, 2017.
As per the IEPF Rules, the corresponding equity shares in respect of which Dividend remains unclaimed / unpaid for seven consecutive years or more, are required to be transferred to the Demat Account of the IEPF Authority. During the year under review, your Company has transferred 41,238 underlying Equity Shares to the Demat Account of the IEPF Authority, in compliance with the aforesaid Rules.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN END OF THE FINANCIAL YEAR AND THE DATE OF THIS REPORT
Except those disclosed in this Annual Report, there are no material changes and commitments affecting the financial position of your Company between the end of the financial year i.e., March 31, 2025 and the date of this Report.
During the year under review, no company became or ceased to be a subsidiary, joint venture or associate of your Company. As on the date of this Report, your Company has two wholly owned subsidiaries viz., Bata Properties Limited and Way Finders Brands Limited (WFBL).
The Annual Reports of these Subsidiaries will be made available for inspection by any Member of the Company at the Registered Office of your Company at 27B, Camac Street, 1st Floor, Kolkata - 700016, West Bengal, between 11:00 A.M. and 1:00 P.M. on any working day upto the date of ensuing AGM. The Annual Reports of the aforesaid Subsidiaries for the
financial year ended March 31, 2025, shall be provided to any Member of your Company upon receipt of written request. Members may also send an advance request at the e-mail id -share.dept@bata.com for an electronic inspection of the aforesaid documents.
The Annual Reports along with the Audited Financial Statements of each of the Subsidiaries of your Company are also available on the website of your Company at www.bata.in
During the year under review, WFBL ceased manufacturing of closed footwear due to operational efficiencies and other reasons. Further, pursuant to Section 129(3) of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014 (as amended), a statement containing the salient features of Financial Statements of the aforesaid Subsidiaries (including highlights of their performance and contributions to the overall performance of the Company) has been provided in Form AOC - 1 which forms part of this Annual Report.
The Audited Consolidated Financial Statements (CFS) of your Company for the financial year ended March 31, 2025, prepared in compliance with Ind AS issued by the Institute of Chartered Accountants of India (ICAI) and notified by the Ministry of Corporate Affairs (MCA), Government of India also form part of this Annual Report.
Details of the Subsidiaries are given in the Annual Return in Form No. MGT - 7 as on March 31, 2025.
The Annual Return referred to in Section 92(3) of the Act is available on the website of your Company at www.bata.in under the tab âInvestor Relations > Annual Reportsâ under the link https://www.bata.in/ annual-reports.html
AUDIT AND AUDITORSStatutory Auditors
In terms of Section 139 of the Act, read with the Companies (Audit and Auditors) Rules, 2014 (as amended), M/s. Price Waterhouse Chartered Accountants LLP (âPwCAâ) (ICAI Firm Registration No. 012754N/N500016), Chartered Accountants was appointed as the Auditors of your Company for a consecutive period of 5 (five) years from the conclusion of the 89th AGM held in the year 2022 until conclusion of the 94th AGM of your Company.
PwCA has not informed the Company regarding any condition rendering them ineligible to continue as the Auditors of the Company in terms of the provisions of the Act and the Rules framed thereunder. A copy of the certificate issued by the Peer Review Board (ICAI) as required under Regulation 33 of the Listing Regulations has been submitted by PwCA to the Company.
The reports given by the Auditors on the Standalone and Consolidated Financial Statements of your Company for the financial year ended March 31, 2025, form part of this Annual Report and there is no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Reports.
In terms of Section 204 of the Act, read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended), your Board, at its meeting held on May 29, 2024, appointed M/s. Chandrasekaran Associates (âCACSâ), (FRN: P1988DE002500), Company Secretaries, 11-F, Pocket - IV, Mayur Vihar Phase - I, Delhi - 110091, to conduct the Secretarial Audit for the financial year ended March 31, 2025.
The Secretarial Audit Report as received from CACS in the prescribed Form No. MR - 3 is annexed to this Board''s Report and marked as Annexure - I and does not contain any qualification, reservation, adverse remark or disclaimer.
In terms of Regulation 24A of the Listing Regulations read together with Section 204 of the Act and the Rules framed thereunder, it is proposed to appoint CACS to conduct Secretarial Audit for 5 (five) consecutive years commencing from April 1, 2025.
CACS have consented to the said appointment. CACS have confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Company Secretaries of India (ICSI) and their appointment, if made, would be within the prescribed limits. The Audit Committee and the Board of Directors recommends the proposed appointment. Brief resume and other details of CACS are given in the Notice convening the 92nd AGM of the Company.
During the year under review, the Statutory Auditors and the Secretarial Auditors of your Company have
not reported any instances of frauds in terms of the second proviso to Section 143(12) of the Act.
In compliance with Regulation 34 of the Listing Regulations read with Schedule V thereto, the Corporate Governance Report of your Company for the financial year ended March 31, 2025 is annexed as Annexure - II and forms part of this Annual Report. The details of Credit Rating are given in the said report.
Other disclosures required to be made under the Listing Regulations, the Act and the Rules made thereunder, have been included in the Corporate Governance Report and / or the Financial Statements for the financial year ended March 31, 2025 to avoid repetition in this Board''s Report.
SIGNIFICANT AND MATERIAL LITIGATIONS / ORDERS
During the year under review, there were no significant material orders passed by the Regulators / Courts and no litigation was outstanding as on March 31, 2025, which would impact the going concern status and future operations of your Company. The details of litigation on tax matters are disclosed in the Auditor''s Report and Financial Statements which form part of this Annual Report. The application filed under the provisions of the Insolvency and Bankruptcy Code, 2016 (as amended) (the âIB Codeâ) against Bata India Limited for recovery of purported dues was dismissed as withdrawn during the year under review. No Corporate Insolvency Resolution application was made or proceeding was initiated, by / against Bata India Limited under the IB Code during the year under review. Further, no application / proceeding by / against Bata India Limited under the IB Code is pending as on March 31, 2025.
Your Company has an elaborate system-driven compliance programme in place, including for thorough pre-review of the on-boarding procedure in case of a new manufacturing partner in-sourcing and also for an associate manufacturer for its own factories. This includes clearance of documents and a detailed compliance audit prior to approval. With respect to Social & Environmental Responsibility (SER) audits of its value chain sourcing partners, 44 audits were performed during the year under review.
The factories have been audited by third party auditors and vendors are audited by Bata''s internal auditors to check their level of compliance.
Your Company has achieved benchmarks for its own factory in the fields of Quality Management Systems (ISO 9001:2015), Environmental Management Systems (ISO 14001:2015) and Occupational Health & Safety Management Systems (ISO 45001:2018).
Your Company was recognised as 1st license holder of Rubber Hawaii as per IS:10702:1992 by BIS-Kolkata.
Products of your Company meet the optimal Quality Specifications and the systematic approach towards Zero Defect by implementation of DMAIC process for continuous improvement and sustainable development.
To remain competitive, your Company continues to focus on innovation. âLife Naturalâ antimicrobial material is offered for School shoes (Tennis, Naughty Boy, Scout Ballerina and Hawaii Flip-Flop).
Under Sustainable initiatives, your Company converted the fuel from HSD to LPG for Thermopack, thereby, potentially reducing CO2 and SO2 emissions. Your Company also implemented 3R (PVC, Rubber & EVA, Laminated Textile waste, along with reduction initiatives like LED, Motion Sensors, efficient air compressors, VFD/Servo motors, Turbo ventilators, integrated APFC electrical panels) initiative of âReduce, Reuse & Recycleâ program. Additionally, your Company also have set-up Zero Discharge facilities, Sewage Treatment Plants and Rain-Water Harvesting in various units.
Your Company achieved impressive growth by expanding its strategic supplier base, unlocking substantial savings while advancing both domestic capability and capacity. These initiatives not only accelerated Speed-to-Market but also delivered notable margin enhancements, showcasing commitment to building impactful partnerships for cost optimisation.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
In compliance with Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 (as amended), a statement containing information on conservation of energy, technology absorption,
foreign exchange earnings and outgo of your Company, in the prescribed format, is annexed to this Board''s Report and marked as Annexure - III.
RESEARCH AND DEVELOPMENT ACTIVITIES AND ENERGY CONSERVATION
Research and Development activities during the year under review continued to emphasise on creating a pollution-free and a safe work environment. Technological improvement in product development, material development, introduction of new footwear moulds, process improvement, etc., were the key focus areas to improve quality of footwear and productivity in manufacturing. Your Company developed Nail Penetration Resistance Safety Boot as per BIS norms IS 15298-Part 2: 2016, Rubber Canvas Miners Boot - IS - 3976:2018, Rubber Canvas P.T. Shoe - IS:3735:1996, Rubber Canvas J.F. Hunter Boot - IS:3736:1995, Leather Miners Boot - IS:1989 (Part 1) 1986, Leather Safety Boot for Heavy Metal Industry - IS:1989 (Part 2), Hawai Chappal -IS:10702:2023, Sports Shoes - IS:15844:2023 (Part 1) and Sandal & Slippers - IS:6721:2023.
An expenditure of Rs. 65.54 Million was incurred on Research and Development (including product development initiatives) during the year under review, as against Rs. 58.71 Million during the financial year 2023-24.
Your Company achieved reduction of air pollution and emissions at its Batanagar Factory by Briquette consumption of 555 Ton and PNG consumption by 18.74 Ton at Bataganj Factory. Your Company shall continue to invest on Research and Development activities and energy saving measures in its manufacturing units.
Further information on R & D activities and conservation of energy are annexed to this Report and marked as Annexure - III.
CORPORATE SOCIAL RESPONSIBILITY
Your Company operates on the belief that an organisation should exist to serve a social purpose and enhance the lives of people connected through its business. Your Company has a CSR Policy in place which aims to ensure that it continues to operate its business in an economically, socially and environmentally sustainable manner, while recognising the interests of all its stakeholders. It takes up CSR programmes which benefit the
communities in and around the vicinity of its operational presence, resulting in enhancing the quality of lives of the people in those areas.
Details of composition of CSR Committee and other relevant details have been provided in the Corporate Governance Report.
A sum of Rs. 3,17,69,894 was spent on various CSR initiatives (covered hereinafter in this Report) for the financial year ended on March 31, 2025. The unspent amount of Rs. 3,04,88,776 is towards certain ongoing projects and has been transferred to Unspent CSR Account as per Section 135(6) of the Act. The Annual Report on CSR activities, containing details of CSR expenditure, details of excess amount spent, etc., is appended as Annexure - IV to this Report.
The salient features of the CSR Policy of your Company is appended as Annexure - V to this Report and the complete policy has been uploaded on the website of your Company at www.bata.in under the tab âInvestor Relations > Company Policiesâ at https://www.bata.com/on/demandware.static/-7 Sites-bata-in-Library/default/ vca1a6dc6c6c9dd1e1b2bd451ba8726ee06c054d7/ Staticpagesimages/Company%20Policies/CSR-Policy-Bata-India-Ltd-2021.pdf
There has been no change in the CSR Policy during the year under review.
Your Company continued to demonstrate its social commitment to the communities in and around which it operates. During the financial year 202425, CSR initiatives of your Company, reflected our commitment to societal well-being and sustainable business practices. Aligned with global Sustainable Development Goals (SDGs), your Company primarily focused on quality education, W.A.S.H. (water sanitation and hygiene), environmental conservation and gender equality.
Promoting EducationBata Childrenâs Program
Through various initiatives, including Bata Children''s Program (BCP), your Company reached over 5500 children, enhancing academic performance and inclusive education for children with disabilities. BCP Program continued to focus on other critical areas like Sports, mental health & well-being, STEM Learning, Foundational Literacy & Numeracy, etc.
Environment Sustainability Projects
Environmental sustainability projects included plantation of more than 5000 trees and maintaining solar power installations in various schools, propagating CO2 absorption by an estimated 1,10,000 kgs.
Girl Child Support
Your Company continued to implement one of the most needed programs on menstrual hygiene & awareness wherein your Company addressed the availability of sanitary facilities, awareness about myths related to menstrual health and the importance of nutrition for good health & well-being. On one hand, the program focused on the ecosystem by sensitising adolescent girls, teachers, parents and school management committees by raising awareness about menstrual hygiene and on the other, it promoted positive masculinity among schoolboys.
Bata Heroes - Employee Volunteering
Employee volunteering continued to play a significant role, with over 6200 hours dedicated to community service. While addressing the needs of the community through CSR initiatives, your Company also encouraged its employees to volunteer in various causes. It is a core objective to make employee volunteering a self-driven culture of the organisation. Thus, in a planned manner, activities were curated for employees to contribute, such as organising/conducting sessions on important days like World Health Day, Earth Day, Children''s Day, etc. Bata employees also participated in winter donation drive and supported other charities for a cause.
Your Company made significant strides to harness all its resources towards the successful execution of CSR projects across all locations.
SUPPORT FROM BATA SHOE ORGANIZATION
Your Company continues to receive support from the Holding Company - Bata (BN) B.V., Amsterdam, The Netherlands and also from Bata Shoe Organization (BSO). Your Company also enjoys the benefits of technical research through Global Footwear Services Pte. Ltd., Singapore (GFS). Your Company has renewed the Technical Collaboration Agreement with GFS with effect from January 1, 2021 for a period of ten years. In terms of the said Agreement, your Company receives guidance,
training of personnel and services from GFS in connection with research & development, marketing, brand development, footwear technology, testing & quality control, store location, layout & design, environment, health & safety, risk & insurance management, etc. Your Company continues to obtain expertise and experience from the personnel of GFS and other BSO group companies to improve its product range and operational processes throughout the year. In terms of the said Agreement, your Company has paid technical services fee of Rs. 560.99 Million to GFS for the financial year ended March 31, 2025, which is around 1.61% of the Turnover of your Company.
BOARD OF DIRECTORS, BOARD MEETINGS AND KEY MANAGERIAL PERSONNELComposition
Your Company''s Board is duly constituted and is in compliance with the requirements of the Act, the
Listing Regulations and provisions of the Articles of Association of your Company. Your Board has been constituted with requisite diversity, wisdom, expertise and experience commensurate to the scale of operations of your Company.
During the year under review, a total of 9 (nine) Meetings of the Board of Directors of your Company were held, i.e., on April 19, 2024, May 29, 2024, August 6, 2024, November 4, 2024, November 22, 2024, December 23, 2024, February 10, 2025, March 8, 2025 and March 20, 2025. Details of Board composition and Board Meetings held during the financial year 2024-25 have been provided in the Corporate Governance Report which forms part of this Annual Report.
Changes in Board Composition
Details of changes in the Board Composition during the year under review are as under:
The Board places on record its sincere appreciation for the services rendered by Mr. Akshaykumar Narendrasinhji Chudasama and Mr. Ravindra Dhariwal during their respective tenures.
Other details pertaining to the Directors, their appointment / cessation during the year under review and their remuneration are given in the Corporate Governance Report annexed hereto and forming part of this Report.
Director seeking appointment / re-appointment
Mr. Shaibal Sinha (DIN: 00082504), Non-Executive Non-Independent Director of your Company, is liable to retire by rotation at the ensuing AGM and being eligible, has offered himself for re-appointment. Your Board recommends his re-appointment as a Director (Non-Executive Non-Independent Director) of your Company, liable to retire by rotation.
Further details along with necessary disclosure(s) in respect of Mr. Shaibal Sinha have been given in the Notice convening the 92nd AGM of your Company.
As on the date of this Report, following are the Key Managerial Personnel (KMP) of your Company:
1. Mr. Gunjan Shah (DIN: 08525366), Managing Director and Chief Executive Officer.
2. Mr. Amit Aggarwal (DIN: 10825970), Director Finance and Chief Financial Officer.
3. Mr. Nitin Bagaria (ACS-20228), Company Secretary & Compliance Officer.
Based on the recommendation/approval of the Nomination and Remuneration Committee and the Audit Committee of the Board, Mr. Durgesh Singh, a qualified Chartered Accountant, was appointed, by your Board, as Chief Financial Officer (KMP) of the Company, w.e.f. December 1, 2024, to facilitate smooth transition upon induction of Director Finance and Chief Financial Officer in due course. Based on the recommendation/approval of the Nomination and Remuneration Committee and the Audit Committee of the Board, Mr. Amit Aggarwal, a qualified Chartered Accountant, was appointed by your Board at the meeting held on December 23, 2024, as Director Finance and Chief Financial Officer (KMP) of the Company, w.e.f. December 23, 2024. Accordingly, Mr. Durgesh Singh ceased to hold the position.
Declaration by Independent Directors
The Independent Directors of your Company have submitted requisite declarations that they continue to meet the criteria of Independence as laid down in Section 149(6) of the Act and Regulations 16(1)(b) and 25(8) of the Listing Regulations and there is no change in the status of their Independence and have confirmed that they are not aware of any circumstance or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties.
The Independent Directors of your Company are in compliance with the requirements under Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014 (as amended).
The Board of Directors further confirms that the Independent Directors (including appointed during the year) also meet the criteria of expertise, experience, integrity and proficiency in terms of Rule 8 of the Companies (Accounts) Rules, 2014 (as amended).
Committees of the Board
Pursuant to various requirements under the Act and the Listing Regulations, the Board of Directors has constituted various committees, such as, Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Risk & Compliance Management Committee and Corporate Social Responsibility Committee. The details of composition, terms of reference, etc., pertaining to these committees are mentioned in the Corporate Governance Report which forms part of this Annual Report.
The Board has constituted a committee, namely, Business Operations Committee to primarily look into day-to-day matters relating to retail stores, banking, etc. The Board has also constituted dedicated committees, namely, Real Estate Committee and Technology Committee.
The Real Estate Committee is primarily responsible to review, recommend and assist the Board on all matters and transactions relating to the Real Estate of your Company.
The Technology Committee primarily acts as a counsel and assists on Technology Strategies to the Board. It also conducts periodic appraisal of Technology Projects of your Company.
COMPLIANCE WITH SECRETARIAL STANDARDS
During the year under review, your Company has duly complied with the applicable provisions of the Revised Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) issued by ICSI.
The Board of Directors of your Company has duly constituted an Audit Committee in compliance with the provisions of Section 177 of the Act, the Rules framed thereunder read with Regulation 18 of the Listing Regulations. The recommendations made by the Audit Committee are accepted by your Board.
Name of the Audit Committee members, number of meetings held during the year under review, terms of reference and other requisite details have been provided in the Corporate Governance Report which forms part of this Annual Report.
NOMINATION AND REMUNERATION POLICY
Your Board has adopted a Remuneration Policy for identification, selection and appointment of Directors, Key Managerial Personnel (KMPs) and Senior Management Personnel (SMPs) of your Company. The Policy provides criteria for fixing remuneration of the Directors, KMPs, SMPs as well as other employees of your Company. The Policy enumerates the powers, roles and responsibilities of the Nomination and Remuneration Committee. There has been no change in the said Policy during the year under review.
Your Board, on the recommendations of the Nomination and Remuneration Committee, appoints Director(s) of your Company based on his / her eligibility, experience and qualifications and such appointment is approved by the Members of the Company at General Meetings. The Policy also provides for Board Diversity criteria.
The Policy is appended as Annexure - VI and has been uploaded on the website of your Company at www.bata.in under the tab âInvestor Relations > Company Policiesâ at https://www.bata.in/company-policies.html and is available at the link https:// www.bata.com/on/demandware.staticA/Sites-bata-in-Library/default/v4630e105168980 f045e35a4a408a4a6d759e76c0/pdf/250423-Bata-Nomination-and-Remuneration-Policy%202023.pdf
Your Company conducts a Board Evaluation process for the Board of Directors as a whole, Board Committees and also for the Directors individually through self-assessment and peer assessment. The details of Board Evaluation process for the financial year 2024-25 have been provided in the Corporate Governance Report which forms part of this Annual Report.
DISCLOSURES ON REMUNERATION OF DIRECTORS AND EMPLOYEES OF THE COMPANY
Details as required under Section 197(12) of the Act read with Rules 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended), are annexed to this Board''s Report and marked as Annexures -VII and VIII. Further, the Non-Executive NonIndependent Directors of your Company (who are a part of BSO / Bata Group in any executive capacity) do not accept any sitting fees / commission.
DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to Section 134 of the Act, the Directors, to the best of their knowledge and belief, hereby confirm that:
(a) in the preparation of the annual accounts, the applicable accounting standards had been followed;
(b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2025 and of the profit of the Company for that period;
(c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) they have prepared the annual accounts on a going concern basis;
(e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
(f) they have devised proper systems to ensure compliance with the provisions of all applicable
laws and such systems are adequate and operating effectively.
WHISTLE BLOWER POLICY / VIGIL MECHANISM
In terms of Section 177 of the Act and Rules framed thereunder read with Regulation 22 of the Listing Regulations, your Company has a Whistle Blower Policy / Vigil Mechanism in place for the Directors and Employees of your Company through which genuine concerns regarding various issues relating to inappropriate functioning of the organisation can be raised. A Vigil Mechanism Committee under the Chairmanship of the Audit Committee Chairman is also in place. Any concern relating to impact on human rights or issues caused by the business shall also be addressed by the said committee. The Whistle Blower Policy has been uploaded on the website of your Company at www.bata.in under the tab âInvestor Relations > Company Policiesâ at https://www.bata.in/company-policies.html and is available at the link https://www.bata.com/on/ demandware.static/-/Sites-bata-in-Library/default/ v3661a96a986106c65932f28cfae4ab126b41b608/ pdf/WhistleBlowerPolicy.pdf
The Policy provides access to the Head - Legal of your Company and to the Chairman of the Audit Committee. No person has been denied an opportunity to have access to the Vigil Mechanism Committee and the Audit Committee Chairman.
CONFIRMATION OF COMPLIANCE ON PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company is committed to provide a safe and secure environment to its women employees across its functions and other women stakeholders, as they are considered as integral and important part of the organisation.
In terms of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (as amended) and Rules framed thereunder, your Company has duly adopted a Policy and has also complied with the provisions relating to the constitution of Internal Complaints Committee (ICC). A summary of the complaints dealt during the financial year ended March 31, 2025, in terms of the said Act and Rules framed thereunder has been provided in the Corporate Governance Report which forms part of this Annual Report.
Your Company has been conducting awareness campaign across all its manufacturing units, warehouses, retail stores and office premises to encourage its employees to be more responsible and alert while discharging their duties.
RISK MANAGEMENT AND ADEQUACY OF INTERNAL FINANCIAL CONTROLS
Your Company''s internal financial controls ensure that all assets of your Company are properly safeguarded and protected, proper prevention and detection of frauds and errors and all transactions are authorised, recorded and reported appropriately. Your Company operates through definitive Chart of Authorities (COAs) and Standard Operating Procedures (SOPs) in respect of its operations including financial transactions. Such COAs and SOPs are regularly monitored and if required, modified from time to time depending on business requirements.
Your Company has an adequate system of internal financial controls commensurate with its size and scale of operations, procedures and policies, ensuring orderly and efficient conduct of its business, including adherence to the Company''s policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information.
Such practice provides reasonable assurance that transactions are recorded as necessary to permit preparation of Financial Statements in accordance with the applicable legislations and that the same are well within the COAs and SOPs, without exception. Your Company also monitors, through its Internal Audit Team, the requirements of processes in order to prevent or timely detect unauthorised acquisition, use or disposition of the Company''s Assets which could have a material effect on the Financial Statements of the Company. The Internal Audit function is responsible to assist the Audit Committee and Risk & Compliance Management Committee (RCM Committee) on an independent basis with a complete review of the risk assessments and associated management action plans.
Your Company believes that risk resilience is key to achieving higher growth. Your Company has a well-defined Risk Management framework in place to identify, assess, monitor and mitigate various risks to key business objectives. This framework ensures
that your Company''s operations are conducted in a manner that proactively addresses uncertainties and risks that may impact business performance or continuity. The Risk Management Policy, approved by the Board, is aligned with the strategic objectives of your Company and is reviewed periodically to reflect changing risk dynamics. Key business risks including operational, financial, strategic, regulatory, cyber and reputational risks are monitored regularly by the RCM Committee. An assessment of cyber security has also been carried out in compliance with the Listing Regulations. The Committee ensures that appropriate mitigation strategies are in place and that emerging risks are promptly addressed.
The Internal Audit Report and Risk Inventory Report are reviewed periodically by the Audit Committee and the RCM Committee respectively. The Chief Internal Auditor is a permanent invitee to the Audit Committee Meetings and a member of the RCM Committee. The Audit Committee advises on various risk mitigation exercises on a regular basis. Your Company has been maintaining a separate Internal Audit Team headed by the Chief Internal Auditor appointed by the Audit Committee of your Board.
Further details pertaining to the RCM Committee and Meetings held during the year under review are given in the Corporate Governance Report. Your Board is of the opinion that the Internal Financial Controls, affecting the Financial Statements of your Company are adequate and are operating effectively.
NON-APPLICABILITY OF MAINTENANCE OF COST RECORDS
The Central Government has not prescribed the maintenance of cost records under Section 148(1) of the Act and Rules framed thereunder with respect to the Company''s nature of business. There has been no change in the nature of business of your Company.
MANAGEMENT DISCUSSION AND ANALYSIS REPORTIndustry Structure and Developments
The global footwear market is projected to grow at a CAGR of ~2.3% during 2025 to 2029, on account of shifting preferences of consumers toward footwear that matches their daily outfits, along with increasing number of individuals wearing different footwear for different occasions. In addition, there is a rise in demand for fashionable footwear that helps in reflecting the individuality of a consumer.
India continues to be the world''s second-largest producer and consumer of footwear. It provides significant employment in the country, contributing ~13% of global leather production. Indian footwear market is estimated to grow at a rate higher than the global average, driven by growing aspirations, youthful population, expanding e-commerce landscape and rising disposable income. The average volume per person in the footwear market in India is expected to be 1.54 pairs in 2025.
The Retail Industry in India is one of the most promising and developing marketplaces in the world, ranking fourth globally and contributing over 10% to the nation''s GDP. However, the Indian retail sector stands at a crossroads, facing challenges that demand innovative solutions and opportunities that beckon for exploration. Healthy economic growth, changing demographic profile, increasing disposable income, urbanisation and changing consumer tastes & preferences have been some of the factors driving growth in the organised retail market in India.
Retail growth is also essential for boosting national income and fortifying India''s social infrastructure. By 2030, retail is expected to be the single largest new job creator in the country.
In recent years, India has experienced a boom in smartphone penetration and is expected to reach 1.1 billion by 2025. This has assisted the growth of India''s e-commerce sector and is projected to reach USD 325 Billion by 2030, with a significant boost in the footwear sales.
Opportunities and Threats
India''s footwear sector is witnessing a shift in the perception of footwear from a utility product to a fashion statement. The sector is also shifting towards branded players and increasing digital penetration. However, the average volume of footwear per person in India is close to the half of the global average of 3 pairs.
Offline channels accounts for majority footwear sales in India. The presence of well-established retail infrastructure and preference of consumer to test fit and feel, contributes to the dominance of offline sales channels.
The Indian footwear market is projected to cross USD 90 Billion by 2030, on the back of factors like:
a) Consistent rise in income and purchasing power.
b) Higher aspiration levels for branded products.
c) Increase in number of individuals wearing different footwear for different occasions.
d) Higher participation of female workforce.
e) Steady shift towards organised channels.
f) Increase in digital payments and online shopping.
g) Rising Sports and Athleisure penetration.
However, macroeconomic factors like rate of economic growth, inflation, unemployment rate, etc., may impact discretionary spending. High real estate costs and supply chain limitations are other key constraints for footwear retailers.
Your Company continues to work on multiple initiatives - Driving Portfolio Evolution, Accelerating Expansion via Franchise & Distribution, Marketing Investments, Exploding Digital Footprint, Agile & Efficient Supply Chain, Staying nimble on costs with Talent, Process, Technology investments at the core.
Your Company continues to be the largest footwear retailer in India with an extensive store network, nationwide delivery and distribution network.
Your Company also has opportunities in the I&D business, as Bata is the only player which is present across categories and price points. Your Company continues to strengthen its position with quality products, trendy designs, competitive pricing, investment in branding and strong relationship with distributors.
Apart from the above, casualisation and premiumisation of product portfolio targeting higher ASP and expansion in the market share of premium category, portfolio freshness & innovation, scaling up digital channels, inventory management and productivity enhancement will continue to be the priority of your Company along with investments in our brands and stores. Your Company continues to offer a diverse portfolio of products straddled across various price points and categories.
To cater demand for value segment, your Company is also driving affordability and reducing complexity across categories.
Your Company is optimistic about the opportunity to transform by bringing technological advancements and digital capabilities.
Bata India''s mission is to make global trends and premium fashion accessible to all consumers through its extensive retail network. It is redefining the intersection of fashion and comfort through its various brands - Bata Red Label for in-trend global styles, Bata Comfit for technology enabled comfort in daily wear, athleisure-brand Power for fitness sneakers and apparel, NorthStar for sneakers inspired by global youth trends, fashionable range of clogs and slip-ons under Floatz, kids-brand Bubblegummers that has won the trust of parents while inspiring fun and Hush Puppies - the global brand that epitomizes comfort and elegance to name a few.
During the year under review, your Company strategically reimagined its brand narrative through innovative marketing campaigns that positioned Bata Brand at the intersection of global trends and local relevance. Fresh collections, brought to life through thoughtful storytelling and meaningful collaborations, elevated the style credentials and established Bata as a Brand for customers seeking for style & comfort.
Ahead of the bustling summer holiday season and fuelled by a surge in demand for travel, your Company unveiled the ''9 to 9'' collection with an industry-first ''Try and Fly'' offer, turning footwear trials at any Bata store into a rewarding experience with assured prizes and an all-expense paid trip. Complementing this, the Hush Puppies Travel campaign addressed the needs of modern-day explorers and young professionals who seek style without compromising on comfort.
Your Company also made significant strides in establishing its fashion credentials through high-profile collaborations with renowned designers and prestigious fashion events.
Recognising the growing fitness consciousness among customers, global ''Stronger Inside'' campaign was launched for athleisure brand, Power featuring the revolutionary Power Energy Collection. Designed in Canada and backed by global technology, the collection was amplified by renowned fitness trainers and influencers. With a vision to ignite empowerment across India fuelled by inner strength and accessible technology, your Company collaborated with
wrestler Ms. Nisha Dahiya as she geared up for Paris Olympics 2024.
Your Company''s marketing excellence was recognized with multiple prestigious accolades including Trendies Award ''24 for Best Multi-Platform Campaign and Best Influencer Marketing Campaign; e4m Prime Time Award, Media Services for Best Influencer Marketing and Creativity in the Jewellery Fashion and Apparel Category and The Mommys by Mad Over Marketing for Best Use of Social Media to Drive Sales.
As we stride into the future, your Company will continue its marketing efforts to honour its rich legacy while boldly reimagining its next chapter. With every campaign, every collection and every conversation, your Company reaffirms its commitment to being a companion for every generation offering style with comfort.
Affordability
To foster ease of choices for customers, your Company is driving affordability in core brands and reducing complexity across categories. With price point consolidation across core brands, your Company initiated simplification of offerings and line reduction to bring value proposition in top selling articles.
Hush Puppies
With a strong push to attract new-age customers, newness is a key driver for Hush Puppies. The latest collection brings in new-age casuals, loafers and wedges, crafted with exclusive materials and high-end leathers.
Infusing fresh energy into Hush Puppies, your Company announced the hilarious, ever-stylish and paw-sitively charming Mr. Vir Das as the Brand''s India ambassador. A first in the fashion industry in India, the announcement came in the most unique way with Mr. Vir Das getting ready for his historic moment as the first Indian to host the globally acclaimed 52nd International Emmy Awards.
Your Company introduced a limited edition ''Hush Puppies x Peanuts'' collection, bringing together two beloved icons: Hush Puppies'' basset hound and Snoopy, the famous Beagle from Peanuts. The collaboration captured the essence of the groovy 70s, with the Seventy8 collection featuring a unique, exclusive look.
Additionally, the expansion, premiumisation and standardisation of non-footwear categories like handbags, belts and wallets have become significant growth pillars, contributing meaningfully to overall HP business.
Your Company continues to implement its portfolio casualisation strategy, which worked well during the year under review. The Sneaker category was led by Power.
Your Company created awareness about the fastest selling Power Easy Slide collection to cater the growing demand for convenience, accessibility and innovation. The collection features an intelligent hands-free design that eliminates the need to bend down, bringing the utmost convenience to daily routine. Your Company plans to expand Easy Slide collection to 1200 doors shortly.
Power apparel performed well during the year under review. Your Company launched light winter and fall collection and the collection was expanded to 100 stores.
Floatz crossed Rs. 1000 Million in sales during the year under review. Your Company expanded the brand to 1500 doors and continued with lightweight and trendy designs, offering all-day ease, both indoors and outdoors, that saw extreme popularity with customers. Dual density products were added to the portfolio. Your Company also launched Kids collection in collaboration with Marvel and Disney.
Digital Multi-Channel Business
Your Company has one of the largest Omni-network in India covering 1700 stores. Omni-channel recorded a handsome share of the total sales.
E-commerce business continued its steady growth path during the year under review. Both bata.com and marketplace channels grew significantly over last year. Your Company also added Quick Commerce channel and expects it as a growth opportunity in coming years.
Bata.com continues to improve the merchandise assortment display leading to higher ASPs and margin improvements.
In addition, Home Delivery Services at Franchise stores is leading to incremental business for
Franchisee partners as it provides access to the complete product catalogue to the customers. Home Delivery continues to contribute close to 1 million pairs of sales in a year.
Investment in technology integrations continue to improve customer experience on Bata.com. Efficient Returns and Refunds handling also led to significant reduction in customer complaints.
Your Company''s non-retail business division comprises of Multi-Brand Outlets, Key Accounts, industrial and institutional business divisions and exports. Your Company continues to focus on select categories including School, Value Added Men''s and Ladies open and Men''s closed where we have competitive advantages. Your Company will further focus on growth of Sneakers/Sports category.
During the year under review, your Company gained market share in select categories despite overall sluggish market conditions. Accordingly, your Company has strategically consolidated its network of distributors to drive business and to focus on larger distributors cohort. This is reflected in the improvement in Weighted Distribution which has grown to over 45%.
Bata availability in MBOs is now in 1550 towns and 700 enterprises provide Bata shoes to their Employee/Customers through our B2B Division.
Inventory tightening both in terms of quantity and quality was a key focus area and your Company will continue to work towards improving stock turns and forecast accuracy to achieve an optimal level of inventory and reduce clutter at stores.
During the year under review, your Company continued to invest in technology-driven process enhancements, leveraging data-driven insights to empower teams in delivering exceptional customer experiences. Key initiatives such as Customer Profile Score, Decentralised claim approvals and Self-Help IVR were implemented to enhance customer experience. These features led to faster resolutions and a significant reduction in overall escalations.
As a core focus area, your Company is further enhancing customer experience by integrating AI into Customer Service IVR and create a seamless self-service experience.
Segment wise or product wise performance
Your Company operates in Footwear & Accessories Segment only. Operational highlights & performances of major business categories, channels and key brands of your Company for the financial year ended March 31, 2025 are covered previously in this Report.
Outlook
The footwear industry is expected to be driven by higher disposable income and aspiration for branded footwear.
India''s retail sector is experiencing exponential growth with retail development taking place not just in major cities and metros but also in small cities. However, factors like rising rentals in commercial real estate market, enhanced volatility in global financial systems, etc., also continue to pose challenges to the industry.
Brick-and-mortar store formats continue to be in demand driven, by macroeconomic factors such as rapid urbanisation, rising affluence and evolving consumer preferences. Retail leasing demand, dominated by fashion and apparel retailers, surpassed the supply of new availability in 2024.
India''s e-commerce market is projected to reach USD 325 Billion by 2030. However, e-commerce return rates are much higher in Fashion & Apparel categories, posing a threat to online sales profitability.
Accordingly, your Company is expanding its physical footprint, majorly through Franchise route in Tier 3 -
5 cities and its digital footprint through its own website and marketplaces in footwear and accessories category. Your Company is building style
6 fashion forward imagery through influencers, media revamp and store innovations.
The ability to adapt to market conditions & evolving customer expectations and technological advancements, enables your Company to position itself strongly for future growth upon consumption recovery.
Your Company continues to focus on cost efficiency and productivity across all operations including manufacturing facilities, backed by digital transformation for future readiness with cautious optimism.
Risks and Concerns and Contingent Liabilities
Your Company acknowledges the footwear industry is undergoing transformation. Customer needs and expectations from footwear industry, purchasing channels and buying habits are evolving. New expectations around fashion, affordability, shopping experience, product discoverability, etc., are influencing business growth drivers and key initiatives. Your Company is cognizant of the fact that competition from both domestic and international players, especially at the bottom of the pyramid, is increasing.
Your Company acknowledges that continuous evolution of the product portfolio mix is required to maintain relevance of Bata Brand amongst Millennials and the Gen Z. Your Company also realises that modernisation of I.T. systems alongwith having suitable protection from risk of loss / theft of data / other vulnerabilities is a key requirement for business continuity. Your Company continuously adapts to comply with relevant changes in the Government laws and policies to minimise any adverse impact on sales, cost and operations. Your Company also monitors external factors such as raw material prices, inflation and other geo-political factors to assess and mitigate any adverse effect on business and results of operations.
Your Company monitors its major risks and concerns at regular intervals. Appropriate steps are taken in consultation with all concerned including the RCM Committee and the Audit Committee to identify and mitigate such risks.
During the normal course of its business operations, your Company has been subjected to litigations in connection with or incidental thereto. These litigations include civil cases, GST and customs related cases, etc., filed by and against the Company. These cases are being pursued with due importance and in consultation with legal experts in respective areas. Your Board believes that the outcome of these cases is unlikely to cause a materially adverse effect
on the Company''s profitability or business performance. Your Company has a Contingent Liability of Rs. 237.93 Million as on March 31, 2025 as compared to Rs. 313.32 Million as on March 31, 2024. Attention is drawn to the explanations mentioned in Note No. 29 of the Notes to Financial Statements for the financial year ended March 31, 2025. In view of the present status and based on legal advice obtained from time to time, your Board is of the opinion that no provision is required to be made against these Contingent Liabilities.
Internal control systems and their adequacy
A separate paragraph on internal control systems and their adequacy has been provided elsewhere in this Board''s Report.
Discussion on financial performance
The Earnings per Share (EPS - Basic and Diluted) of your Company for the financial year ended March 31, 2025 was at Rs. 25.55 as compared to the (EPS -Basic and Diluted) for the previous financial year ended March 31, 2024 at Rs. 20.22. Your Company recorded an EBITDA margin of 21.07% during the financial year under review as compared to 22.52% during the financial year 2023-24.
Your Company does not have any Bank Borrowings and the entire capital expenditure has been funded through internal sources.
The Capital Expenditure incurred during the year under review amounted to Rs. 3,375.66 Million as compared to Rs. 1,188.57 Million in the previous year.
Details of significant changes in key financial ratios alongwith explanation
In compliance with the requirement of the Listing Regulations, the key financial ratios of the Company alongwith explanation for significant changes (i.e., for change of 25% or more as compared to the immediately previous financial year), has been provided hereunder:
|
Sl. No. |
Particulars |
2024-25 |
2023-24 |
|
(i) |
Debtors to Sales (in days) |
12 |
9 |
|
(ii) |
Inventory to Turnover Ratio (in times) |
1.75 |
1.63 |
|
(iii) |
Interest Coverage Ratio* |
3.3 |
4.3 |
|
(iv) |
Current ratio |
1.82 |
2.10 |
|
(v) |
Debt Equity Ratio** |
0.92 |
0.89 |
|
(vi) |
Operating Profit Margin (%) |
12.3 |
14.7 |
|
(vii) |
Net Profit Margin (%) |
9.42 |
7.5 |
|
(viii) |
Return on Net worth (%) |
20.98 |
17.1 |
|
*There is no borrowing in the Company. However, Finance cost includes interest expenses accounted for various deposits in accordance with Ind AS 109, Financial Instruments and interest expense accounted on various lease contracts in accordance with Ind AS 116. |
|||
|
**Leases has been considered as debts. |
|||
The significant change in Debtors to Sales Ratio is due to change in credit terms with E-commerce vendors. Also, the significant change in Net Profit Margin % is due to an exceptional gain on sale of land during the year under review. Other than these, there have been no significant changes over previous years across all other ratios.
Return on Net worth has changed due to an exceptional gain on sale of land during the year under review.
For further explanation, please refer to Note no. 41 of the Notes to Standalone Financial Statements for the year ended March 31, 2025.
The other financial ratios of the Company relating to previous 10 years has been provided in other part of this Annual Report.
Material developments in the human resource / industrial relations front, including number of people employed
Your Company has been continuously working to advance human resources skills, competencies and capabilities within the organisation, which are critical to achieve desired results in line with the strategic business ambitions. Some key initiatives taken in this direction during the year under review are summarised below:
⢠Industrial Relations: Your Company consistently maintained harmonious and peaceful Industrial relations across all manufacturing units. The positive environment is largely attributed to the active participation of employees in the collective bargaining process. The collaborative
approach has led to a stable and productive workplace, where both parties work together to achieve common goals, enhancing overall efficiency and morale.
- Signoff Negotiation of Long-Term Agreement (LTA) with the worker''s union at Bataganj manufacturing unit in Bihar, was achieved during the year under review.
- Successful implementation of VRS for eligible workmen at Batashatak manufacturing unit in Tamil Nadu.
- During the year under review, your Board approved closure of Southcan Unit in Karnataka, since VRS was implemented in its previous financial year.
Employee Development and Learning: Your Company continued to invest in comprehensive employee development through Bata e-University for managerial staff and the revitalised Bata Training Academy for Retail and IHM teams. Programs like Udaan were celebrated with pan-India felicitations and the newly launched STEP UP - Career Elevation Program provided growth pathways from Store Manager to District Manager roles.
⢠New Headquarters - A Leap into the Future:
As Bata Group marked its 130th anniversary, your Company inaugurated its state-of-the-art headquarters at Milestone Experion Centre, Gurugram. This Platinum LEED and GRIHA-certified building represents the future of sustainable, smart and collaborative workspaces. Embracing Blue Sky Thinking, the space
integrates smart technology, wellness-focused amenities, open working zones and eco-friendly infrastructure, reinforcing your Company''s commitment to innovation, sustainability and employee experience.
⢠Diversity, Equity, Inclusion & Belonging: Your Company was recognised as one of the Best Organizations for Women 2025 by ETNOW. As part of its continued efforts to create a more inclusive workplace, your Company launched Project Bharti, a structured initiative to hire, develop and retain female store managers.
Prestigious accolades such as DivHERsity Award by HerKey for one of the Top 20 Most Innovative Women L&D Programs in India and NHRD Diversity & Inclusion Award were awarded for exemplary leadership in embedding D&I into business and culture, further reinforced this commitment.
Mandatory awareness sessions on Prevention of Sexual Harassment at Workplace (POSH) were conducted across locations.
⢠Employee Safety & Wellness: A dedicated Emergency Response Team was activated to ensure employee safety, with National Safety Week celebrated across offices.
Under the BeWell at Bata initiative, multiple wellness sessions and health check-up camps were organised, including activities for Mental Health Awareness Month.
⢠Talent Acquisition: An AI-powered digital recruitment platform was launched to enable efficient and data-driven talent acquisition.
In conclusion, your Company continues to foster a culture of learning, inclusivity, innovation and wellbeing in line with the people-first philosophy. From strengthening industrial harmony to embracing cutting-edge digital tools, launching inclusive initiatives like Project Bharti and unveiling a future-ready headquarters, the year under review has been a testimony to the commitment of your Company to create a workplace where every employee thrives.
As on March 31, 2025, there were 3961 permanent employees / workers on the rolls of your Company.BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT(BRSR)
In compliance with Regulation 34(2)(f) of the Listing Regulations, your Company is pleased to publish its 3rd Business Responsibility and Sustainability Report (BRSR) for the financial year 2024-25, in a fair and transparent manner, covering the essential indicators that are required to be reported on a mandatory basis in the prescribed format. The Report is aligned with your Company''s approach towards sustainable, inclusive and resilient development, which is annexed to the Board''s Report and marked as Annexure - IX. The BRSR also contains further information on conservation of energy, technology absorption, R & D and energy conservation activities of the Company.
The BRSR has been uploaded on the website of the Company at www.bata.in and is available at the link https://www.bata.in/bataindia/a-29_s-181_c-42/ investor-relations.html
Annexures forming part of this Report
The Annexures referred to in this Report and other information which are required to be disclosed are annexed herewith and form part of this Report:
|
Annexure |
Particulars |
|
I Secretarial Audit Report |
|
|
II |
Corporate Governance Report |
|
III |
Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo |
|
IV & V |
Annual Report on CSR activities and CSR Policy (Salient features) |
|
VI |
Nomination and Remuneration Policy |
|
VII & VIII |
Disclosures on remuneration of directors and employees of the Company |
|
IX |
Business Responsibility and Sustainability Report |
Considering the provisions of Section 136 of the Act, this Annual Report, excluding the information on remuneration of employees in terms of Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended), is being sent to the members of the Company and others entitled thereto. The said information would be available for inspection, by members, at the Registered Office of the Company or through electronic mode, during business hours on working days upto the date of the 92nd AGM of the Company. Any member interested in obtaining a copy thereof may write in this regard to the Company Secretary of the Company.
During the year under review, no transaction or event took place in relation to other items which are not applicable to your Company and accordingly, they have not been separately commented upon.
There are certain statements which have been made in the Management Discussion and Analysis Report describing the estimates, expectations or predictions, may be read as ''forward-looking statements'' within the meaning of applicable laws and regulations. The actual results may differ materially from those expressed or implied. The important factors that would make a difference to your Company''s operations include demand-supply conditions, raw material prices, changes in Government Policies, Governing Laws, Tax regimes, Global Economic Developments and other factors such as litigation and labour negotiations.
ACKNOWLEDGEMENT AND APPRECIATION
Your Board is thankful to our customers for their continuous patronage and remains committed to serving them by delivering more style and comfort at every step.
Your Board acknowledges with thanks the support of all business partners, suppliers, vendors, associates and dealers as well as the regulatory authorities of the Central and State Governments in India. Your Board looks forward to their continued support in the coming years as well.
Your Board is deeply thankful to the investors and shareholders for their unwavering confidence and faith. Your Board is also grateful to Bata Shoe Organization (BSO) for their continuous guidance and support. Your Board also thanks the communities, who have reposed their trust in us.
Your Board acknowledges and appreciates the hard work and commitment by employees, workmen and staff including the Management headed by the Executive Directors who worked together as a team in meeting the challenges of external business environment and achieving a resilient business performance. Your Board also places on record its deep appreciation for the guidance, experience and wisdom provided by the Independent Directors and the Non-Executive Directors that helped your Company to take the appropriate decisions in progressing towards its business goals.
Mar 31, 2024
The Directors are pleased to present the 91st Annual Report covering the operational and financial performance of your Company along with the Audited Financial Statements for the financial year ended March 31, 2024.
FINANCIAL HIGHLIGHTS & PERFORMANCE
|
(Rs. in Million) |
||
|
Particulars |
Financial Year ended on March 31, 2024 |
Financial Year ended on March 31, 2023 |
|
(Audited) |
(Audited) |
|
|
Revenue from operations |
34,784.13 |
34,515.68 |
|
Other Income |
614.73 |
373.51 |
|
Total Income |
35,398.86 |
34,889.19 |
|
Profit before exceptional item |
3,895.32 |
4,256.30 |
|
Exceptional Item |
409.00 |
NIL |
|
Profit before Taxation |
3,486.32 |
4,256.30 |
|
Provision for Taxation |
887.07 |
1,065.13 |
|
Net Profit |
2,599.25 |
3,191.17 |
|
Other Comprehensive Income (net of tax) |
(3.16) |
10.29 |
|
Total Comprehensive Income |
2,596.09 |
3,201.46 |
Your Company has prepared the Financial Statements for the financial year ended March 31, 2024, in terms of Sections 129, 133 and other applicable provisions, if any, of the Companies Act, 2013 (as amended) (the âActâ) and Schedule III thereto read with the Rules framed thereunder.
During the financial year ended March 31, 2024, your Company achieved a turnover of Rs. 34,784.13 Million as compared to the turnover of Rs. 34,515.68 Million recorded during the previous financial year ended March 31, 2023, registering a growth of 0.78%. Your Company posted a profit of Rs. 3,895.32 Million, before exceptional item and taxes, for the financial year ended March 31, 2024, as against Rs. 4,256.30 Million for the financial year ended March 31, 2023. The exceptional item of Rs. 409.00 Million is towards a scheme of VRS, introduced at one manufacturing unit, during the financial year ended March 31, 2024. Your Company posted a Net Profit of Rs. 2,599.25 Million for the financial year ended March 31, 2024, as against the Net Profit of Rs. 3,191.17 Million for the financial year ended March 31, 2023. Gross Profit expanded by 89 bps for the financial year ended March 31, 2024, showcasing consistent efficiency improvements across operations.
Significant investments behind Brand and technology made during the year under review impacted net margins.
On a consolidated basis, your Company reports a turnover of Rs. 34,786.10 Million during the financial year ended March 31, 2024 and a consolidated Net Profit of Rs. 2,625.11 Million for the said financial year.
OPERATIONAL HIGHLIGHTS & PERFORMANCE
Your Company continued to be India''s favorite footwear brand. Your Company retails through a PAN India network of 1862 COCO and Franchise Stores, its own website (www.bata.in), and major marketplaces. Your Company has a robust e-commerce network that delivers across the country.
Your Company witnessed premiumisation as a trend that soared post pandemic. However, in 2023, a wider gap appeared in India''s discretionary consumer spending, as retailers registered higher sales of premium, high-priced articles as against low-priced items.
During the year under review, your Company witnessed a steady growth in demand for premium and casual footwear. This demand translated into the growth of Average Selling Price (ASP) and gain in the share of higher category articles in brands like Hush Puppies, Red Label, Floatz and North Star. Our strategy for premiumisation continues progressively.
As Indian consumers shift up the income pyramid, small towns also saw surge in demand for premium
products. Aspirations for branded products, ease of digital payments and the impact of digital marketing & social media, attracted consumers from Tier 3 - 5 cities.
Your Company continues to expand its retail network, renovate stores to elevate customer experience and accelerate expansion through Franchise and Distribution networks. Due to strong Brand recall, your Company has been witnessing increasing interest for opening of franchise stores. Your Company crossed the milestone of 500 Franchise stores for the first time, taking a leap forward in its retail footprint. Distribution channel was scaled up to 1500 towns.
Your Company continued to implement initiatives to elevate customer experience at its stores and on its website. During the year under review, your Company renovated 180 stores with significant thrust towards portfolio newness with style and technology propositions.
During the year under review, your Company introduced a series of innovations like Bata Shoe Care Program, Buy Now Pay Later and Bata Wallet.
Your Company witnessed deceleration in the discretionary spending front that started towards the end of March 2023. While your Company experienced scattered green shoots during the year under review on occasions such as festive seasons, wedding seasons, etc., the overall demand in the footwear segment remained subdued.
India is at the intersection of sports, fitness, fashion and the casualisation of lifestyle. Consumer demand for casual footwear is driving growth. There was a distinct shift in consumer mindset including brand consciousness and accordingly, your Company maintained its focus on evolution of its product portfolio with the strategy of casualisation and premiumisation. Sneaker Studio were expanded to over 650 Bata and Franchise stores during the year under review.
âFloatzâ - a casual, washable and comfortable footwear continued to perform exceptionally well. Leveraging the success of Floatz, your Company expanded the Floatz banner in another 400 stores.
Your Company continues to make investments behind marketing campaigns, to pivot the Brand on style, modernity and youthfulness with high levels of portfolio freshness. Catering to the consumer
trends of casualisation, your Company launched âEvery Walk is a Ramp Walkâ that has met encouraging response and impact on the Brand. Other campaigns launched during the year under review - âBata Celebrationâ, âCasual Styleâ further elevated connect with customers.
Your Company has one of the largest Omni-network in India covering over 1700 stores. The Omni-channel of your Company recorded a handsome share of the total sales.
E-commerce business continued its steady growth path during the year under review. Both bata.com and marketplace channels grew significantly over last year.
In addition, Home Delivery Services now have been extended to all Franchisee stores.
Investment in technology integrations improved customer experience on Bata.com, Returns and Refunds. Your Company has invested in two large projects - HPM and ERP. As a fashion trend setter, your Company invested in High Performance Merchandising (HPM) technology, for seamless end-to-end planning, to service customers with best offerings by understanding demand better, predicting trends at granular levels and effective replenishment of latest collection in the stores. During the year under review, HPM was implemented. The entire process upto replenishment of stores is now automated. ERP implementation is further going to enhance productivity and support efficient future growth.
The Distribution Business and B2B Business of your Company remained subdued due to supply chain congestion caused by lower secondary sales. B2B business has been steady on Amazon and Flipkart with sharp focus on growth opportunities across categories and brands and continues to be among the top footwear brands on both Amazon and Flipkart. During the year under review, your Company witnessed growth in school, ladies VAC and sports categories.
Your Company stepped-up its infrastructure to enhance productivity and efficiencies across the value chain. Your Company successfully implemented VRS at one of its manufacturing unit. Your Company continues to implement its strategies of L2L sourcing, import substitution, etc., to support Speed-to-Market and margin improvement across Retail and I&D businesses.
For the year under review, margins remained healthy across all business channels of EBOs, MBOs and E-Commerce, despite slowness in discretionary demand.
Your Company continues to focus on efficiency and productivity backed by digital transformation for future readiness with cautious optimism.
As a responsible corporate citizen and a trusted Brand, your Company is committed towards its social responsibilities through various initiatives, details of which are covered subsequently in this Report.
The Authorised Share Capital of your Company as on March 31, 2024, stood at Rs. 700 Million divided into 140,000,000 equity shares of Rs. 5/- each. The Issued Share Capital of your Company is Rs. 642.85 Million divided into 128,570,000 equity shares of Rs. 5/- each and the Subscribed and Paid-up Share Capital is Rs. 642.64 Million divided into 128,527,540 equity shares of Rs. 5/- each, fully paid-up.
The Board, at its meeting held on May 18, 2023, reviewed and amended the Dividend Distribution Policy to include a provision that subject to the general considerations and other parameters / conditions as mentioned in the Policy and further subject to adequate Retained Earnings to meet requirements of capital expenditure, including for distribution, supply chain, technology and strategic initiatives and working capital, your Board shall endeavour to pay / recommend a dividend having pay-out of upto 60% of Profit After Tax for that year. This provision is effective for dividend for the financial year 2022-23 and onwards.
In line with the amended Dividend Distribution Policy of your Company, your Board recommends a Dividend of Rs. 12/- (240%) per equity share of Rs. 5/- each, fully paid-up of your Company, for the financial year ended March 31, 2024. The dividend, if declared, by the Members at the forthcoming Annual General Meeting (AGM) shall be paid to the eligible Members of the Company from Thursday, August 22, 2024 onwards. The total payout of aforesaid dividend would be approximately Rs. 1542.33 Million.
The amended Dividend Distribution Policy has been uploaded on the website of the Company at www.bata.in under the tab âInvestor Relations > Company Policiesâ at https^www.bata.in/company-
policies.html and is available at the link https:// www.bata.in/on/demandware.static/-/Sites-bata-in-Library/default/ veadaf24d0adb1bcaa378b1c1293c96d71a988b9e/ pdf/CP_1905-Dividend-Revised_2023.pdf
Pursuant to the Finance Act, 2020 read with the Income-tax Act, 1961, the dividend paid or distributed by a company shall be taxable in the hands of the shareholders w.e.f. April 1, 2020. Accordingly, in compliance with the said provisions, your Company shall make the payment of dividend after necessary deduction of tax at source at the prescribed rates. For the prescribed rates for various categories, the shareholders are requested to refer to the Finance Act, 2020 and amendments thereof.
Your Company has not transferred any amount to the General Reserve during the financial year ended March 31, 2024.
Your Company has no unclaimed / unpaid matured deposit or interest due thereon since December 31, 2013. Your Company has not accepted any deposits covered under ''Chapter V - Acceptance of Deposits by Companies'' under the Act during the financial year ended March 31, 2024.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
In terms of Section 186 of the Act and Rules framed thereunder, details of the Loans given and Investments made by your Company have been disclosed in Note No. 5 of the Notes to Financial Statements for the financial year ended March 31, 2024, which forms part of this Annual Report. Your Company has not given any guarantee or provided any security during the year under review. The disclosure as per Rule 8(5)(xii) of the Companies (Accounts) Rules, 2014, as amended, is not applicable to your Company.
During the financial year ended March 31, 2024, all transactions with the Related Parties as defined under the Act read with Rules framed thereunder, were in the ordinary course of business and at arm''s length basis. Your Company does not have a ''Material Subsidiary'' as defined under Regulation 16(1)(c) of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 (as amended) (the âListing Regulationsâ).
During the year under review, your Company did not enter into any Related Party Transaction which requires prior approval of the Members of your Company. All Related Party Transactions entered into by your Company had prior approval of the Audit Committee and the Board of Directors, as required under the Listing Regulations. Subsequently, the Audit Committee and the Board have also reviewed the Related Party Transactions on a quarterly basis. During the year under review, there have been no materially significant Related Party Transactions having potential conflict with the interest of your Company.
Since all Related Party Transactions entered into by your Company were in the ordinary course of business and also on an arm''s length basis, therefore, details required to be provided in the prescribed Form AOC - 2 are not applicable to your Company. Necessary disclosures required under the Ind AS 24 have been made in Note No. 33 of the Notes to the Financial Statements for the financial year ended March 31, 2024.
Investor Education and Protection Fund (IEPF)
In compliance with Sections 124 and 125 of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (âIEPF Rulesâ) as amended from time to time, a sum of Rs. 21,66,318/- has been deposited into the specified bank account of the IEPF, Government of India, towards unclaimed / unpaid dividend amount for the financial year ended March 31, 2016.
As per the IEPF Rules, the corresponding equity shares in respect of which Dividend remains unclaimed / unpaid for seven consecutive years or more, are required to be transferred to the Demat Account of the IEPF Authority. During the year under review, your Company has transferred 33,872 underlying Equity Shares to the Demat Account of the IEPF Authority, in compliance with the aforesaid Rules.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN END OF THE FINANCIAL YEAR AND THE DATE OF THIS REPORT
Except those disclosed in this Annual Report, there
are no material changes and commitments affecting the financial position of your Company between the end of the financial year i.e., March 31, 2024 and the date of this Report.
SUBSIDIARIES
During the year under review, no company became or ceased to be a subsidiary, joint venture or associate of your Company. As on the date of this Report, your Company has two wholly owned subsidiaries viz., Bata Properties Limited and Way Finders Brands Limited (WFBL).
The Annual Reports of these Subsidiaries will be made available for inspection by any Member of the Company at the Registered Office of your Company at 27B, Camac Street, 1st Floor, Kolkata - 700016, West Bengal, between 11:00 A.M. and 1:00 P.M. on any working day upto the date of ensuing AGM. The Annual Reports of the aforesaid Subsidiaries for the financial year ended March 31, 2024, shall be provided to any Member of your Company upon receipt of written request. Members may also send an advance request at the e-mail id -share.dept@bata.com for an electronic inspection of the aforesaid documents.
The Annual Reports along with the Audited Financial Statements of each of the Subsidiaries of your Company are also available on the website of your Company at www.bata.in
During the year under review, WFBL was engaged in manufacturing of closed footwear. Further, pursuant to Section 129(3) of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014 (as amended), a statement containing the salient features of Financial Statements of the aforesaid Subsidiaries (including highlights of their performance and contributions to the overall performance of the Company) has been provided in Form AOC - 1 which forms part of this Annual Report.
The Audited Consolidated Financial Statements (CFS) of your Company for the financial year ended March 31, 2024, prepared in compliance with Ind AS issued by the Institute of Chartered Accountants of India (ICAI) and notified by the Ministry of Corporate Affairs (MCA), Government of India also form part of this Annual Report.
Details of the Subsidiaries are given in the Annual Return in Form No. MGT - 7 as on March 31, 2024. The Annual Return referred to in Section 92(3) of
the Act is available on the website of your Company at www.bata.in under the tab âInvestor Relations > Annual Reportsâ under the link https://www.bata.in/ annual-reports.html
AUDIT AND AUDITORSStatutory Auditors
In terms of Section 139 of the Act read with the Companies (Audit and Auditors) Rules, 2014 (as amended), M/s. Price Waterhouse Chartered Accountants LLP (âPwCAâ) (ICAI Firm Registration No. 012754N/N500016), Chartered Accountants was appointed as the Auditors of your Company for a consecutive period of 5 (five) years from the conclusion of the 89th AGM held in the year 2022 until conclusion of the 94th AGM of your Company.
PwCA has not informed the Company regarding any condition rendering them ineligible to continue as the Auditors of the Company in terms of the provisions of the Act and the Rules framed thereunder. A copy of the certificate issued by the Peer Review Board (ICAI) as required under Regulation 33 of the Listing Regulations has been submitted by PwCA to the Company.
The reports given by the Auditors on the Standalone and Consolidated Financial Statements of your Company for the financial year ended March 31, 2024, form part of this Annual Report and there is no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Reports. The Auditors of your Company have not reported any fraud in terms of the second proviso to Section 143(12) of the Act.
In terms of Section 204 of the Act, read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended), your Board at its meeting held on May 18, 2023 appointed M/s. Chandrasekaran Associates, (FRN: P1988DE002500), Company Secretaries, 11-F, Pocket - IV, Mayur Vihar Phase - I, Delhi - 110091, as the Secretarial Auditors of your Company, to conduct the Secretarial Audit for the financial year ended March 31, 2024 and to submit Secretarial Audit Report thereon.
The Secretarial Audit Report as received from M/s. Chandrasekaran Associates in the prescribed Form No. MR - 3 is annexed to this Board''s Report and
marked as Annexure - I and does not contain any qualification, reservation, adverse remark or disclaimer.
In compliance with Regulation 34 of the Listing Regulations read with Schedule V thereto, the Corporate Governance Report of your Company for the financial year ended March 31, 2024 is annexed as Annexure - II and forms part of this Annual Report. The details of Credit Rating are given in the said report.
Other disclosures required to be made under the Listing Regulations, the Act and the Rules made thereunder, have been included in the Corporate Governance Report and / or the Financial Statements for the financial year ended March 31, 2024 to avoid repetition in this Board''s Report.
SIGNIFICANT AND MATERIAL LITIGATIONS / ORDERS
During the year under review, there were no significant material orders passed by the Regulators / Courts and no litigation was outstanding as on March 31, 2024, which would impact the going concern status and future operations of your Company. The details of litigation on tax matters are disclosed in the Auditor''s Report and Financial Statements which form part of this Annual Report. During the year under review, an application under the provisions of the Insolvency and Bankruptcy Code, 2016 (as amended) (the âIB Codeâ) was filed against Bata India Limited for recovery of purported dues. The said application is not yet admitted by NCLT and your Company has a good case to defend the same without any material financial impact. Except this, no other Corporate Insolvency Resolution application was made or proceeding was initiated, by / against Bata India Limited under the IB Code. Further, no other application / proceeding by / against Bata India Limited under the IB Code is pending as on March 31, 2024.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
In compliance with Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 (as amended), a statement containing information on conservation of energy, technology absorption, foreign exchange earnings and outgo of your
Company, in the prescribed format, is annexed to this Board''s Report and marked as Annexure - III.
Your Company has an elaborate system-driven compliance programme in place, including for thorough pre-review of the on-boarding procedure in case of a new manufacturing partner in-sourcing and also for an associate manufacturer for its own factories. This includes clearance of documents and a detailed compliance audit prior to approval. With respect to Social & Environmental Responsibility (SER) audits of its value chain sourcing partners, 52 audits were performed in 2023, resulting in a total average score of 90.1%. The factories have been audited by third party auditors and vendors are audited by Bata''s internal auditors to check their level of compliance.
Your Company has achieved benchmarks for its own factory in the fields of Quality Management Systems (ISO 9001:2015), Environmental Management Systems (ISO 14001:2015) and Occupational Health & Safety Management Systems (ISO 45001:2018).
Your Company was recognised as 1st license holder of Rubber Hawaii as per IS:10702:1992 by BIS-Kolkata and received Winner Award (under Large Industry Category) under the ZED stream (Zero Defect in Manufacturing & Zero Effect on Environment) in the CII National ZED Competition and subsequently in the fields of Environment, Cost Savings and Quality. Products of your Company meet the optimal Quality Specifications and the systematic approach towards Zero Defect by implementation of DMAIC process for continuous improvement and sustainable development.
To remain competitive, your Company continues to focus on innovation. âLife Naturalâ antimicrobial material is offered for School shoes (Tennis, Naughty Boy, Scout Ballerina and Hawaii Flip-Flop).
Under Sustainable initiatives, your Company converted the fuel from HSD to LPG for Thermopack, thereby, potentially reducing CO2 and SO2 emissions. Your Company also implemented 3R (PVC, Rubber & EVA, Laminated Textile waste, along with reduction initiatives like LED, Motion Sensors, efficient air compressors, VFD/Servo motors, Turbo ventilators, integrated APFC electrical panels) initiative of âReduce, Reuse & Recycleâ program. Additionally, your Company also have set-up Zero
Discharge facilities, Sewage Treatment Plants and Rain-Water Harvesting in various units.
Your Company continued its focus on enhancing its capability and capacity by partnering with strategic suppliers and thereby also delivering a cost advantage. Strategic sourcing initiatives like L2L, import substitution, etc., continue to contribute and have supported Speed-to-Market and helped in significant margin improvements.
RESEARCH AND DEVELOPMENT ACTIVITIES AND ENERGY CONSERVATION
Research and Development activities during the year under review continued to emphasise on creating a pollution-free and a safe work environment. Technological improvement in product development, material development, introduction of new footwear moulds, process improvement, etc., were the key focus areas to improve quality of footwear and productivity in manufacturing. Your Company developed Nail Penetration Resistance Safety Boot as per BIS norms IS 15298-Part 2: 2016, Rubber Canvas Miners Boot - IS - 3976:2018, Rubber Canvas PT. Shoe - IS:3735:1996, Rubber Canvas J.F. Hunter Boot - IS:3736:1995, Leather Miners Boot - IS:1989 (Part 1) 1986, Leather Safety Boot for Heavy Metal Industry - IS:1989 (Part 2), Hawai Chappal -IS:10702:2023, Sports Shoes - IS:15844:2023 (Part 1), Sandal & Slippers - IS:6721:2023 along with SEDEX Certification.
An expenditure of Rs. 58.71 Million was incurred on Research and Development (including product development initiatives) during the year under review, as against Rs. 63.72 Million during the financial year 2022-23.
Your Company achieved reduction of air pollution and emissions at its Batanagar Factory by Briquette Consumption of 758 Ton. Your Company shall continue to invest on Research and Development activities and energy saving measures in its manufacturing units.
Further information on conservation of energy and technology absorption are annexed to this Report and marked as Annexure - III.
CORPORATE SOCIAL RESPONSIBILITY
Your Company operates on the belief that an organisation should exist to serve a social purpose and enhance the lives of people connected through its business. Your Company has a CSR Policy in place
which aims to ensure that your Company continues to operate its business in an economically, socially and environmentally sustainable manner, while recognising the interests of all its stakeholders. It takes up CSR programmes which benefit the communities in and around the vicinity of its operational presence, resulting in enhancing the quality of lives of the people in those areas.
Details of composition of CSR Committee and other relevant details have been provided in the Corporate Governance Report.
A sum of Rs. 25,883,847 (inclusive of amount required to be set-off) was spent on various CSR initiatives (covered hereinafter in this Report) for the financial year ended on March 31, 2024. The unspent amount of Rs. 5,361,181 is towards certain ongoing projects and has been transferred to Unspent CSR Account as per Section 135(6) of the Act. The Annual Report on CSR activities, containing details of CSR expenditure, details of excess amount spent, etc., is appended as Annexure - IV to this Report.
The salient features of the CSR Policy of your Company is appended as Annexure - V to this Report and the complete policy has been uploaded on the website of your Company at www.bata.in under the tab âInvestor Relations > Company Policiesâ at https://www.bata.in/on/demandware.static/-/Sites-bata-in-Library/default/ vca1a6dc6c6c9dd1e1b2bd451ba8726ee06c054d7/ Staticpagesimages/Company%20Policies/CSR-Policy-Bata-India-Ltd-2021.pdf
There has been no change in the CSR Policy during the year under review.
Your Company continued to demonstrate its social commitment to the communities in and around which it operates. During the financial year 202324, CSR (Corporate Social Responsibility) initiatives of your Company, reflected our commitment to societal well-being and sustainable business practices. Aligned with global Sustainable Development Goals (SDGs), your Company primarily focused on quality education, healthcare, environmental conservation and gender equality.
Promoting EducationBata Childrenâs Program
Through our initiatives, including the Bata Childrenâs Program (BCP), we reached over 5300 children, enhancing academic performance and inclusive
education for children with disabilities. BCP Program continued to focus on other critical areas like Sports, mental health & well-being, STEM Learning, Foundational Literacy & Numeracy, etc.
Under our âStride with Pride" program, we prioritised sustainability and foot care awareness, benefitting over 3100 underserved individuals.
Environment Sustainability Projects
Environmental sustainability projects included rainwater harvesting structure and solar power installations in various schools, conserving water and reducing CO2 emissions by an estimated 700 tonnes.
Bata continued to implement one of the most needed programs on menstrual hygiene & awareness wherein we addressed the availability of sanitary facilities, awareness about myths related to menstrual health and the importance of nutrition for good health & well-being. On one hand, the program focused on the eco-system by sensitising adolescent girls, teachers, parents and school management committees by raising awareness about menstrual hygiene and on the other, it promoted positive masculinity among schoolboys.
Bata Heroes - Employee Volunteering
Employee volunteering continued to play a significant role, with over 4000 hours dedicated to community service. Activities were organised on special occasions to support the society and enthusiastic participation was seen by the Bata team. While addressing the needs of the community through CSR initiatives, the Company also encouraged its employees to participate in the cause through employee volunteering. It is a core objective to make employee volunteering a self-driven culture of the organisation. Thus, in a planned manner, activities were curated for employees to contribute, such as organising/conducting sessions on important days like World Health Day, Earth Day, Children''s Day, etc. Bata employees also participated in winter donation drive and supported other charities for a cause.
Your Company made significant strides to harness all its resources towards the successful execution of CSR projects across all locations.
SUPPORT FROM BATA SHOE ORGANIZATION
Your Company continues to receive support from the Holding Company - Bata (BN) B.V., Amsterdam, The Netherlands and also from Bata Shoe Organization (BSO). Your Company also enjoys the benefits of technical research through Global Footwear Services Pte. Ltd., Singapore (GFS). Your Company has renewed the Technical Collaboration Agreement with GFS with effect from January 1, 2021 for a period of ten years. In terms of the said Agreement, your Company receives guidance, training of personnel and services from GFS in connection with research & development, marketing, brand development, footwear technology, testing & quality control, store location, layout & design, environment, health & safety, risk & insurance management, etc. Your Company continues to obtain expertise and experience from the personnel of GFS and other BSO group companies to improve its product range and operational processes throughout the year. In terms of the said Agreement, your Company has paid technical services fee of Rs. 498.71 Million to GFS for the financial year ended March 31,
2024, which is around 1.43% of the Turnover of your Company.
BOARD OF DIRECTORS, BOARD MEETINGS AND KEY MANAGERIAL PERSONNELComposition
Your Company''s Board is duly constituted and is in compliance with the requirements of the Act, the Listing Regulations and provisions of the Articles of Association of your Company. Your Board has been constituted with requisite diversity, wisdom, expertise and experience commensurate to the scale of operations of your Company.
During the year under review, a total of 7 (seven) Meetings of the Board of Directors of your Company were held, i.e., on April 25, 2023, May 18, 2023, July 5, 2023, August 9, 2023, November 8, 2023, February 1, 2024 and February 2, 2024. Details of Board composition and Board Meetings held during the financial year 2023-24 have been provided in the Corporate Governance Report which forms part of this Annual Report.
|
Changes in Board Composition Details of changes in the Board Composition during the year under review are as under: |
|||
|
Sl. No. |
Name of the Directors |
Designation & Category |
Reasons and date of appointment / re-appointment / resignation / retirement |
|
1. |
Mr. Anil Ramesh Somani (DIN: 10119789) |
Director Finance and Chief Financial Officer (Executive) |
Appointed as a Whole-time Director (Additional Director) w.e.f. April 25, 2023 and further appointed as Whole-time Director, liable to retire by rotation, through Postal Ballot Process, results of which were declared on July 4, 2023. |
|
2. |
Mr. Alberto Toni (DIN: 08358691) |
Non-Executive Director |
Tendered his resignation as a Director, effective from the close of business hours on May 18, 2023, to pursue opportunities outside Bata Group. |
|
3. |
Mr. Ravindra Dhariwal (DIN: 00003922) |
Independent Director |
Completed his second term of 3 (three) consecutive years on May 26, 2023. |
|
4. |
Mr. Ravindra Dhariwal (DIN: 00003922) |
Non-Executive Director |
Appointed as a Non-Executive Non-Independent Director (Additional Director) w.e.f. May 27, 2023 and further appointed as Non-Executive NonIndependent Director, liable to retire by rotation, for a period of 2 (two) consecutive years commencing from May 27, 2023, through Postal Ballot Process, results of which were declared on July 4, 2023. |
|
5. |
Mr. Ashok Kumar Barat (DIN: 00492930) |
Independent Director |
Re-appointed as an Independent Director, for a second term of 5 (five) consecutive years commencing from December 17, 2023, through Postal Ballot Process, results of which were declared on July 4, 2023. |
|
Sl. No. |
Name of the Directors |
Designation & Category |
Reasons and date of appointment / re-appointment / resignation / retirement |
|
6. |
Ms. Kanchan Chehal (DIN: 09263584) |
Non-Executive Director |
Retired by rotation and re-appointed pursuant to Section 152(6) of the Act at the 90th AGM held on August 10, 2023. |
|
7. |
Mr. Gerd Graehsler (DIN: 10337180) |
Non-Executive Director |
Appointed as a Non-Executive Non-Independent Director (Additional Director) w.e.f. October 12, 2023 and further appointed as Non-Executive Non-Independent Director, liable to retire by rotation, through Postal Ballot Process, results of which were declared on January 8, 2024. |
The Board places on record its sincere appreciation for the services rendered by Mr. Alberto Toni during his tenure.
The Board at its meeting held on May 29, 2024 has appointed Mr. Mukesh Hari Butani (DIN: 01452839) as an Independent Director with effect from June 1, 2024.
The said appointment is subject to approval of the Members of the Company. Further details in this regard are given in the Notice convening the 91st AGM of the Company.
Other details pertaining to the Directors, their appointment / cessation during the year under review and their remuneration are given in the Corporate Governance Report annexed hereto and forming part of this Report.
Director seeking appointment / re-appointment
Mr. Anil Ramesh Somani (DIN: 10119789), Whole-time Director of your Company, is liable to retire by rotation at the ensuing AGM and being eligible, has offered himself for re-appointment. Your Board recommends his re-appointment as a Director of your Company, liable to retire by rotation.
Following directors also seek appointment / reappointment at the ensuing AGM, in respect of whom Notices under Section 160 have been received by your Company and their appointment / reappointment are recommended by the Board:
⢠Re-appointment of Mr. Ashwani Windlass (DIN: 00042686) as an Independent Director.
⢠Appointment of Mr. Mukesh Hari Butani (DIN: 01452839) as an Independent Director.
Necessary Resolution(s) alongwith disclosure(s) / further information(s) in respect of the aforesaid directors seeking appointment / re-appointment at
the ensuing AGM have been given in the Notice convening the 91st AGM of your Company.
As on the date of this Report, following are the Key Managerial Personnel (KMP) of your Company:
1. Mr. Gunjan Shah (DIN: 08525366), Managing Director and Chief Executive Officer.
2. Mr. Anil Ramesh Somani (DIN: 10119789), Director Finance and Chief Financial Officer, who was appointed by your Board as the Chief Financial Officer (KMP), with effect from April 3, 2023 and was subsequently appointed as a Whole-time Director, with effect from April 25, 2023, details of which are given above.
3. Mr. Nitin Bagaria (ACS-20228), Company Secretary & Compliance Officer.
Declaration by Independent Directors
The Independent Directors of your Company have submitted requisite declarations that they continue to meet the criteria of Independence as laid down in Section 149(6) of the Act and Regulations 16(1)(b) and 25(8) of the Listing Regulations and there is no change in the status of their Independence and have confirmed that they are not aware of any circumstance or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties.
The Independent Directors of your Company are in compliance with the requirements under Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014 (as amended).
The Board of Directors further confirms that the Independent Directors also meet the criteria of expertise, experience, integrity and proficiency in terms of Rule 8 of the Companies (Accounts) Rules, 2014 (as amended).
Pursuant to various requirements under the Act and the Listing Regulations, the Board of Directors has constituted various committees, such as, Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Risk & Compliance Management Committee and Corporate Social Responsibility Committee. The details of composition, terms of reference, etc., pertaining to these committees are mentioned in the Corporate Governance Report which forms part of this Annual Report.
The Board has constituted a committee, namely, Business Operations Committee to primarily look into day-to-day matters relating to retail stores, banking, etc. The Board has also constituted dedicated committees, namely, Real Estate Committee and Technology Committee.
The Real Estate Committee is primarily responsible to review, recommend and assist the Board on all matters and transactions relating to the Real Estate of your Company.
The Technology Committee primarily acts as a counsel and assists on Technology Strategies to the Board. It also conducts periodic appraisal of Technology Projects of your Company.
COMPLIANCE WITH SECRETARIAL STANDARDS
During the year under review, your Company has duly complied with the applicable provisions of the Revised Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) issued by the Institute of Company Secretaries of India (ICSI).
The Board of Directors of your Company has duly constituted an Audit Committee in compliance with the provisions of Section 177 of the Act, the Rules framed thereunder read with Regulation 18 of the Listing Regulations. The recommendations made by the Audit Committee are accepted by your Board.
Name of the Audit Committee members, number of meetings held during the year under review, terms of reference and other requisite details have been provided in the Corporate Governance Report which forms part of this Annual Report.
NOMINATION AND REMUNERATION POLICY
Your Board has adopted a Remuneration Policy for identification, selection and appointment of Directors, Key Managerial Personnel (KMPs) and Senior Management Personnel (SMPs) of your Company. The Policy provides criteria for fixing remuneration of the Directors, KMPs, SMPs as well as other employees of your Company. The Policy enumerates the powers, roles and responsibilities of the Nomination and Remuneration Committee. Your Board at its Meeting held on April 25, 2023, amended the provisions relating to appointment of directors and their remuneration in the said Policy.
Your Board, on the recommendations of the Nomination and Remuneration Committee, appoints Director(s) of your Company based on his / her eligibility, experience and qualifications and such appointment is approved by the Members of the Company at General Meetings. The Policy also provides for Board Diversity criteria.
The amended Policy (containing the changes made therein) is appended as Annexure - VI and has been uploaded on the website of your Company at www.bata.in under the tab âInvestor Relations > Company Policiesâ at https://www.bata.in/company-policies.html and is available at the link https:// www.bata.in/on/demandware.static/-/Sites-bata-in-Library/default/ v4630e105168980f045e35a4a408a4a6d759e76c0/ pdf/250423-Bata-Nomination-and-Remuneration-Policy%202023.pdf
Your Company conducts a Board Evaluation process for the Board of Directors as a whole, Board Committees and also for the Directors individually through self-assessment and peer assessment. The details of Board Evaluation process for the financial year 2023-24 have been provided in the Corporate Governance Report which forms part of this Annual Report.
DISCLOSURES ON REMUNERATION OF DIRECTORS AND EMPLOYEES OF THE COMPANY
Details as required under Section 197(12) of the Act read with Rules 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended), are annexed to this Board''s Report and marked as Annexures -VII and VIII. Further, the Non-Executive NonIndependent Directors of your Company (who are a
part of BSO / Bata Group in any executive capacity) do not accept any sitting fees / commission.
DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to Section 134 of the Act, the Directors, to the best of their knowledge and belief, hereby confirm that:
(a) in the preparation of the annual accounts, the applicable accounting standards had been followed;
(b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2024 and of the profit of the Company for that period;
(c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) they have prepared the annual accounts on a going concern basis;
(e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
(f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.
WHISTLE BLOWER POLICY / VIGIL MECHANISM
In terms of Section 177 of the Act and Rules framed thereunder read with Regulation 22 of the Listing Regulations, your Company has a Whistle Blower Policy / Vigil Mechanism in place for the Directors and Employees of your Company through which genuine concerns regarding various issues relating to inappropriate functioning of the organisation can be raised. A Vigil Mechanism Committee under the Chairmanship of the Audit Committee Chairman is also in place. Any concern relating to impact on human rights or issues caused by the business shall also be addressed by the said committee. The Whistle Blower Policy has been uploaded on the website of your Company at www.bata.in under the
tab âInvestor Relations > Company Policiesâ at https://www.bata.in/company-policies.html and is available at the link https://www.bata.in/on/ demandware.static/-/Sites-bata-in-Library/default/ vca1a6dc6c6c9dd1e1b2bd451ba8726ee06c054d7/ Staticpagesimages/Company%20Policies/Whistle-Blower-Policy.pdf
The Policy provides access to the Head - Legal of your Company and to the Chairman of the Audit Committee. No person has been denied an opportunity to have access to the Vigil Mechanism Committee and the Audit Committee Chairman.
CONFIRMATION OF COMPLIANCE ON PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company is committed to provide a safe and secure environment to its women employees across its functions and other women stakeholders, as they are considered as integral and important part of the organisation.
In terms of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (as amended) and Rules framed thereunder, your Company has duly adopted a Policy and has also complied with the provisions relating to the constitution of Internal Complaints Committee (ICC). A summary of the complaints dealt during the financial year ended March 31, 2024, in terms of the said Act and Rules framed thereunder has been provided in the Corporate Governance Report which forms part of this Annual Report.
Your Company has been conducting awareness campaign across all its manufacturing units, warehouses, retail stores and office premises to encourage its employees to be more responsible and alert while discharging their duties.
RISK MANAGEMENT AND ADEQUACY OF INTERNAL FINANCIAL CONTROLS
Your Company''s internal financial controls ensure that all assets of your Company are properly safeguarded and protected, proper prevention and detection of frauds and errors and all transactions are authorised, recorded and reported appropriately. Your Company operates through definitive Chart of Authorities (COAs) and Standard Operating Procedures (SOPs) in respect of its operations including financial transactions. Such COAs and SOPs
are regularly monitored and if required, modified from time to time depending on business requirements.
Your Company has an adequate system of internal financial controls commensurate with its size and scale of operations, procedures and policies, ensuring orderly and efficient conduct of its business, including adherence to the Company''s policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information.
Such practice provides reasonable assurance that transactions are recorded as necessary to permit preparation of Financial Statements in accordance with the applicable legislations and that the same are well within the COAs and SOPs, without exception. Your Company also monitors, through its Internal Audit Team, the requirements of processes in order to prevent or timely detect unauthorised acquisition, use or disposition of the Company''s Assets which could have a material effect on the Financial Statements of the Company. The Internal Audit function is responsible to assist the Audit Committee and Risk & Compliance Management Committee (RCM Committee) on an independent basis with a complete review of the risk assessments and associated management action plans.
Risk Management is embedded in the Company''s operating framework. Your Company believes that risk resilience is key to achieving higher growth. To this effect, there is a robust process in place to identify key risks across the Company and prioritise relevant action plans to mitigate these risks. Risk Management framework is reviewed periodically which includes discussing the management submissions on risks, prioritising key risks and approving action plans to mitigate such risks. An assessment of cyber security has also been carried out in compliance with the requirement of the Listing Regulations and a mitigation plan has been made to counter such risks.
The Internal Audit Report and Risk Inventory Report are reviewed periodically by the Audit Committee and the RCM Committee respectively. The Chief Internal Auditor is a permanent invitee to the Audit Committee Meetings and a member of the RCM Committee. The Audit Committee advises on various risk mitigation exercises on a regular basis. Your
Company has been maintaining a separate Internal Audit Team headed by the Chief Internal Auditor appointed by the Audit Committee of your Board.
Further details pertaining to the RCM Committee and Meetings held during the year under review are given in the Corporate Governance Report. Your Board is of the opinion that the Internal Financial Controls, affecting the Financial Statements of your Company are adequate and are operating effectively.
NON-APPLICABILITY OF MAINTENANCE OF COST RECORDS
The Central Government has not prescribed the maintenance of cost records under Section 148(1) of the Act and Rules framed thereunder with respect to the Company''s nature of business.
MANAGEMENT DISCUSSION AND ANALYSIS REPORTIndustry Structure and Developments
The global footwear market is projected to grow at a CAGR of ~4% during 2023 to 2028, driven by the changing fashion trends and increasing demand for comfortable and stylish footwear with superior quality. With over 85% of the world''s population owning a smartphone coupled with impact of social media and digital advertising, retail e-commerce is expected to grow exponentially with a significant boost in the footwear sales.
India is the world''s second-largest producer and consumer of footwear. Globally, India contributes more than 10% to footwear production and consumes more than 11%. The footwear industry in India contributes 2% to the country''s GDP and generates substantial employment. The footwear market in India is expected to reach USD 90 Billion by 2030. The Industry is constantly evolving with new trends, styles and technologies, making it an exciting and dynamic industry.
Indian retail sector has consolidated remarkably well in 2023, which augurs in favour of the economy, job-creation and growth of brands. Technology innovations, global partnerships and strategic investments are reshaping the retail landscape. Retail accounts for over 10% of India''s GDP and employs 8% of the country''s total workforce. Retail growth is essential for boosting national income and fortifying India''s social infrastructure. By 2030, retail is expected to be the single largest new job creator in the country.
While economic shadows keep looming in the background, India''s retail industry is predicted to rise by over 10% over the next few years, with businesses utilising technology innovations to appeal to both luxury and value customers.
India''s footwear sector is undergoing a tremendous transformation due to a significant shift in consumer preferences and purchasing behaviour. With an increase in awareness about health and fitness, casual footwear saw rapid growth. The industry also witnessed a shift in the perception of footwear from a utility product to a fashion statement. However, the average volume of footwear per person in India is still much below the global average of 3 pairs.
The Indian footwear market is projected to grow at a CAGR of ~4.8% during 2023 to 2028, with volume crossing 2,225 Million pairs by 2028, on the back of factors like:
a) Rise in income and purchasing power. Easy availability of finance.
b) Increase in non-occasion wear purchases and wardrobe refreshes.
c) Continuous increase in working population ratio and higher participation of female workforce.
d) Demand for bigger shopping malls. Higher aspiration levels for branded products.
e) Increase in digital payments and online shopping.
f) Emergence of value products and improved penetration of EBOs in Tier 3 - 5 cities and smaller towns.
g) Higher number of sports and events such as marathons and adventure trips.
However, macroeconomic factors like rate of economic growth, inflation, regulatory changes, unemployment rate, etc., may impact the growth in demand for footwear. Aspirational buying, the spread of e-commerce & digital payments and social media whetting consumer appetite have now taken demand for premium products to small towns too. With increasing consumer demand and expansion of retail e-commerce, the industry is expected to experience significant growth in the coming years.
Your Company continues to work on multiple
initiatives - Driving Portfolio Evolution, Accelerating Expansion via Franchise & Distribution, Marketing Investments, Exploding Digital Footprint, Agile & Efficient Supply Chain, Staying nimble on costs with Talent, Process, Technology investments at the core.
Your Company continues to expand its presence through COCO (Company Owned Company Operated) & Franchise stores, online reach and distribution network.
Your Company also has opportunities in the I&D business, as Bata is the only player which is present across categories and price points. However, the competition continues to grow with unorganised sector moving into organised space.
Apart from the above, casualisation and premiumisation of product portfolio targeting higher ASP and expansion in the market share of premium category, innovation, scaling up digital channels and productivity enhancement will continue to be the priority of your Company along with investments in our brands and stores.
Your Company is optimistic about the opportunity to transform by bringing technological advancements and digital capabilities.
Bata India''s mission is to make global trends and premium fashion accessible to all consumers through its extensive retail network. It is redefining the intersection of fashion and comfort through its various brands - Bata Red Label for in-trend global styles, Bata Comfit for technology enabled comfort in daily wear, athleisure-brand Power for fitness sneakers and apparel, NorthStar for sneakers inspired by global youth trends, fashionable range of clogs and slip-ons under Floatz, kids-brand Bubblegummers that has won the trust of parents while inspiring fun and Hush Puppies-the global brand that epitomizes comfort and elegance to name a few.
Bata India continues to be a strong brand in the footwear industry by consistently delivering on fashion trends with the promise of comfort. Driven by extensive research and deep-rooted consumer insights, the marketing campaigns and communications were meticulously crafted to deliver an exceptional value proposition that resonates with
modern sensibilities and helped your Company to maintain its strong brand image in a highly competitive market.
Recognising the burgeoning sneaker culture around the world, particularly among Gen Z and Millennials, your Company deftly capitalised on this trend with âSneaker Studioâ campaign. The campaign put forth the compelling proposition of 300 sneaker styles from 9 international brands under one roof, establishing Bata as the one-stop destination for sneaker aficionados. Building on the successful pilot and widespread acceptance of the Sneaker Studio Concept, your Company rolled out the concept in 50% of stores during the year under review, providing an immersive and curated shopping experience for the customers.
To address the needs of contemporary Indian women who seek international footwear styles that seamlessly blend fashion and comfort, we launched the â24x7 Glamâ collection with an invigorating campaign featuring brand ambassador and Bollywood actress Ms. Disha Patani.
As leadership styles continue to evolve, your Company set out to strengthen âHush Puppiesâ connect among the young leaders of today. Hush Puppies, under Bata India, proudly partnered with The Economic Times to honour and celebrate the accomplishments of 40 extraordinary leaders at the ET 40Under40. The partnership highlighted your Company''s dedication towards uplifting the next generation of leaders and establishing Hush Puppies as a partner of choice for success.
Celebrating the 75th anniversary of North Star, a brand that has long stood for challenging conventions, freedom of self-expression and an authentic way of life, your Company launched a nostalgic campaign to resonate with the youth. Honouring the past while shaping the future, the campaign highlighted North Star''s enduring appeal and its ability to capture the spirit of generations.
As India entered into the festive season, your Company launched two back-to-back collections under âEvery Walk Is a Ramp Walkâ campaign. Rooted in the insight that anyone can feel like a celebrity with self-confidence and a stylish pair of shoes, the campaign offered a refreshing departure from traditional celebrity endorsements. Your Company strategically invested in the greatest
cricketing event - ICC Men''s Cricket World Cup as an Associate Sponsor on Cricket Live to reach out to the valued customers. Your Company truly made heads turn with this biggest campaign of the year.
Building strong style credentials for Bata India, your Company launched the â10/10â campaign for the spring-summer collection featuring carefully curated casual, glamorous and wedding footwear styles from Bata Red Label, Bata Comfit, NorthStar, Hush Puppies and Bata, designed to transform everyday into an extraordinary 10 on 10 stylish moment for Indian Consumers. The campaign focused on empowering individuals to step out in confidence and express their unique style effortlessly. Strategically timed to coincide with key consumer moments such as the wedding season and the new season, the collection''s launch ensured that customers had access to on-trend styles suitable for every occasion.
Bata India''s comprehensive marketing strategy, encompassing digital campaigns, OOH activations and collaborations with prominent fashion and lifestyle influencers, successfully reached over 14 Million potential customers. This impactful approach resonated with the industry, and your Company won awards like, âMost Admired Marketing Campaign of the yearâ award by IMAGES Fashion Retail, âBest Influencer Marketing campaignâ under Fashion and Apparel category as well as Multi-Platform Category for the biggest campaign of 2023, âMake Every walk a Ramp walkâ at the Economic Times Trendies awards.
The marketing efforts undertaken during the year under review expanded Bata India''s reach and resonance among its target demographics, creating deeper connections with consumers. The innovative campaigns showcased your Company''s ability to stay attuned to contemporary trends, effectively positioning the brand as leader in style and comfort in the footwear industry.
During the year under review, to strengthen its portfolio of fashion footwear and accessories, your Company entered into a licensing and manufacturing deal for the world-renowned lifestyle brand Nine West. Under the licensing agreement, your Company has the rights to manufacture, market and distribute Nine West footwear and accessories across India. The extensive store network and diverse consumer base of your Company provides an important step
in catering to the demands of consumers seeking trend-right fashion.
Comfit continued to produce detail-driven designs with pastel shades, soft volume and minimal uppers. It generated seasonal newness in longevity-focused key technologies like Comfit Cushion and Active Walk collection. âNaturfitâ anatomic, which contours the shape of foot and provide unmatched comfort with arch support was launched.
Newness remained the key for this category. Refreshed with statement trims, fresh color palette, fashion-driven details on upper, surface enhance techniques like embossing led a splendid upward trajectory throughout the year. Chunkier soles, squared toe shape contributed in making the Brand look more versatile.
Injected newness in terms of trendy silhouettes, prints and toe shapes. New wave of ultra-elevated looks with surface textures, heel shapes and trims emerged which committed to offer freshness. It was ensured that range plans were reflective of changing consumer demands and created versatile products. Ceremonial range included curated selection of jeweled heels, embroidered uppers highlighting Glitz and Glam vouge. Modish last shapes, lightweight shoe and flexibility features foregrounded men''s collection.
Hush Puppies stands for comfort and as part of product expansion strategy, your Company will continue to innovate technology. Product technologies like Bounce, Bounce Plus, Weather Smart, The Body Shoe, ZeroG, Wave Reflex and Deep Comfort offer the right blend of sustainable technology and comfort to the consumers.
Consumers have evolved and following macro, industry, color and material trends, key focus of your Company is on casualization. However, the hold on dress comfort remains strong as always. To meet the aspirational lifestyle needs of consumers, the Brand has also introduced the premium footwear range which has become the unmatched epitome of style and comfort.
Your Company continues to implement its portfolio casualisation strategy, which worked well during the year under review. The Sneaker category was led by Power. Your Company also launched its 1st Power EBO in Noida and plans to open another 5 EBOs shortly.
Your Company also launched Power apparel in India. The collection features breakthrough technology that helps regulate body temperature during workouts. During the year ended March 31, 2024, the collection was expanded to 70 stores and your Company plans to expand the same to 100 stores in near future.
Under Floatz, your Company will continue to offer colourful, lightweight and all-day comfort products. Floatz will focus on enhancing offering by adding more designs and trendy styles like Floatz 3.0 and 3.1 collection to increase newness across gender offerings. During the quarter ended March 31, 2024, Floatz achieved highest-ever quarterly turnover, enhanced by 11 Kiosk.
Digital Multi-Channel Business
Your Company has one of the largest Omni-network in India covering over 1700 stores. The Omni-channel of your Company recorded a handsome share of the total sales.
E-commerce business continued its steady growth path during the year under review. Both bata.com and marketplace channels grew significantly over last year.
Bata.com continues to improve the merchandise assortment display leading to higher ASPs and margin improvements.
In addition, Home Delivery Services now have been extended to all Franchisee stores. This has opened up the complete product catalogue to the Franchisee customers and is leading to incremental business for Franchisee partners. Home Delivery continues to contribute over 1 million pairs of sales in a year.
Investment in technology integrations improved customer experience on Bata.com, Returns and Refunds and also led to significant reduction in customer complaints.
Your Company''s non-retail business division comprises of Multi-Brand Outlets, Key Accounts, industrial and institutional business divisions and exports. With the change in consumer behavior as well as Trade Dynamics, we have made changes to provide better service to our Trade Partners and Consumers. We continue to focus on select categories like School, Sandak, Value Added Men''s and Ladies open, Evalite and Men''s closed where we have advantages and also on casualisation through Sneakers.
Overall health of the business has improved inspite of sluggish market and your Company is gaining market share.
Bata availability in MBO is now in 1500 towns and 700 enterprises provide Bata shoes to their Employee/Customers through our B2B Division.
Considering the soft landing of demand in the distribution market, since last few quarters, your Company has strategically increased its focus on larger distributors to drive business. This further allows your Company to focus on the market in a closer cohort. This is reflected in the improvement in Weighted Distribution which has grown to over 45%.
During the year under review, your Company has invested in technological advancements and the process restructuring to deliver unrivalled consumer experiences. The latest 360° CRM integration with multiple platforms (Transaction Data, ORM tool, IVR, Email, Chatbot & POS) enables your Company, to track customer journey and manage their requests & complaints swiftly and seamlessly. These developments are resulting in faster resolution and reduction in the overall escalations.
As a core area of focus, your Company further enhanced consumer experience in the stores by facelifting various stores across the country. Your Company also implemented various industry first and cutting-edge initiatives such as the AI enabled Bata VM-AI app (Bata Hub), Brand stories in stores to promote brand awareness, etc.
Bata E-Pay platform and the Buy-Now-Pay-Later platform helped your Company to provide seamless digital payment options to its customers.
Segment wise or product wise performance
Your Company operates in Footwear & Accessories Segment only. Operational highlights & performances of major business categories, channels and key brands of your Company for the financial year ended March 31, 2024 are covered previously in this Report.
The Indian footwear industry has displayed resilience after the pandemic-led shocks and since then, has been exhibiting healthy revival. The industry growth is expected to be driven by higher disposable income across geographies and segments, aspiration for branded and comfortable footwear and the constantly changing fashion trends & consumer preferences.
However, factors like domestic inflation, rising rentals in commercial real estate market, enhanced volatility in global financial systems, escalation of geo-political stress, etc., may challenge India''s footwear market growth.
India''s e-commerce market is projected to grow at 18% annually through 2025. However, e-commerce return rates are much higher in Fashion & Apparel categories, posing a threat to online sales profitability.
Brick-and-mortar store formats continue to be in demand witnessing high occupancy rates. Industry experts expect another 8 Million sq. ft. of malls will become operational across the country in the current year, as top retailers look to expand their store count, largely driven by consumption-led growth in India.
Accordingly, your Company is expanding its physical footprint, majorly through Franchise route in Tier 3 -
5 cities and its digital footprint through its own website and marketplaces. Your Company is building style & fashion forward imagery through influencers, media revamp and store innovations.
To cater to the constantly changing fashion trends
6 consumer preferences, your Company is pivoting the Brand on style, modernity and youthfulness with high levels of portfolio freshness.
Your Company is strategically positioned to harness the present challenges, given the strength of its Brand, innovation capabilities, retail foothold and growing online presence in footwear and accessories
category. Your Company continues to focus on efficiency and productivity backed by digital transformation for future readiness with cautious optimism.
Risks and Concerns and Contingent Liabilities
Your Company acknowledges the footwear industry is undergoing transformation. Customer needs & expectations from footwear industry, purchasing channels and buying habits have evolved. New expectations around customer experience / product discoverability are influencing business growth drivers and key initiatives. Your Company acknowledges the fact that competition from both domestic and international players, especially at the bottom of the pyramid, is increasing with every passing day.
Your Company acknowledges that continuous evolution of the product portfolio mix is required to maintain relevance of Bata Brand amongst Millennials and the Gen Z. Your Company also realises that modernisation of I.T. systems alongwith having suitable protection from risk of loss / theft of data / other vulnerabilities is a key requirement for business continuity and continuous customer service. Your Company continuously adapts to comply with relevant changes in the Government laws and policies to minimise any adverse impact on sales, cost and operations. Your Company also monitors external factors such as raw material prices, inflation and other geo-political factors to assess and mitigate any adverse effect on business and results of operations.
Your Company monitors its major risks and concerns at regular intervals. Appropriate steps are taken in consultation with all concerned including the RCM Committee and the Audit Committee of the Board to identify and mitigate such risks.
During the normal course of its business operations, your Company has been subjected to litigations in connection with or incidental thereto. These litigations include civil cases, excise and customs related cases, etc., filed by and against the Company. These cases are being pursued with due importance
and in consultation with legal experts in respective areas. Your Board believes that the outcome of these cases is unlikely to cause a materially adverse effect on the Company''s profitability or business performance. Your Company has a Contingent Liability of Rs. 313.32 Million as on March 31, 2024 as compared to Rs. 390.56 Million as on March 31, 2023. Attention is drawn to the explanations mentioned in Note No. 29 of the Notes to Financial Statements for the financial year ended March 31, 2024. In view of the present status and based on legal advice obtained from time to time, your Board is of the opinion that no provision is required to be made against these Contingent Liabilities.
Internal control systems and their adequacy
A separate paragraph on internal control systems and their adequacy has been provided elsewhere in the Board''s Report.
Discussion on financial performance
The Earnings per Share (EPS - Basic and Diluted) of your Company for the financial year ended March 31, 2024 was at Rs. 20.22 as compared to the (EPS -Basic and Diluted) for the previous financial year ended March 31, 2023 at Rs. 24.83. Your Company recorded an EBITDA margin of 22.52% during the financial year under review as compared to 22.91% during the financial year 2022-23.
Your Company does not have any Bank Borrowings and the entire capital expenditure has been funded through internal sources.
The Capital Expenditure incurred during the year under review amounted to Rs. 1,188.57 Million as compared to Rs. 957.85 Million in the previous year.
Details of significant changes in key financial ratios alongwith explanation
In compliance with the requirement of the Listing Regulations, the key financial ratios of the Company alongwith explanation for significant changes (i.e., for change of 25% or more as compared to the immediately previous financial year), has been provided hereunder:
|
Sl. No. |
Particulars |
2023-24 |
2022-23 |
|
(i) |
Debtors to Sales (in days) |
9 |
8 |
|
(ii) |
Inventory to Turnover Ratio (in times) |
1.63 |
1.71 |
|
(iii) |
Interest Coverage Ratio* |
4.3 |
4.6 |
|
(iv) |
Current ratio |
2.10 |
1.95 |
|
(v) |
Debt Equity Ratio** |
0.89 |
0.87 |
|
(vi) |
Operating Profit Margin (%) |
14.7 |
14.37 |
|
(vii) |
Net Profit Margin (%) |
7.5 |
9.2 |
|
(viii) |
Return on Net worth (%) |
17.1 |
22.3 |
*There is no borrowing in the Company. However, Finance cost includes interest expenses accounted for various deposits in accordance with Ind AS 109, Financial Instruments and interest expense accounted on various lease contracts in accordance with Ind AS 116.
**Leases has been considered as debts.
There have been no significant changes over previous year across all ratios. For further explanation, please refer to Note no. 41 of the Notes to Standalone Financial Statements for the year ended March 31, 2024.
The other financial ratios of the Company relating to previous 10 years has been provided in other part of this Annual Report.
Material developments in the human resource / industrial relations front, including number of people employed
Your Company has been continuously working to advance human resources skills, competencies and capabilities within the organisation, which are critical to achieve desired results in line with the strategic business ambitions. Some key initiatives that have been taken in this direction during the year under review are summarised below:
⢠Negotiations of Long-Term Agreement (LTA) for settlements of demands with the Worker''s Union at the manufacturing unit of the Company at Batashatak at Hosur, Tamil Nadu.
⢠Successful implementation of a Voluntary Retirement Scheme (VRS) at the manufacturing unit of the Company at Southcan, Bengaluru, Karnataka.
⢠Industrial relations at all the manufacturing units of your Company have been harmonious and peaceful with active involvement of the employees in the collective bargaining process. Your Company has also encouraged wholehearted participation of the employees and union in improving productivity as well as quality of its products.
⢠Enhancing Employee Experience: Employee focused approach to ensure seamless hire to
retire journey with engagement and growth orientation. Through digitisation and process simplification, your Company is dedicated to enriching the hire to retire journey for employees, ensuring a seamless and rewarding experience at every stage of their employment.
⢠Introduction of AI-enabled tools for employee pulse checks: Your Company has embraced technology to better understand employee sentiments and engagement levels. Through the implementation of AI tools, your Company now regularly gauges employee pulse at intervals, and proactively addresses concerns and maintains a positive work environment.
⢠Focus on team development and training: Your Company prioritized and invests in creating conducive environments for team development and training. The Bata Training Academy was revitalized with an approach to prioritize field training of our large and distributed workforce. The aim of training is towards improving customer centricity and overall experience in our retail stores, distribution business and to increase skills in our manufacturing plants. Your Company also focuses to provide cutting edge intellectual skill enhancements through digitally enabled training courses.
⢠Internal Growth initiatives: Your Company believes and promotes internal growth of
employees and therefore focuses on providing opportunity to employees by Internal job postings and movements. This enables our employees with ample opportunities for learning, performance and growth within the organisation. Programs like STEP UP Express, STEP UP & UDAAN continued to support store teams, with Assessment Centers evaluating Bata Competencies.
⢠Personal and professional growth initiatives:
Various initiatives such as Bata eUniversity and the gamified eLMS for retail teams were introduced to facilitate personal and professional growth among employees.
⢠Diversity & Inclusion efforts: Diversity & Inclusion remained a key focus, with your Company actively working towards building a more diverse workforce. Recognitions as the Best Workplace for Women by ET and ASSOCHAM, along with acknowledgment of our DEI commitment by Retail Association of India, underscore our dedication to inclusivity.
⢠Commitment to a safe workplace: Your Company reaffirmed its commitment to providing a safe work environment, free from harassment, particularly zero tolerance for sexual harassment. Awareness sessions on the Prevention of Sexual Harassment at Workplace (POSH) were conducted across Bata India offices.
In conclusion, your Company''s unwavering dedication to employee well-being, growth and inclusivity, coupled with the integration of advanced technologies, has positioned us for continued success. By fostering a culture of continuous improvement and innovation, we remain committed to creating a workplace where every employee thrives and contributes to our collective success.
As on March 31, 2024, there were 4073 permanent employees on the rolls of your Company.CAUTIONARY STATEMENT
There are certain statements which have been made in the Management Discussion and Analysis Report describing the estimates, expectations or predictions, may be read as ''forward-looking statements'' within the meaning of applicable laws and regulations. The actual results may differ materially from those expressed or implied. The important factors that would make a difference to your Company''s operations include demand-supply conditions, raw material prices, changes in Government Policies, Governing Laws, Tax regimes, Global Economic Developments and other factors such as litigation and labour negotiations.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT(BRSR)
In compliance with Regulation 34(2)(f) of the Listing Regulations, your Company is pleased to publish its 2nd Business Responsibility and Sustainability Report (BRSR) for the financial year 2023-24, in a fair and transparent manner, covering the essential indicators that are required to be reported on a mandatory basis in the prescribed format. The Report is aligned with your Company''s approach towards sustainable, inclusive and resilient development, which is annexed to the Board''s Report and marked as Annexure - IX. The BRSR has been uploaded on the website of the Company at www.bata.in and is available at the link https://www.bata.in/bataindia/a-29_s-181_c-42/ investor-relations.html
Annexures forming part of this Report
The Annexures referred to in this Report and other information which are required to be disclosed are annexed herewith and form part of this Report:
|
Annexure |
Particulars |
|
I Secretarial Audit Report |
|
|
II |
Corporate Governance Report |
|
III |
Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo |
|
IV & V |
Annual Report on CSR activities and CSR Policy (Salient features) |
|
VI |
Nomination and Remuneration Policy |
|
VII & VIII |
Disclosures on remuneration of directors and employees of the Company |
|
IX |
Business Responsibility and Sustainability Report |
Considering the provisions of Section 136 of the Act, this Annual Report, excluding the information on remuneration of employees in terms of Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended), is being sent to the members of the Company and others entitled thereto. The said information would be available for inspection, by members, at the Registered Office of the Company or through electronic mode, during business hours on working days upto the date of the 91st AGM of the Company. Any member interested in obtaining a copy thereof may write in this regard to the Company Secretary of the Company.
ACKNOWLEDGEMENT AND APPRECIATION
Your Board is grateful for the continuous patronage of our valued customers and remains committed to serving them by delivering more style and comfort at every step.
Your Board acknowledges and appreciates the support rendered by all our business partners, suppliers, vendors, associates and dealers as well as
the regulatory authorities of the Central and State Governments in India. Your Board looks forward to their continued assistance in future.
Your Board is deeply grateful to our investors and shareholders for the unwavering confidence and faith in us. Your Board is also thankful to the Bata Shoe Organization (BSO) for their guidance and support throughout the year.
Your Board also takes this opportunity to thank the communities your Company operates in, who have reposed their trust in us.
Your Board appreciates and values the efforts and commitment by employees, workmen and staff including the Management headed by the Executive Directors who have all worked together as a team in achieving a commendable business performance despite a challenging business environment. Your Board wishes to place on record its deep appreciation of the Independent Directors and the Non-Executive Directors of the Company for their valuable contribution by way of strategic guidance which helps your Company to take the right decisions in progressing towards its business goals.
For and on behalf of the Board of DirectorsGunjan Dineshkumar Shah Anil Ramesh Somani
Place : Gurugram Managing Director and CEO Director Finance and CFO
Date : May 29, 2024 DIN: 08525366 DIN: 10119789
Mar 31, 2023
Your Directors are pleased to present the 90th Annual Report covering the operational and financial performance of your Company along with the Audited Financial Statements for the financial year ended March 31, 2023.
FINANCIAL HIGHLIGHTS & PERFORMANCE
|
(Rs. in Million) |
||
|
Particulars |
Financial Year ended on March 31, 2023 |
Financial Year ended on March 31, 2022 |
|
(Audited) |
(Audited) |
|
|
Revenue from operations |
34,515.68 |
23,877.19 |
|
Other Income |
373.51 |
558.97 |
|
Total |
34,889.19 |
24,436.16 |
|
Profit / (Loss) before Taxation |
4,256.30 |
1,368.27 |
|
Provision for Taxation |
1,065.13 |
359.40 |
|
Net Profit / (Loss) |
3,191.17 |
1,008.87 |
|
Other Comprehensive Income / (Loss) (net of tax) |
10.29 |
(4.35) |
|
Total Comprehensive Income |
3,201.46 |
1,004.52 |
Your Company has prepared the Financial Statements for the financial year ended March 31, 2023, in terms of Sections 129, 133 and other applicable provisions, if any, of Companies Act, 2013 (as amended) (the âActâ) and Schedule III thereto read with the Rules framed thereunder.
During the financial year ended March 31, 2023, your Company achieved a turnover of Rs. 34,515.68 Million as compared to the turnover of Rs. 23,877.19 Million recorded during the previous financial year ended March 31, 2022, registering a growth of 44.56%. Your Company posted a Net Profit of Rs 3,191.17 Million for the financial year ended March 31, 2023, as against the Net Profit of Rs. 1,008.87 Million for the financial year ended March 31, 2022. The Net Profit for the financial year ended March 31, 2023, reflects a growth of 216.31% over the corresponding profit for the financial year ended March 31, 2022.
On a consolidated basis, your Company reports a turnover of Rs. 34,515.68 Million during the financial year ended March 31, 2023 and a consolidated Net Profit of Rs. 3230.04 Million for the said financial year.
Your Company continued to be India''s leading footwear brand by maintaining its focus on -Evolution, Expansion and Efficiency.
During the first half of the year under review, your Company witnessed pent-up demand, followed by demand for office wear as an increasing number of employers announced return-to-office for their
workforce and physical re-opening of educational institutions across the Country. This demand translated into highest-ever quarterly sales in the first quarter for your Company with significant momentum across all sales channels.
Your Company continued to witness green shoots for the rest of the year on several occasions such as festive seasons, wedding seasons, etc. Your Company also witnessed significant uptick in demand for fashionable, trendy yet functional and comfortable footwear. There was a distinct shift in consumer mindset including brand consciousness and accordingly, your Company maintained its focus on evolution of its product portfolio with the strategy of casualisation and offered premium fashionable products. This reflected in overall ASP growth on a yearly basis and expansion in share of the premium category brands like Hush Puppies, Marie Claire and Red Label. Your Company also saw encouraging demand for its comfort and casual wear ranges of Bata Comfit, Floatz, etc.
Your Company continues to optimise its retail network, renovate stores to premiumise customer experience and accelerate expansion through Franchise and Distribution networks. The year under review marks highest ever expansion in Franchise stores with total footprint crossing the 2000 milestone for the first time. Distribution channel was scaled up to 1150 towns.
Continuous investments behind marketing campaigns throughout the year under review, helped strengthening of the already solid brand recall. Your Company launched ''It''s Got To Be Bata'' & ''Neo Casuals for Neo Leaders'' campaigns which elevated connect with customers.
With the advent of smart phones and ease of access to e-commerce websites, fast fashion has reached Tier 2 - 4 cities. Your Company expanded its digital footprint through its own website (www.bata.in) and major marketplaces. It has a robust e-commerce network that delivers to over 27,000 Pin codes across the Country. Your Company continues to offer home delivery through its Omni-channel from all Company-operated stores, thereby, increasing its Pan-India footprint. During the year under review, home delivery services were extended to select Franchise Stores on pilot basis. This would open up complete product catalogue to a Franchisee customer as well. Home deliveries contributed to around 1 Million pairs for the year under review.
The Distribution Business and B2B Business of your Company continued to exhibit promising growth with repeat orders and new customers. Bata Products are now available in 30,000 MBOs in 1200 towns.
Your Company stepped-up its infrastructure to enhance productivity and efficiencies in value chain. Sourcing strategies of L2L, import substitution, etc., to support Speed-to-Market contributed significantly to lead time reduction as well as in improving margins across Retail and I&D businesses.
Your Company continues to invest in I.T. (ERP, Merchandising, Warehouse Management System, etc.) to enhance productivity and support efficient future growth. ERP and High Performance Merchandising were two large projects undertaken during the year under review. Once deployed, HPM would assist in Merchandising for different cohorts and automate the entire process upto replenishment of stores.
As a responsible corporate citizen and a trusted Brand, your Company is committed towards its social responsibilities through various initiatives, details of which are covered subsequently in this Report.
The Authorised Share Capital of your Company as on March 31, 2023, stood at Rs. 700 Million divided into 140,000,000 equity shares of Rs. 5/- each. The Issued Share Capital of your Company is Rs. 642.85 Million divided into 128,570,000 equity shares of
Rs. 5/- each and the Subscribed and Paid-up Share Capital is Rs. 642.64 Million divided into 128,527,540 equity shares of Rs. 5/- each, fully paid-up.
The Board, at its meeting held on May 18, 2023, reviewed and amended the Dividend Distribution Policy to include a provision that subject to the general considerations and other parameters / conditions as mentioned in the Policy and further subject to adequate Retained Earnings to meet requirements of capital expenditure, including for distribution, supply chain, technology and strategic initiatives and working capital, your Board shall endeavour to pay / recommend a dividend having pay-out of upto 60% of Profit After Tax for that year. This provision is effective for dividend for the financial year 2022-23 and onwards.
The amended Dividend Distribution Policy has been uploaded on the website of the Company at www.bata.in under the tab âInvestor Relations> Company Policiesâ at https://www.bata.in/ company-policies.html and is available at the link https://www.bata.in/on/demandware. static/-/Sites-bata-in-Library/default/ veadaf24d0adb1bcaa378b1c1293c96d71a988b9e/ pdf/CP 1905-Dividend-Revised 2023.pdf
In line with the amended Dividend Distribution Policy of your Company, your Board recommends a Dividend of Rs. 13.50 (270%) per equity share of Rs. 5/- each, fully paid-up of your Company, for the financial year ended March 31, 2023. The dividend, if declared, by the Members at the forthcoming Annual General Meeting (AGM) shall be paid to the eligible Members of the Company from Thursday, August 24, 2023 onwards. The total payout of aforesaid dividend would be approximately Rs. 1,735.12 Million. Pursuant to the Finance Act, 2020 read with the Income-tax Act, 1961, the dividend paid or distributed by a company shall be taxable in the hands of the shareholders w.e.f. April 1, 2020. Accordingly, in compliance with the said provisions, your Company shall make the payment of dividend after necessary deduction of tax at source at the prescribed rates. For the prescribed rates for various categories, the shareholders are requested to refer to the Finance Act, 2020 and amendments thereof.
Your Company has not transferred any amount to the General Reserve during the financial year ended March 31, 2023.
Financial Statements for the financial year ended March 31, 2023.
Investor Education and Protection Fund (IEPF)
In compliance with Sections 124 and 125 of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (âIEPF Rulesâ) as amended from time to time, a sum of Rs. 19,75,708/- has been deposited into the specified bank account of the IEPF, Government of India, towards unclaimed / unpaid dividend amount for the 15 (fifteen) month period ended March 31, 2015.
As per the IEPF Rules, the corresponding equity shares in respect of which Dividend remains unclaimed / unpaid for seven consecutive years or more, are required to be transferred to the Demat Account of the IEPF Authority. During the year under review, your Company has transferred 17,090 underlying Equity Shares to the Demat Account of the IEPF Authority, in compliance with the aforesaid Rules.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN END OF THE FINANCIAL YEAR AND THE DATE OF THIS REPORT
Except those disclosed in this Annual Report, there are no material changes and commitments affecting the financial position of your Company between the end of the financial year i.e., March 31, 2023 and the date of this Report.
SUBSIDIARIES
During the year under review, no company became or ceased to be a subsidiary, joint venture or associate of your Company. As on the date of this Report, your Company has two wholly owned subsidiaries viz., Bata Properties Limited and Way Finders Brands Limited (WFBL).
During the year under review, the Objects Clause of the Memorandum of Association of WFBL was amended to enable it to, inter alia, undertake business as manufacturers and suppliers of boots and shoes.
The Annual Reports of these Subsidiaries will be made available for inspection by any Member of the Company at the Registered Office of your Company at 27B, Camac Street, 1st Floor, Kolkata - 700016, West Bengal, between 11:00 A.M. and 1:00 P.M. on any working day upto the date of ensuing AGM. The Annual Reports of the aforesaid Subsidiaries
Your Company has no unclaimed / unpaid matured deposit or interest due thereon since December 31, 2013. Your Company has not accepted any deposits covered under ''Chapter V - Acceptance of Deposits by Companies'' under the Act during the financial year ended March 31, 2023.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
In terms of Section 186 of the Act and Rules framed thereunder, details of the Loans given and Investments made by your Company have been disclosed in Note No. 5 of the Notes to Financial Statements for the financial year ended March 31, 2023, which forms part of this Annual Report. Your Company has not given any guarantee or provided any security during the year under review. The disclosure as per Rule 8(5)(xii) of the Companies (Accounts) Rules, 2014, as amended, is not applicable to your Company.
During the financial year ended March 31, 2023, all transactions with the Related Parties as defined under the Act read with Rules framed thereunder, were in the ordinary course of business and at arm''s length basis. Your Company does not have a ''Material Subsidiary'' as defined under Regulation 16(1)(c) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended) (the âListing Regulationsâ).
During the year under review, your Company did not enter into any Related Party Transaction which requires prior approval of the Members of your Company. All Related Party Transactions entered into by your Company had prior approval of the Audit Committee and the Board of Directors, as required under the Listing Regulations. Subsequently, the Audit Committee and the Board have also reviewed the Related Party Transactions on a quarterly basis. During the year under review, there have been no materially significant Related Party Transactions having potential conflict with the interest of your Company.
Since all Related Party Transactions entered into by your Company were in the ordinary course of business and also on an arm''s length basis, therefore, details required to be provided in the prescribed Form AOC - 2 are not applicable to your Company. Necessary disclosures required under the Ind AS 24 have been made in Note No. 33 of the Notes to the for the financial year ended March 31, 2023, shall be provided to any Member of your Company upon receipt of written request. Members may also send an advance request at the e-mail id - share. dept@bata.com for an electronic inspection of the aforesaid documents.
The Annual Reports along with the Audited Financial Statements of each of the Subsidiaries of your Company are also available on the website of your Company at www.bata.in
Pursuant to Section 129(3) of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014 (as amended), a statement containing the salient features of Financial Statements of the aforesaid Subsidiaries (including highlights of their performance and contributions to the overall performance of the Company) has been provided in Form AOC-1 which forms part of this Annual Report.
The Audited Consolidated Financial Statements (CFS) of your Company for the financial year ended March 31, 2023, prepared in compliance with Ind AS issued by the Institute of Chartered Accountants of India (ICAI) and notified by the Ministry of Corporate Affairs (MCA), Government of India also form part of this Annual Report.
Details of the Subsidiaries are given in the Annual Return in Form No. MGT - 7 as on March 31, 2023. The Annual Return referred to in Section 92(3) of the Act is available on the website of your Company at www. bata.in under the tab âInvestor Relations > Annual Reportsâ under the link https://www.bata.in/annual-reports.html
AUDIT AND AUDITORSStatutory Auditors
In terms of Section 139 of the Act read with the Companies (Audit and Auditors) Rules, 2014 (as amended), M/s. Price Waterhouse Chartered Accountants LLP (âPwCAâ) (ICAI Firm Registration No. 012754N/N500016), Chartered Accountants was appointed as the Auditors of your Company for a consecutive period of 5 (five) years from the conclusion of the 89th AGM held in the year 2022 until conclusion of the 94th AGM of your Company.
PwCA has not informed the Company regarding any condition rendering them ineligible to continue as the Auditors of the Company in terms of the provisions of the Act and the Rules framed thereunder. A copy of the certificate issued by the Peer Review Board (ICAI) as required under Regulation 33 of the Listing
Regulations has been submitted by PwCA to the Company.
The reports given by the Auditors on the Standalone and Consolidated Financial Statements of your Company for the financial year ended March 31, 2023, form part of this Annual Report and there is no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Reports. The Auditors of your Company have not reported any fraud in terms of the second proviso to Section 143(12) of the Act.
In terms of Section 204 of the Act, read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended), your Board at its meeting held on November 10, 2022 appointed M/s. Chandrasekaran Associates, (FRN: P1988DE002500), Company Secretaries, 11-F, Pocket - IV, Mayur Vihar Phase - I, Delhi - 110091, as the Secretarial Auditors of your Company, to conduct the Secretarial Audit for the financial year ended March 31, 2023 and to submit Secretarial Audit Report thereon.
The Secretarial Audit Report as received from M/s. Chandrasekaran Associates in the prescribed Form No. MR - 3 is annexed to this Board''s Report and marked as Annexure - I and does not contain any qualification, reservation, adverse remark or disclaimer.
In compliance with Regulation 34 of the Listing Regulations read with Schedule V thereto, the Corporate Governance Report of your Company for the financial year ended March 31, 2023 is annexed as Annexure - II and forms part of this Annual Report. The details of Credit Rating are given in the said report.
Other disclosures required to be made under the Listing Regulations, the Act and the Rules made thereunder, have been included in the Corporate Governance Report and / or the Financial Statements for the financial year ended March 31, 2023 to avoid repetition in this Board''s Report.
SIGNIFICANT AND MATERIAL LITIGATIONS / ORDERS
During the year under review, there were no significant material orders passed by the Regulators / Courts and no litigation was outstanding as on March 31,
2023, which would impact the going concern status and future operations of your Company. The details of litigation on tax matters are disclosed in the Auditor''s Report and Financial Statements which form part of this Annual Report. During the year under review, no Corporate Insolvency Resolution application was made or proceeding was initiated, by / against Bata India Limited under the provisions of the Insolvency and Bankruptcy Code, 2016 (as amended). Further, no application / proceeding by / against Bata India Limited under the provisions of the Insolvency and Bankruptcy Code, 2016 (as amended) is pending as on March 31, 2023.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
In compliance with Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 (as amended), a statement containing information on conservation of energy, technology absorption, foreign exchange earnings and outgo of your Company, in the prescribed format, is annexed to this Board''s Report and marked as Annexure - III.
Your Company has an elaborate system-driven compliance programme in place, inter alia, for thorough pre-review of the on-boarding procedure in case of a new manufacturing partner in-sourcing and also for an associate manufacturer for its own factories. This includes clearance of documents and a detailed compliance audit prior to approval. With respect to Social & Environmental Responsibility (SER) audits of its value chain sourcing partners, 58 audits were performed in 2022, resulting in a total average score of 88.6%. The factories have been audited by third party auditors and vendors are audited by Bata''s internal auditors to check their level of compliance.
Your Company has engaged âLexplosionâ for providing support on the statutory and progressive compliances. The software provides real-time data visibility and a compliance dashboard. Benchmarks have been achieved for factory in the fields of Quality Management Systems (ISO 9001:2015) & Environment Management Systems (ISO 14001:2015). In August 2022, the largest manufacturing plant of your Company received ISO 45001:2018 certification on Occupational Health & Safety.
Your Company was recognised in June 2022 by Winner Award (under Large Industry Category)
under the ZED stream (Zero defect in Manufacturing & Zero Effect on Environment), in the CII National ZED Competition and subsequently in November 2022, in the fields of Environment, Cost Savings, and quality. Our Products meet the optimal Quality Specifications and the systematic approach towards Zero Defect by implementation of DMAIC process for continuous improvement and sustainable development.
To remain competitive, your Company continues to focus on innovation. âLife Naturalâ antimicrobial material is offered for School shoes (Tennis, Naughty Boy, Scout Ballerina and Hawaii Flip-Flop).
Under Sustainable initiatives, your Company converted the fuel from HSD to gas for Thermopack, thereby, potentially reducing CO2 and SO2 emissions. Your Company also implemented 3R (PVC, Rubber & EVA, Laminated Textile waste, along with reduction initiatives like LED, Motion Sensors, efficient air compressors, VFD/Servo motors, Turbo ventilators, integrated APFC electrical panels) initiative of âReduce, Reuse & Recycleâ program. Additionally, your Company also have set-up Zero Discharge facilities, Sewage Treatment Plants and Rain-Water Harvesting in various units.
Your Company continued its focus on capability and capacity development of indigenous suppliers to reduce lead time and cost. Sourcing was taken nearer to the demand areas for some products. Sourcing strategies of L2L, import substitution, etc., to support Speed-to-Market, continue to contribute significantly to lead time reduction as well as in improving margins.
RESEARCH AND DEVELOPMENT ACTIVITIES AND ENERGY CONSERVATION
Research and Development activities during the year under review continued to emphasise on creating a pollution-free and a safe work environment. Technological improvement in product development, material development, introduction of new footwear moulds, process improvement, etc., were the key focus areas to improve quality of footwear and productivity in manufacturing. Your Company developed Nail Penetration Resistance Safety Boot as per BIS norms IS 15298-Part 2: 2016.
An expenditure of Rs. 63.72 Million was incurred on Research and Development (including product development initiatives) during the year under review, as against Rs. 40.61 Million during the financial year 2021-22.
Your Company achieved reduction of air pollution and emissions at Batanagar Factory by Briquette Consumption of 794 Ton. Your Company shall continue to invest on Research and Development activities and energy saving measures in its manufacturing units.
Further information on conservation of energy and technology absorption are annexed to this Report and marked as Annexure - III.
CORPORATE SOCIAL RESPONSIBILITY
Your Company operates on the belief that an organisation should exist to serve a social purpose and enhance the lives of people connected through its business. Your Company has a CSR Policy in place which aims to ensure that your Company continues to operate its business in an economically, socially and environmentally sustainable manner, while recognising the interests of all its stakeholders. It takes up CSR programmes which benefit the communities in and around the vicinity of its operational presence, resulting in enhancing the quality of lives of the people in those areas.
Your Company continued to demonstrate its social commitment to the communities in and around which it operates. Our community interventions have been aligned with global Sustainable Development Goals (SDGs), primarily on good health & wellbeing, quality education, reducing inequalities and leveraging partnerships for success.
Details of composition of CSR Committee and other relevant details have been provided in the Corporate Governance Report.
A sum of Rs. 25,954,243 (inclusive of amount required to be set-off and excess amount spent for the financial year ended on March 31, 2023) was spent on various CSR initiatives (covered hereinafter in this Report) for the financial year ended on March 31, 2023. The unspent amount of Rs. 96,22,393 is towards certain ongoing projects and has been transferred to Unspent CSR Account as per Section 135(6) of the Act. The Annual Report on CSR activities, containing details of CSR expenditure, details of excess amount spent, etc., is appended as Annexure - IV to this Report.
The salient features of the CSR Policy of your Company is appended as Annexure - V to this Report and the complete policy has been uploaded on the website of your Company at www.bata.in under the tab âInvestor Relations >
Company Policiesâ at https://www.bata.in/on/ demandware.static/-/Sites-bata-in-Library/default/ vca1a6dc6c6c9dd1e1b2bd451ba8726ee06c054d7/ Staticpagesimages/Company%20Policies/CSR-Policy-Bata-India-Ltd-2021.pdf
There has been no change in the CSR Policy during the year under review.
Promoting EducationBata Childrenâs Program
Your Company continued to support children under our Global Bata Children''s Programme (BCP), wherein we reached out to 4,000 children and actively drove back to the school program. BCP Program focused on their academics, STEM Learning, Foundational Literacy & Numeracy, sports, mental health & wellbeing and conducting counseling sessions. We addressed the basic needs of the children by building classrooms, setting up a dining space, etc., to provide a cordial environment for studies.
During the year under review, your Company also focused on Foundational Literacy and Numeracy among primary school children to impart grade level efficiency across the state of Haryana. Your Company is ensuring effective implementation of Nipun Haryana Mission through the state level partnered agency as a multi-year project.
Our Stride with Pride program was revamped wherein sustainability was given a focus while serving the needs of the underserved. It also focused on the importance of foot care and means to ensure it; around 2000 beneficiaries were sensitised.
Environment Sustainability Projects
Understanding the importance of environment conservation, Bata took up environment sustainability projects - Solar Powering of 2 schools and setting up Rain Water Harvesting Structure in 3 schools. This multi-year project is projected to reduce, upon implementation, around 700 tonnes of Carbon Emission which is equivalent to planting around 1100 trees in the next 25 years.
Bata implemented one of the most needed programs on Menstrual Hygiene & Awareness wherein your Company addressed the availability of Sanitary Facilities, awareness about myths related to Menstrual Health and the importance of nutrition
for good health & well-being. The program focused on the eco-system by sensitising adolescent girls, boys, teachers, parents and school management committees.
Bata Heroes - Employee Volunteering
While addressing the needs of the community through CSR initiatives, your Company also encourages its employees to participate in the cause through employee volunteering. It is a core objective to make employee volunteering a self-driven culture of the organisation. Thus, in a planned manner, your Company curated activities for employees to contribute, such as organising / conducting activities / sessions on remarkable days like World Health Day, Earth Day, Children''s Day, Christmas, etc. Bata employees also participated in the winter donation drive and supported other charities for a cause.
Your Company made significant strides to harness all its resources towards successful execution of the CSR projects across all locations.
SUPPORT FROM BATA SHOE ORGANIZATION
Your Company continues to receive support from the Holding Company - Bata (BN) B.V., Amsterdam, The Netherlands and also from Bata Shoe Organization (BSO). Your Company also enjoys the benefits of technical research through Global Footwear Services Pte. Ltd., Singapore (GFS). Your Company has renewed the Technical Collaboration Agreement with GFS with effect from January 1, 2021 for a period of ten years. In terms of the said Agreement, your Company receives guidance, training of personnel and services from GFS in connection
with research & development, marketing, brand development, footwear technology, testing & quality control, store location, layout & design, environment, health & safety, risk & insurance management, etc. Your Company continues to obtain expertise and experience from the personnel of GFS and other BSO group companies to improve its product range and operational processes throughout the year. In terms of the said Agreement, your Company has paid technical services fee of Rs. 387.97 Million to GFS for the financial year ended March 31, 2023, which is around 1% of the Turnover of your Company.
BOARD OF DIRECTORS, BOARD MEETINGS AND KEY MANAGERIAL PERSONNELComposition
Your Company''s Board is duly constituted and is in compliance with the requirements of the Act, the Listing Regulations and provisions of the Articles of Association of your Company. Your Board has been constituted with requisite diversity, wisdom, expertise and experience commensurate to the scale of operations of your Company.
During the year under review, a total of 7 (seven) Meetings of the Board of Directors of your Company were held, i.e., on May 25, 2022, August 11, 2022, September 22, 2022, November 10, 2022, December 12, 2022, January 19, 2023 and February 14, 2023. Details of Board composition and Board Meetings held during the financial year 2022-23 have been provided in the Corporate Governance Report which forms part of this Annual Report.
With effect from the end of business hours on November 11, 2022, Ms. Vidhya Srinivasan (DIN: 06900413), has relinquished her positions as Director Finance and CFO of your Company in order to pursue opportunities outside.
Your Board at its Meeting held on April 25, 2023, approved the following, subject to approval of the Members of your Company through Postal Ballot:
1. Appointment of Mr. Anil Ramesh Somani (DIN: 10119789) as a Whole-time Director, designated as Director Finance and CFO (KMP) of your Company, liable to retire by rotation, for a period of 5 (five) consecutive years commencing from April 25, 2023.
2. Appointment of Mr. Ravindra Dhariwal (DIN: 00003922) as a Non-Executive Non-Independent Director of your Company, liable to retire by rotation, for a period of 2 (two) consecutive years commencing from May 27, 2023.
Your Board has also recommended the reappointment of Mr. Ashok Kumar Barat (DIN: 00492930) as an Independent Director of your Company, for a second term of 5 (five) consecutive years commencing from December 17, 2023.
At the said meeting, your Board has also approved the Postal Ballot process to seek Members'' consent for the above appointment(s) / re-appointment(s). Further details in this regard are given in the Corporate Governance Report annexed hereto and forming part of this Report.
In order to pursue opportunities outside Bata Group, Mr. Alberto Toni (DIN: 08358691) has stepped down as Director in your Company. The same is effective from the close of business hours on May 18, 2023.
The Board places on record its appreciation for the valuable contributions made by the directors during their respective tenure.
Other Information
Other details pertaining to the Directors, their appointment / cessation during the year under review and their remuneration are given in the Corporate Governance Report annexed hereto and forming part of this Report.
Director seeking appointment / re-appointment
Ms. Kanchan Chehal (DIN: 09263584), Non-Executive Non-Independent Director of your Company, is liable to retire by rotation at the ensuing AGM and being
eligible, has offered herself for re-appointment. Your Board recommends her re-appointment as a Director (Non-Executive Non-Independent) of your Company, liable to retire by rotation. Further details alongwith necessary disclosure(s) in respect of Ms. Chehal have been given in the Notice convening the 90th AGM of your Company.
As on the date of this Report, Mr. Gunjan Shah (DIN: 08525366), Managing Director and Chief Executive Officer, Mr. Anil Ramesh Somani (DIN: 10119789), Director Finance and Chief Financial Officer and Mr. Nitin Bagaria (ACS-20228), Company Secretary & Compliance Officer are the Key Managerial Personnel (KMP) of your Company.
Based on the recommendation / approval of the Nomination and Remuneration Committee and the Audit Committee of the Board, Mr. Anil Ramesh Somani was appointed by your Board as the Chief Financial Officer (KMP) of your Company, with effect from April 3, 2023. He was subsequently appointed as a Whole-time Director of your Company, with effect from April 25, 2023.
During the year under review, Ms. Vidhya Srinivasan ceased to be a KMP, details of which are given above.
Declaration by Independent Directors
The Independent Directors of your Company have submitted requisite declarations that they continue to meet the criteria of Independence as laid down in Section 149(6) of the Act and Regulations 16(1)
(b) and 25(8) of the Listing Regulations and there is no change in the status of their Independence and have confirmed that they are not aware of any circumstance or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties.
The Independent Directors of your Company are in compliance with the requirements under Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014 (as amended).
The Board of Directors further confirms that the Independent Directors also meet the criteria of expertise, experience, integrity and proficiency in terms of Rule 8 of the Companies (Accounts) Rules, 2014 (as amended).
Committees of the Board
Pursuant to various requirements under the Act and the Listing Regulations, the Board of Directors
has constituted various committees, such as, Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Risk & Compliance Management Committee and Corporate Social Responsibility Committee. The details of composition, terms of reference, etc., pertaining to these committees are mentioned in the Corporate Governance Report which forms part of this Annual Report.
The Board has constituted a committee, namely, Business Operations Committee to primarily look into day-to-day matters relating to retail stores, banking, etc. The Board has also constituted dedicated committees, namely, Real Estate Committee and Technology Committee. The Real Estate Committee is primarily responsible to review, recommend and assist the Board on all matters and transactions relating to the Real Estate of your Company.
The Technology Committee primarily acts as a counsel and assists on Technology Strategies to the Board. It also conducts periodic appraisal of Technology Projects of your Company.
COMPLIANCE WITH SECRETARIAL STANDARDS
During the year under review, your Company has duly complied with the applicable provisions of the Revised Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) issued by the Institute of Company Secretaries of India (ICSI).
The Board of Directors of your Company has duly constituted an Audit Committee in compliance with the provisions of Section 177 of the Act, the Rules framed thereunder read with Regulation 18 of the Listing Regulations. The recommendations made by the Audit Committee are accepted by your Board.
Name of the Audit Committee members, number of meetings held during the year under review, terms of reference and other requisite details have been provided in the Corporate Governance Report which forms part of this Annual Report.
NOMINATION AND REMUNERATION POLICY
Your Board has adopted a Remuneration Policy for identification, selection and appointment of Directors, Key Managerial Personnel (KMPs) and Senior Management Personnel (SMPs) of your Company. The Policy provides criteria for fixing remuneration of the Directors, KMPs, SMPs as well
as other employees of your Company. The Policy enumerates the powers, roles and responsibilities of the Nomination and Remuneration Committee. There has been no change in the said Policy during the year under review. However, your Board at its Meeting held on April 25, 2023, amended the provisions relating to appointment of directors and their remuneration in the said Policy.
Your Board, on the recommendations of the Nomination and Remuneration Committee, appoints Director(s) of your Company based on his / her eligibility, experience and qualifications and such appointment is approved by the Members of the Company at General Meetings. The Policy also provides for Board Diversity criteria.
The amended Policy (containing the changes made therein) is appended as Annexure - VI and has been uploaded on the website of your Company at www. bata.in under the tab âInvestor Relations > Company Policiesâ at https://www.bata.in/company-policies.html and is available at the link https://www.bata.in/on/ demandware.static/-/Sites-bata-in-Library/default/ v4630e105168980f045e35a4a408a4a6d759e76c0/ pdf/250423-Bata-Nomination-and-Remuneration-Policy%202023.pdf
Your Company conducts a Board Evaluation process for the Board of Directors as a whole, Board Committees and also for the Directors individually through self-assessment and peer assessment. The details of Board Evaluation process for the financial year 2022-23 have been provided in the Corporate Governance Report which forms part of this Annual Report.
DISCLOSURES ON REMUNERATION OF DIRECTORS AND EMPLOYEES OF THE COMPANY
Details as required under Section 197(12) of the Act read with Rules 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended), are annexed to this Board''s Report and marked as Annexures - VII and VIII. Further, the Non-Executive NonIndependent Directors of your Company (who are a part of BSO / Bata Group in any executive capacity) do not accept any sitting fees / commission.
DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to Section 134 of the Act, the Directors, to the best of their knowledge and belief, hereby confirm that:
(a) in the preparation of the annual accounts, the
applicable accounting standards had been followed;
(b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2023 and of the profit of the Company for that period;
(c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) they have prepared the annual accounts on a going concern basis;
(e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
(f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.
WHISTLE BLOWER POLICY / VIGIL MECHANISM
In terms of Section 177 of the Act and Rules framed thereunder read with Regulation 22 of the Listing Regulations, your Company has a Whistle Blower Policy / Vigil Mechanism in place for the Directors and Employees of your Company through which genuine concerns regarding various issues relating to inappropriate functioning of the organisation can be raised. A Vigil Mechanism Committee under the Chairmanship of the Audit Committee Chairman is also in place. Any concern relating to impact on human rights or issues caused by the business shall also be addressed by the said committee. The Whistle Blower Policy has been uploaded on the website of your Company at www.bata.in under the tab âInvestor Relations > Company Policiesâ at https://www.bata.in/company-policies.html and is available at the link https://www.bata.in/on/ demandware.static/-/Sites-bata-in-Library/default/ vca1a6dc6c6c9dd1e1b2bd451ba8726ee06c054d7/ Staticpagesimages/Company%20Policies/Whistle-Blower-Policy.pdf
The Policy provides access to the Legal Head of your Company and to the Chairman of the Audit Committee. No person has been denied an
opportunity to have access to the Vigil Mechanism Committee and the Audit Committee Chairman.
CONFIRMATION OF COMPLIANCE ON PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company is committed to provide a safe and secure environment to its women employees across its functions and other women stakeholders, as they are considered as integral and important part of the organisation.
In terms of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (as amended) and Rules framed thereunder, your Company has duly adopted a Policy and has also complied with the provisions relating to the constitution of Internal Complaints Committee (ICC). A summary of the complaints dealt during the financial year ended March 31, 2023, in terms of the said Act and Rules framed thereunder has been provided in the Corporate Governance Report which forms part of this Annual Report.
Your Company has been conducting awareness campaign across all its manufacturing units, warehouses, retail stores and office premises to encourage its employees to be more responsible and alert while discharging their duties.
RISK MANAGEMENT AND ADEQUACY OF INTERNAL FINANCIAL CONTROLS
Your Company''s internal financial controls ensure that all assets of your Company are properly safeguarded and protected, proper prevention and detection of frauds and errors and all transactions are authorised, recorded and reported appropriately. Your Company operates through definitive Chart of Authorities (COAs) and Standard Operating Procedures (SOPs) in respect of its operations including financial transactions. Such COAs and SOPs are regularly monitored and if required, modified from time to time depending on business requirements.
Your Company has an adequate system of internal financial controls commensurate with its size and scale of operations, procedures and policies, ensuring orderly and efficient conduct of its business, including adherence to the Company''s policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records, and timely preparation of reliable financial information.
Such practice provides reasonable assurance that transactions are recorded as necessary to permit
preparation of Financial Statements in accordance with the applicable legislations and that the same are well within the COAs and SOPs, without exception. Your Company also monitors, through its Internal Audit Team, the requirements of processes in order to prevent or timely detect unauthorised acquisition, use or disposition of the Company''s Assets which could have a material effect on the Financial Statements of the Company. The Internal Audit function is responsible to assist the Audit Committee and Risk & Compliance Management Committee (RCM Committee) on an independent basis with a complete review of the risk assessments and associated management action plans.
Risk Management is embedded in the Company''s operating framework. Your Company believes that risk resilience is key to achieving higher growth. To this effect, there is a robust process in place to identify key risks across the Company and prioritise relevant action plans to mitigate these risks. Risk Management framework is reviewed periodically which includes discussing the management submissions on risks, prioritising key risks and approving action plans to mitigate such risks. An assessment of cyber security has also been carried out in compliance with the requirement of the Listing Regulations and a mitigation plan has been made to counter such risks.
The Internal Audit Report and Risk Inventory Report are reviewed periodically by the Audit Committee and the RCM Committee respectively. The Chief Internal Auditor is a permanent invitee to the Audit Committee Meetings and a member of the RCM Committee. The Audit Committee advises on various risk mitigation exercises on a regular basis. Your Company has been maintaining a separate Internal Audit Team headed by the Chief Internal Auditor appointed by the Audit Committee of your Board.
Further details pertaining to the RCM Committee and Meetings held during the year under review are given in the Corporate Governance Report. Your Board is of the opinion that the Internal Financial Controls, affecting the Financial Statements of your Company are adequate and are operating effectively.
NON-APPLICABILITY OF MAINTENANCE OF COST RECORDS
The Central Government has not prescribed the maintenance of cost records under Section 148(1) of the Act and Rules framed thereunder with respect to the Company''s nature of business.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Industry Structure and Developments
India is globally the second largest footwear producer and consumer in the World. The Footwear Industry also generates substantial employment with nearly 40% of the people employed in the Industry being women. The Indian footwear market amounted to over USD 23 Billion in 2022, driven by demand for branded, premium, trendy yet functional and comfortable footwear.
Economists expect the market to grow at a CAGR of 6.7% in 2022-2027 with domestic footwear consumption contributing around 90% of indigenous manufacturing. Increasing penetration of smart phones and internet connectivity is further propelling footwear sales.
Consumer sentiments have revived swiftly from the pandemic shock and the domestic footwear market is seeing growth. Exponential growth in the domestic travel and gradual return of corporate travel have also played a significant role in the demand for footwear.
Factors like younger population, rise in standard of living, shift from unbranded to branded footwear, increasing women workforce participation, increasing trend of owing occasion wear and penetration of online marketplaces continue to drive demand for footwear in India.
Opportunities and Threats
The Indian footwear market continues to remain under-penetrated as against the global average. Economists predict the per capita footwear consumption to increase to ~2 - 2.1 pairs by 2025 from the current consumption of ~1.9 pairs. This would still be much below the global average of 3 pairs.
One major factor contributing to the growth of the Indian footwear industry is the increasing demand for footwear in the domestic market. The increasing population and rising disposable income of consumers are leading to higher purchase of footwear. Additionally, rising smart phone penetration, increasing digital payments and awareness about online shopping, better variety and lucrative deals offered has led to increase in online sales.
Footwear consumption has evolved from being need-based to trend-based with women preferring higher lifestyle products. With increasing participation of women in the workforce and higher incomes,
footwear segment is expected to witness strong growth. Women''s and kids segment continue to be the fastest-growing categories with increasing share in overall footwear market.
India is at the intersection of sports, fitness, fashion and the casualisation of lifestyle. Consumer demand for casual footwear is driving growth. Further, within the Indian Footwear Industry, the organised footwear retail is expected to grow to ~40% of the industry by 2025 on the back of factors like:
a) Shift in the perception of footwear to a fashion statement from a utility product.
b) Rapid urbanisation, opening of shopping malls in Tier 3 - 5 cities, higher aspiration levels for branded products.
c) Digital penetration for branded footwear and rising brand awareness through marketing.
d) Emergence of value products and improved penetration of EBOs in Tier 3 - 5 cities and smaller towns.
e) Increased share of e-commerce to reach customers across varied age and income profiles.
f) Enhancing customer experience.
g) Surge in demand for sports and athleisure footwear with increasing focus towards sports and events such as marathons and adventure trips.
However, higher inflation and tightening financial conditions in India may impact demand. With increasing consumer demand, the rise of e-commerce and supportive government policies, the industry is expected to experience significant growth in the coming years.
To accelerate growth and expansion, your Company continues to work on multiple initiatives - Driving Portfolio Evolution, Accelerating Expansion via Franchise & Distribution, Marketing Investments, Exploding Digital Footprint, Agile & Efficient Supply Chain, Staying nimble on costs with Talent, Process, Technology investments at the core.
Your Company is working aggressively on increasing its presence in Tier 3 - 5 cities through opening of franchise stores and distribution network.
Your Company also has opportunities in the I&D business, as Bata is the only player which is present across categories and price points. However, the competition continues to grow with unorganised sector moving into organised space.
Apart from the above, casualisation and
premiumisation of product portfolio, innovation, scaling up digital channels and productivity enhancement will continue to be the priority of your Company along with investments in our brands and stores.
Key Focus Areas Marketing and Campaigns
Bata India continues to remain a strong brand in the footwear industry by consistently delivering on fashion trends with the promise of comfort. The strategic growth levers were amplified by your Company through extensive research and consumer insight-led marketing campaigns. The marketing initiatives, focused on delivering the message of exceptional value to the customers, helped Bata maintain its strong brand image in a highly competitive market.
Sneaker culture has become a global phenomenon, making inroads into mainstream fashion amongst the Gen Z and Millennials. In order to offer a large variety to choose from under one roof, your Company launched a vibrant and groovy campaign ''Unlimited Sneakers at Bata'' which put forth the proposition of 300 Sneaker styles from 9 brands. The Sneaker Studio concept which piloted and was widely accepted last year, was rolled out to over 530 Bata and Franchise stores during the year under review.
During the year under review, Bata became the first footwear brand in India to bring the disruptive format of 3D OOH advertising. Made to engage with the Gen Z and Millennials, the hyper-realistic billboard created a visually compelling story for Bata''s Sneaker Studio.
We set out to strengthen Bata''s proposition of being a fashion-forward brand that offers a fitting blend of style and comfort. To resonate with the Gen Z and Millennials target audience, Bata''s brand ambassador Bollywood actor Ms. Disha Patani became the face of the Brand for fashion, casual and sneaker collections.
Catering to the consumer trends of casualisation, we launched the 24x7 Casual Collection with the 360-degree campaign - ''It''s Got To Be Bata'' with Ms. Disha Patani. Both the collection and the campaign derived inspiration from the versatile roles that women play today while never compromising on style.
To strengthen the Brand with young leaders of the corporate world, we launched Neo Casuals for Neo Leaders campaign highlighting the new casual range for Hush Puppies. The campaign was based on
consumer trends, changes in leadership codes and listening to corporate consumers to enhance Bata''s resonance and aspirational value among the target group. It celebrated the Neo Leaders of today who have been at the forefront of propelling positive change and inspiring others with their progressive and exemplary leadership style.
During the festive season, ''Impressions Collection'' campaign was derived from the consumer insight that great shoes can get one noticed and kick-start conversations at get-togethers and parties, leaving a lasting impression. Featuring Bollywood''s fashion and youth icon Mr. Kartik Aryan, the campaign highlighted Bata''s stylish collection for the wedding and festive season from brands like Bata, Bata Red Label, Marie Claire, Hush Puppies and Naturalizer.
Bata''s digital campaigns and engagement with fashion, lifestyle and entrepreneurial influencers throughout the year, reached over 250 million potential audiences. Bata''s marketing efforts were recognised by the industry through awards like E4M Pitch for Top 50 Brands and IPRCCA for Best Influencer Impact- Social Media/PR & Thought Leadership.
The marketing campaigns successfully positioned Bata as a leader in the footwear industry, showcasing its commitment to provide customers with comfortable, stylish and versatile footwear.
In order to bring innovative ways to engage with the audience and integrate technology at every step of the consumer journey, your Company renovated 140 stores during the year under review, with upgraded music and jukebox innovation that allows shoppers to play their favourite songs as they browse the new fashion and casual collections. In select stores, 3D Holographic Unit, Lift & Learn Technology, Digital LED screens and QR codes for online experiences were introduced.
Bata launched the first Augmented Reality Sneaker Studio on Bata.in allowing users to try sneakers on their feet virtually using AR. It brings an ''endless aisle'' of sneakers to life as customers can superimpose shoes on their feet, try multiple options, share with their friends and place orders from the same interface. Bata was amongst one of the first footwear brands to bring these features at such a scale across website and stores in India.
Bata''s latest innovation is the AR Try On feature on
Bata.in enabling the users to try on different sneaker styles virtually by simply selecting the shoe and pointing their mobile phone''s camera to their feet.
During the year under review, as consumers returned to a more balanced lifestyle, with work from office, celebrations and socialising back on the agenda, your Company presented an equally varied footwear assortment for the season. Red Label & Marie Claire styles gained market share at retail level, as fashion categories witnessed revival in demand, with the boom for fitness and outdoor wear normalising that emerged during the pandemic.
Sneakers continued to be the dominant category for your Company. Futuristic, innovative and more premium iterations of Power Brand provided newness, while lifestyle inspired North Star looks remained the key. XORISE 500 GT with Tunnel system was quite a popular style. It delivered - Comfort, Cushioning & an amazing rebound with an upper constructed with Technical Engineered Mesh and a special outsole that provides 50% better traction.
âFloatzâ - a casual, washable and comfortable footwear saw extreme popularity as more consumers prioritised time spent in nature or at home. During the year under review, your Company launched Floatz 2.0 collection which comes with a bright dual colour sideband, added anatomical support, 50% more cushioning and are extremely light-weight and flexible.
Your Company maintained its focus on formal wear as an increasing number of employers announced return-to-office for their workforce.
Bata Club continues to be the strongest pillar for driving footfall and business. Your Company continues to invest in new technology like machine learning & AI science to drive propensity modelling, cross and same category recommendation and optimized one-to-one communication for âRight customer at Right timeâ. Automation of campaigns was done on different lifecycle segments to drive customers back into stores and online to make a repeat purchase and thereby increasing the active user base.
More focused approach on data science technologies and Omni-channel strategy, led to a 28% increase in active user base over the last year.
Segment wise or product wise performance
Your Company operates in Footwear & Accessories Segment only and performances of major business categories and key brands of your Company during the financial year ended March 31, 2023 are highlighted below:
Since end of 2021, your Company witnessed significant uptick in demand and revitalised its operations across geographies. Your Company continued its expansion drive through Franchisee & COCO Model. The year saw good traction in terms of opening of new stores. A total of 116 Franchisee Stores were opened during the year under review, taking the total to 400 Franchisee Stores. With ''Shop in Shops'' (SIS), your Company made deeper forays into major Departmental Stores. Overall store count crossed 2000 mark during the year under review and is a major milestone in the history of your Company. During the year under review, your Company renovated 140 stores.
Enhancement of Customer Experience remained at the core of your Company and with continuous improvements, a Net Promoter Score of 80 was achieved for the year. To improve customer experience, your Company introduced New Avatar Stores in RED 2.0 Model by renovating stores.
Bata Shoe Care and Bata Shoe Spa were introduced in select stores. Option of Digital receipts were given to the customers wherein they can also have visibility of the Loyalty program.
We continued our focus on controlling our costs related to retail store expenses and generated substantial savings by negotiating rents across our stores.
Your Company also focused on creating the right environment for team development and training. In order to focus our efforts towards that direction, your Company launched Step Up program for Store Managers, District Managers and Retail Managers. We also introduced âUdaanâ for the development and growth of the Store Sales Teams. The Infinity Incentive introduced during the year made sure that store teams stay motivated and put their best foot forward. We also took a strong step towards improving our diversity ratio at all levels within our teams.
Digital Multi-Channel Business
E-commerce business continued its steady growth path during the year under review.
Bata.in platform migration to Salesforce Commerce Cloud has stabilised and have started to show impact on the business growth. Better merchandise assortment display has led to higher ASPs and margin improvements. Bata.in also piloted the Chatbot and Virtual Try-On launch to provide a better engagement and immersive user experience.
In addition, Home Delivery Services initially offered only in over 1200 COCO stores, now have been extended to select Franchisee stores as well on a pilot basis. This will open up the complete product catalogue to a Franchisee customer as well. Home Delivery continues to contribute around 1 million pairs of sales in a year.
B2B business has been steady on Amazon and Flipkart with sharp focus on growth opportunities across categories and brands.
Investment in technology integrations improved customer experience on Bata.in, Returns and Refunds and also led to significant reduction in customer complaints.
BATA Comfit Ladies
Comfit Ladies continues to be a promising brand in our portfolio offering unparalleled comfort with style. Your Company introduced newer generation of Active Walk Collection, called Active 2.0. Overall, the collection can be divided into Classic and Active, wherein Classic has wedges, blocks and the Active has chunky white outsoles.
BATA Red Label
Ladies Red Label offers most stylish, trendy run-way fashion shoes in various styles featuring colours of the season. This brand will also feature the Ethnic Collection in various heel heights, heel designs, bridal collection colours along with the existing Evening Collection.
Hush Puppies
In Hush Puppies, your Company continues to focus on technology and comfort as a part of product expansion strategy. With introduction of new product technologies like Bounce Max, Bounce, Bounce Plus and Deep Comfort, the Brand has ensured the right blend of technology and comfort. With changing consumer trends, Hush Puppies has been increasing its focus on casual shoes. In order to meet the aspirational lifestyle needs of consumers, the Brand has also introduced the premium footwear range which has become the epitome of style and comfort.
The new range for men and women boasts of new age casuals, heels and ballerinas in finest quality leather, High-end knitted fabrics and soft colorful suede for men and women.
The multichannel, Hush Puppies Brand expansion is also driven by right consumer traction and right wardrobe fitment for the loyal consumer base that the Brand enjoys.
Your Company''s non-retail business division comprises of Multi-Brand Outlets, Key Accounts, industrial and institutional business divisions and exports. With the change in consumer behavior as well as Trade Dynamics, we have made changes to provide better service to our Trade Partners and Consumers. We continue to focus on select categories like School and Men''s closed where we have advantages and also on casualisation through Sneakers.
Overall health of the business has improved inspite of sluggish market and your Company is gaining market share.
Bata availability in MBO is now in 1200 towns and 550 enterprises provide Bata shoes to their Employee/Customers through our B2B Division.
The current global economic state, inflation and rising rentals due to boom in commercial real estate market pose challenges to the Indian Footwear Market. Your Company continues to keep its pace with its customers and evolve in every aspect including styles, footwear segments and comfortable yet stylish portfolio.
Customer aspirations are raising towards branded products and with opening of shopping malls in smaller towns, customers expect the same experiences as those in Metros. Adoption of social media by youth has given an opportunity to brands to reach the consumers directly through targeted campaigns. Accordingly, your Company is expanding its physical footprint, especially in Tier 3 - 5 cities, through MBO route as well as through Franchise route and its digital footprint through its own website and marketplaces. Your Company is communicating with the customers with focus on relevant content and to target new audiences on social platforms and reach further into Tier 3 - 5 cities.
Your Company is also working on the brand appeal
amongst Millennials and the Gen Z. Your Company is strategically positioned to harness the present challenges, given the strength of its Brand, innovation capabilities, retail foothold and growing online presence in footwear and accessories category. Your Company continues to implement various cost-savings measures across the network and is actively fleshing out new opportunities across the value chain to capture the emerging consumer demand efficiently.
With regard to online sales, your Company expects to see its digital sales outpace overall growth and plans to have a robust approach whether it is through D2C channel, E-commerce platforms or Omnichannel approachesâwhich are a big hit amongst the customers.
Risks and Concerns and Contingent Liabilities
Your Company acknowledges the footwear industry is undergoing transformation. Customer needs & expectations from footwear industry, purchasing channels and buying habits have evolved. New expectations around customer experience/ product discoverability are influencing business growth drivers and key initiatives. Your Company acknowledges the fact that competition from both domestic and international players, especially at the bottom of the pyramid, is increasing with every passing day.
Your Company acknowledges that continuous evolution of the product portfolio mix is required to maintain relevance of Bata Brand amongst Millennials and the Gen Z. Your Company also realises that modernisation of I.T. systems alongwith having suitable protection from risk of loss / theft of data / other vulnerabilities is a key requirement for business continuity and continuous customer service. Your Company continuously adapts to comply with relevant changes in the Government laws and policies to minimise any adverse impact on sales, cost and operations. Your Company also monitors external factors such as raw material prices, inflation and other geo-political factors to assess and mitigate any adverse effect on business and results of operations.
Your Company monitors its major risks and concerns at regular intervals. Appropriate steps are taken in consultation with all concerned including the RCM Committee and the Audit Committee of the Board to identify and mitigate such risks.
During the normal course of its business operations, your Company has been subjected to litigations
in connection with or incidental thereto. These litigations include civil cases, excise and customs related cases, etc. filed by and against the Company. These cases are being pursued with due importance and in consultation with legal experts in respective areas. Your Board believes that the outcome of these cases is unlikely to cause a materially adverse effect on the Company''s profitability or business performance. Your Company has a Contingent Liability of Rs. 390.56 Million as on March 31, 2023 as compared to Rs. 828.37 Million as on March 31, 2022. Attention is drawn to the explanations mentioned in Note No. 29 of the Notes to Financial Statements for the financial year ended March 31, 2023. In view of the present status and based on legal advice obtained from time to time, your Board is of the opinion that no provision is required to be made against these Contingent Liabilities.
Internal control systems and their adequacy
A separate paragraph on internal control systems and their adequacy has been provided elsewhere in the Board''s Report.
Discussion on financial performance
The Earnings per Share (EPS - Basic and Diluted) of your Company for the financial year ended March 31, 2023 was at Rs. 24.83 as compared to the (EPS - Basic and Diluted) for the previous financial year ended March 31, 2022 at Rs. 7.85. Your Company recorded an EBITDA margin of 22.91% during the financial year under review as compared to 17.41% during the financial year 2021-22.
Your Company does not have any Bank Borrowings and the entire capital expenditure has been funded through internal sources.
The Capital Expenditure incurred during the year under review amounted to Rs. 957.85 Million as compared to Rs. 491.73 Million in the previous year.
Material developments in the human resource / industrial relations front, including number of people employed
Your Company has been continuously working to advance human resources skills, competencies and capabilities within the organisation, which are critical to achieve desired results in line with our strategic business ambitions. Some key initiatives that have been taken in this direction during the year under review are summarised below:
Employee Engagement
⢠Bata Founders Day - Commemorating the day when Bata as a company in its global presence first got registered commercially, we celebrated the month of September 2022 with various interventions across all locations in India. The theme of the celebrations was âgiving back to societyâ and valuing the contributions of our employees. In the true spirit of the celebration, we felicitated our employees with âLong Service Awardsâ.
⢠Fam Jam for Bata Employees - In continuation of our journey to make Bata as employer by choice, âFam Jamâ was celebrated in March 2023, wherein we rejoiced and thanked the families of Bata employees for the continued support to their members who dedicatedly work for the organisation, making it a success story.
⢠Sports Tournament - With an aim to build a stronger One Team connects, a Cricket match, Volleyball & Carrom Board match were organised for the Bata team in factories.
⢠Health Check-up Camp - With a view to scrutiny the health of Bata workers, medical checkup camps were organised. We also organised Covid booster Vaccination dose camp for Bata employees.
⢠Win as One, # Be Bold - National Retail Summit and rewards event was organised to felicitate and reward employees whose exemplary contribution and dedication has led the organisation to strive ahead and succeed. The event also showcased the achievement and the path forward to scale up the ladder of aspiration and growth.
Digitisation - Performance Management
The journey of digitisation for the HR processes started about 8 years ago. During the year under review, the
onboarding of SAP - SF took place and the PMGM Module went live which covers Annual Performance Review process & Goal Setting 2023. This greatly eased the entire process of review, right from the Employee to the Manager. Features like ''Employee Acknowledgements'' on completed appraisal, ''Get Feedback'' from cross functional stakeholders, upload of supporting documents, etc. have resulted in creating higher transparency, reduced manual intervention and greater empowerment to the teams.
Implementation of other modules such as SAP-SF, namely, Employee Central, Compensation Modules, Succession & Development and Recruiting Management are planned for ensuing years.
Training, Learning & DevelopmentLearning & Development
Based on Bata employee survey and feedback, one of the key initiatives for Bata was to enhance the Learning & Development initiatives. Accordingly, your Company launched its online Learning Platform for key talents in December 2022. The platform in association with Skillsoft Percipio has been launched under our L&D framework âThe Bata e-Universityâ.
BATA e-University marks an important milestone as it will support individual talent needs in diverse areas aligned to Bata''s long-term learning and aspirations through one single platform for all L&D needs, under three L&D pillars, Functional Capabilities, Behavioral Capabilities and Leadership Development.
⢠Internal Growth - Internal Job Postings and Internal movements remained focus areas to support the business with opportunities for our employees to learn, perform and grow within the organisation. STEP UP and Career Ladder programs for the store teams were continued with Assessment Centers assessing Bata Competencies.
⢠Agile Workforce - Keeping in mind the changing aspects and working environment of business, we continued the journey with a growth delta in a Flexible working model for offering better agility, flexible timings and enhanced customer service basis business requirements. This model also supports our frontline store operations.
⢠Leadership Development - Flagship programs -Bata Leader and Bata Highflyers were introduced in collaboration with Schlageter Institute, Germany to address the development needs of High Performing employees. This program
focuses on both building leadership competencies (behavioural) facilitated by Schlagers International Coaches as well as functional session facilitated by BATA Subject Matter Experts. The training has been created keeping in mind a blended design with classroom sessions, VLTs webinars and adopt an experiential learning methodology.
Diversity & Inclusion
⢠Your Company maintained its focus on the agenda of Diversity & Inclusion across the organisation. With the vision of having more diverse workforce, Bata has been rigorously working towards hiring a diverse talent pool.
⢠Your Company is committed to providing a work environment, free from harassment of any kind and in particular, a work environment that has zero tolerance for sexual harassment. We conducted ''Prevention of Sexual Harassment at Workplace (POSH)'' virtual awareness sessions for all employees at a Pan India level.
⢠Your Company has been recognised as one of the âBest Organizations for Women for 2023â at the ''Economic Times Best Organizations for Women Conclave 2023 - Powered by Femina''. Economic Times along with their research partner evaluated a universe of 1000 brands that met atleast 80% of the qualifying criteria and Bata India received the recognition basis the research studies.
⢠Bataganj Factory was recognised with âBest Employee Awardâ on the occasion of May Day and Shram Kalyan Diwas from the Labour Department.
⢠3 Awards at UBS Forums - Bata''s CSR Model for Implementation was awarded the Best CSR Model of the Year Award, Best COVID Response for our Initiatives in Covid and Bata''s Stride with Pride Initiative was Recognised as Innovative Project of the year.
Industrial relations across all the manufacturing
units of your Company have been harmonious and
peaceful with active involvement of the employees in the collective bargaining process. Your Company has also encouraged wholehearted participation of the employees and union in improving productivity as well as quality of its products.
As on March 31, 2023, there were 4421 permanent employees on the rolls of your Company.
CAUTIONARY STATEMENT
There are certain Statements which have been made in the Management Discussion and Analysis Report describing the estimates, expectations or predictions, may be read as ''forward-looking statements'' within the meaning of applicable laws and regulations. The actual results may differ materially from those expressed or implied. The important factors that would make a difference to the Company''s operations include demand-supply conditions, raw material prices, changes in Government Policies, Governing Laws, Tax regimes, Global Economic Developments and other factors such as litigation and labour negotiations.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)
In compliance with Regulation 34(2)(f) of the Listing Regulations, read with the SEBI Circular No. SEBI/ HO/CFD/CMD-2/P/CIR/2021/562 dated May 10, 2021, your Company is pleased to publish its 1st Business Responsibility and Sustainability Report (BRSR) for the year 2022-23, in a fair and transparent manner, covering the essential indicators that are required to be reported on a mandatory basis. The Report is aligned with your Company''s approach towards sustainable, inclusive and resilient development, which is annexed to the Board''s Report and marked as Annexure - IX. The BRSR has been uploaded on the website of the Company at www.bata.in and is available at the link https://www.bata.in/bataindia/a-29_s-181_c-42/investor-relations.html
Annexures forming part of this Report
The Annexures referred to in this Report and other information which are required to be disclosed are annexed herewith and form part of this Report:
ACKNOWLEDGEMENT AND APPRECIATION
Your Board is grateful for the continuous patronage of our customers and remains committed to serving them by delivering more style and comfort at every step.
Your Board appreciates the support of our business partners, suppliers, associates and dealers as well as the regulatory authorities of the Central and State Governments in India throughout our journey. Your Board looks forward to their continued assistance and co-operation in the coming years.
Your Board is deeply obliged for the unwavering support and trust reposed by you, our investors & shareholders and is also thankful to the Bata Shoe Organization (BSO) for their continuous guidance and support throughout the year. Your Board also
takes this opportunity to thank the communities your Company operates in, who have reposed their trust in us.
The ownership and responsiveness shown by all stakeholders reflects the spirit of this great organisation. Your Board would like to express its appreciation for the support and commitment shown by employees, workmen and staff including the frontline staff working in our stores and Management headed by the Executive Directors in achieving robust performance on all fronts.
Your Board also places on record its deep appreciation to the Non-Executive Directors, including the Independent Directors of your Company, for their guidance, sharing of knowledge, experience and wisdom, for taking the appropriate decisions in achieving its business goals.
Mar 31, 2022
Your Directors are pleased to present the 89th Annual Report covering the operational and financial performance of your Company along with the Audited Financial Statements for the financial year ended March 31, 2022.
FINANCIAL HIGHLIGHTS & PERFORMANCE
|
(Rs. in Million) |
||
|
Particulars |
Financial Year ended on March 31, 2022 |
Financial Year ended on March 31, 2021 |
|
(Audited) |
(Audited) |
|
|
Revenue from operations |
23,877.19 |
17,072.99 |
|
Other Income |
558.97 |
940.35 |
|
Total |
24,436.16 |
18,013.34 |
|
Profit / (Loss) before Taxation |
1,368.27 |
(1,176.93) |
|
Provision for Taxation |
359.40 |
(274.13) |
|
Net Profit / (Loss) |
1,008.87 |
(902.80) |
|
Other Comprehensive Income / (Loss) (net of tax) |
(4.35) |
48.85 |
|
Total Comprehensive Income |
1,004.52 |
(853.95) |
Your Company has prepared the Financial Statements for the financial year ended March 31, 2022, in terms of Sections 129, 133 and Schedule III to the Companies Act, 2013 (as amended) (the "Act") read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.
During the first half of the year under review, the operations and consequential financial performance of your Company was impacted by the second wave of Covid-19. Your Company witnessed significant recovery in demand during the latter part of the year under review in the backdrop of improvement in consumer sentiments resulting from pent up demand and increase in footfall due to deeper understanding of the pandemic, availability of vaccines and faster easing of restrictions.
Overall, during the financial year ended March 31, 2022, your Company achieved a turnover of Rs. 23,877.19 Million as compared to the turnover of Rs. 17,072.99 Million recorded during the previous financial year ended March 31, 2021, registering a growth of 39.85%. Your Company posted a profit of Rs. 1,008.87 Million for the financial year ended March 31, 2022 as against the Net Loss of Rs. 902.80 Million for the financial year ended March 31, 2021.
On a consolidated basis, your Company reports a turnover of Rs. 23,877.19 Million during the financial year ended March 31, 2022 and a consolidated Net Profit of Rs. 1,029.93 Million for the said financial year.
Your Company continues to be India''s leading footwear brand. Your Company retails through a PAN India network of 1569 Stores in over 640 cities and over 230 ''Shop in Shops'' (SIS).
During the year under review, your Company focused on six major thrust levers - Driving Portfolio Evolution, Accelerating Expansion via Franchise & Distribution, Marketing Investments, Exploding Digital Footprint, Agile & Efficient Supply Chain and on Staying nimble on costs with Talent, Process, Technology investments at the core.
As India Inc. moved towards hybrid working model, a distinct change in consumer preference towards casual and sports footwear was noticeable and accordingly, portfolio expansion and innovation in comfort, design and materials were undertaken during the year under review. With consumers preferring sneakers, your Company strengthened its sneaker proposition by rolling out new ''Sneaker Studios'' to display upto 300 styles, 9 brands in stores & on our website. Sneakers, thus, led the sales during the latter part of the year under review, with brands such as ''Power'' and ''North Star'' leading sales in this category. Your Company also launched ''Floatz'' - a casual, washable and comfortable footwear, which received encouraging response.
Your Company expanded its physical footprint through MBO route as well as through Franchise route and its digital footprint through its own website and marketplaces. Your Company continued to focus on increasing its reach in Tier 3-5 cities and added 75 (net) new Franchise Stores taking the overall tally to 300 Franchise Stores covering 250 towns. Your Company also continues to focus on expansion of digital footprint through its own website, Bata.in and other marketplaces like Amazon, Myntra, Flipkart, Paytm, Tata Cliq and Ajio. It has a robust e-commerce network that delivers to over 1100 cities and towns across the Country.
The Distribution Business and B2B Business of your Company continued to exhibit promising growth with repeat orders and new customers. Bata Products are now available in about 30,000 MBOs.
Your Company continued upshift in marketing investments with new ''Surprisingly Bata Festive'' & ''Unlimited Sneakers at Bata'' campaigns which elevated connect with customers. Bollywood actor Ms. Disha Patani was onboarded as brand ambassador to inspire Indian Youth with our new Sneaker, Casual & Fashion collections. Your Company also rolled out ''NEO casuals for NEO leaders'' under Hush Puppies, the first ever marketing campaign focusing on Hush Puppies.
Your Company continued to invest in supply chain and is working on various initiatives to improve its agility and efficiency. Your Company now offers home delivery through its Omni-channel from all Company-operated stores, thereby, increasing its Pan-India footprint.
Your Company also revamped its entire CRM Platform which helped reducing bounce rate of customers and helps building their loyalty.
Your Company is also working on optimizing its retail network and cost-savings across rentals & operations, manufacturing, and drive efficiencies in its value chain. Your Company continued to invest in I.T., modernization and upgradation of its operations and warehouse management systems.
As a responsible corporate citizen and a trusted Brand, your Company is committed towards its social responsibilities through various initiatives, details of which are covered subsequently in this Report.
The Authorized Share Capital of your Company as on March 31, 2022 stood at Rs. 700 Million divided into 140,000,000 equity shares of Rs. 5/- each. The Issued Share Capital of your Company is Rs. 642.85 Million divided into 128,570,000 equity shares of Rs. 5/- each and the Subscribed and Paid-up Share Capital is Rs. 642.64 Million divided into 128,527,540 equity shares of Rs. 5/- each, fully paid-up.
In line with the Dividend Distribution Policy of your Company, your Board recommends a Dividend of Rs. 54.5 (1090%) per equity share of Rs. 5/- each fully paid-up of your Company for the financial year ended March 31, 2022, which includes onetime Special Dividend of Rs. 50.5 (1010%) per equity share of Rs. 5/- each fully paid-up of your Company. The dividend, if declared, by the Members at the forthcoming Annual General Meeting (AGM) shall be paid to the eligible Members from Tuesday, August 23, 2022 onwards. The total payout of aforesaid dividend amount would be approximately Rs. 7005 Million. The said Dividend Distribution Policy has been uploaded on the website of the Company at www.bata.in under the tab "Investor Relations > Company Policies" at https://www.bata.in/company-policies.html and is available at the link https://www.bata.in/ on/demandware.static/-/Sites-bata-in-Library/default/vca1a6dc6c6c9dd1e1b2bd451ba8726ee06c054d7/Staticpagesimages/ Company%20Policies/DividendDistributionPolicy-BIL.pdf
Pursuant to the Finance Act, 2020 read with the Income-tax Act, 1961, the dividend paid or distributed by a company shall be taxable in the hands of the shareholders w.e.f. April 1, 2020. Accordingly, in compliance with the said provisions, your Company shall make the payment of dividend after necessary deduction of tax at source at the prescribed rates. For the prescribed rates for various categories, the shareholders are requested to refer to the Finance Act, 2020 and amendments thereof.
Your Company has not transferred any amount to the General Reserve during the financial year ended March 31, 2022. CREDIT RATING
ICRA Limited (ICRA) has reaffirmed the Credit Rating of ''[ICRA] AA '' (pronounced as ICRA double A plus) for the Non-Fund Based facilities of your Company. The outlook on the Long-Term Rating is ''Stable''. Further, the disclosure as per Rule 8(5) (xii) of the Companies (Accounts) Rules, 2014, as amended, is not applicable to your Company.
Your Company has no unclaimed / unpaid matured deposit or interest due thereon since December 31, 2013. Your Company has not accepted any deposits covered under ''Chapter V - Acceptance of Deposits by Companies'' under the Act during the financial year ended March 31, 2022.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
In terms of Section 186 of the Act and Rules framed thereunder, details of the Loans given and Investments made by your Company have been disclosed in Note No. 5 of the Notes to Financial Statements for the financial year ended March 31, 2022, which forms part of this Annual Report. Your Company has not given any guarantee or provided any security during the year under review.
During the financial year ended March 31, 2022, all transactions with the Related Parties as defined under the Act read with Rules framed thereunder, were in the ordinary course of business and at arm''s length basis. Your Company does not have a ''Material Subsidiary'' as defined under Regulation 16(1)(c) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended) (the "Listing Regulations").
During the year under review, your Company did not enter into any Related Party Transaction which requires prior approval of the Members of your Company. All Related Party Transactions entered into by your Company had prior approval of the Audit Committee and the Board of Directors, as required under the Listing Regulations. Subsequently, the Audit Committee and the Board have also reviewed the Related Party Transactions on a quarterly basis. During the year under review, there have been no materially significant Related Party Transactions having potential conflict with the interest of your Company.
Since all Related Party Transactions entered into by your Company were in the ordinary course of business and also on an arm''s length basis, therefore, details required to be provided in the prescribed Form AOC - 2 are not applicable to your Company. Necessary disclosures required under the Ind AS 24 have been made in Note No. 35 of the Notes to the Financial Statements for the financial year ended March 31, 2022.
Investor Education and Protection Fund (IEPF)
In compliance with Sections 124 and 125 of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules") as amended from time to time, a sum of Rs.19,97,925/- has been deposited into the specified bank account of the IEPF, Government of India, towards unclaimed / unpaid dividend amount for the financial year ended December 31, 2013.
As per the said Rules, the corresponding equity shares in respect of which Dividend remains unclaimed / unpaid for seven consecutive years or more, are required to be transferred to the Demat Account of the IEPF Authority. During the year under review, your Company has transferred 23,572 underlying Equity Shares to the Demat Account of the IEPF Authority, in compliance with the aforesaid Rules.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN END OF THE FINANCIAL YEAR AND THE DATE OF THIS REPORT
Except those disclosed in this Annual Report, there are no material changes and commitments affecting the financial position of your Company between the end of the financial year i.e., March 31, 2022 and the date of this Report.
During the year under review, no company became or ceased to be a subsidiary, joint venture or associate of your Company. As on the date of this Report, your Company has two wholly owned subsidiaries viz., Bata Properties Limited and Way Finders Brands Limited.
The Annual Reports of these Subsidiaries will be made available for inspection by any Member of the Company at the Registered Office of your Company at 27B, Camac Street, 1st Floor, Kolkata - 700016, West Bengal between 11:00 A.M. and 1:00 P.M. on any working day upto the date of ensuing AGM. The Annual Reports of the aforesaid Subsidiaries for the financial year ended March 31, 2022, shall be provided to any Member of your Company upon receipt of written request. Members may also send an advance request at the e-mail id - share.dept@bata.com for an electronic inspection of the aforesaid documents.
The Annual Reports along with the Audited Financial Statements of each of the Subsidiaries of your Company are also available on the website of your Company at www.bata.in
Pursuant to Section 129(3) of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014 (as amended), a statement containing the salient features of Financial Statements of the aforesaid Subsidiaries has been provided in Form AOC-1 which forms part of this Annual Report.
The Audited Consolidated Financial Statements (CFS) of your Company for the financial year ended March 31,2022, prepared in compliance with Ind AS 27 issued by the Institute of Chartered Accountants of India (ICAI) and notified by the Ministry of Corporate Affairs (MCA), Government of India also form part of this Annual Report.
Details of the Subsidiaries are given in the Annual Return in Form No. MGT - 7 as on March 31, 2022. The Annual Return referred to in Section 92(3) of the Act is available on the website of your Company at www.bata.in under the tab "Investor Relations > Annual Reports" under the link https://www.bata.in/annual-reports.html
Statutory Auditors
In terms of Section 139 of the Act read with the Companies (Audit and Auditors) Rules, 2014 (as amended), M/s. B S R & Co. LLP, Chartered Accountants (ICAI Firm Registration No. 101248W/W-100022) ("BSR") was appointed as the Auditors of your Company for a consecutive period of 5 (five) years from conclusion of the 84th AGM held in the year 2017 until conclusion of the ensuing AGM of your Company and accordingly will complete their present term on conclusion of the ensuing AGM. Your Board places on record its appreciation for the services of BSR during their tenure as the Statutory Auditors of your Company.
The reports given by the Auditors on the Standalone and Consolidated Financial Statements of your Company for the financial year ended March 31, 2022, form part of this Annual Report and there is no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Reports. The Auditors of your Company have not reported any fraud in terms of the second proviso to Section 143(12) of the Act.
It is proposed to appoint M/s. Price Waterhouse Chartered Accountants LLP ("PwCA") (ICAI Firm Registration No. 012754N/ N500016), Chartered Accountants, as Statutory Auditors for a period of 5 (five) consecutive years commencing from the conclusion of the 89th Annual General Meeting till the conclusion of the 94th Annual General Meeting. PwCA is a member firm of the PricewaterhouseCoopers, global network of firms referred to as ''PwC''. It has a legacy of over 140 years in India and has over 15,000 staff. PwCA have consented to the said appointment, and have confirmed that their appointment, if made, would be within the limits laid down by or under the authority of the Act. Further, they have confirmed that they hold a valid certificate issued by the Peer Review Board of ICAI. The Audit Committee and the Board of Directors recommends the proposed appointment.
In terms of Section 204 of the Act, read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended), your Board at its meeting held on February 8, 2022 appointed Mr. Pawan Kumar Sarawagi (ICSI Membership No. FCS 3381 and C. P. No. 4882) of M/s. P. Sarawagi & Associates, Company Secretaries, 27, Brabourne Road, Kolkata - 700001, as the Secretarial Auditors of your Company, to conduct the Secretarial Audit for the financial year ended March 31, 2022 and to submit Secretarial Audit Report.
The Secretarial Audit Report as received from M/s. P. Sarawagi & Associates in the prescribed Form No. MR - 3 is annexed to this Board''s Report and marked as Annexure - I and does not contain any qualification, reservation, adverse remark or disclaimer.
In compliance with Regulation 34 of the Listing Regulations read with Schedule V thereto, the Corporate Governance Report of your Company for the financial year ended March 31, 2022 is annexed as Annexure - II and forms part of this Annual Report.
SIGNIFICANT AND MATERIAL LITIGATIONS / ORDERS
During the year under review, there were no significant material orders passed by the Regulators / Courts and no litigation was outstanding as on March 31, 2022, which would impact the going concern status and future operations of your Company. The details of litigation on tax matters are disclosed in the Auditor''s Report and Financial Statements which form part of this Annual Report. During the year under review, no Corporate Insolvency Resolution application was made or proceeding was initiated, by / against Bata India Limited under the provisions of the Insolvency and Bankruptcy Code, 2016 (as amended). Further, no application / proceeding by / against Bata India Limited under the provisions of the Insolvency and Bankruptcy Code, 2016 (as amended) is pending as on March 31, 2022.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
In compliance with Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 (as amended), a statement containing information on conservation of energy, technology absorption, foreign exchange earnings and outgo of your Company, in the prescribed format, is annexed to this Board''s Report and marked as Annexure - III.
Your Company has an elaborate system-driven compliance programme in place, inter alia, for thorough pre-review of the on-boarding procedure in case of a new manufacturing partner in-sourcing and also for an associate manufacturer for our own factories. This includes clearance of documents and a detailed compliance audit prior to approval. All our factories have been audited by SGS and have been certified as fully compliant by them. Our vendors have also been audited by various competent organizations in order to check their level of compliance.
Your Company has engaged "Lexplosion" for providing support and also ensuring not only all the statutory compliances, but also progressive compliances across the organization. The software provides real-time data visibility and a compliance dashboard. Your factory has achieved benchmarks in the fields of Environment Management Systems (ISO 9001:2015) & Quality Management Systems (ISO 14001:2015). Multiple other initiatives are in progress across Occupational Health and Safety related aspects of your Company''s operations at any given point of time.
Your Company was recognized by Winner Award (under Large Industry Category) under the ZED stream, in the CII National ZED Competition 2021 across industry, for the Zero Defect Zero Effect to manufacturing products & process which are eco-friendly. Our Products meet the optimal Quality Specifications and the systematic approach towards Zero Defect by implementation of DMAIC process for continuous improvement and sustainable development.
To remain competitive, your Company has also focused very strongly on innovation and has successfully introduced "Life Natural" antimicrobial for School shoes (Tennis, Naughty Boy, Scout Ballerina and Hawaii Flip-Flop).
Under Sustainable initiatives, your Company implemented 3R (PVC, Rubber & EVA, Laminated Textile waste, oil filtration & reuse along with reduction initiatives like LED, Motion Sensors, efficient air compressors, VFD/Servo motors, Turbo ventilators, integrated APFC electrical panels) initiative of "Reduce, Reuse & Recycle" program. Additionally, we also have set-up Zero Discharge facilities, Sewage Treatment Plants & Rain-Water Harvesting in our plants.
Your Company has been working continuously with TBU (Tomas Bata University) based out of Zlin, Czech Republic to improve properties of our rubber compound with better abrasion properties. Apart from such initiatives, your Company has also been using upcycled rubber for rubber soles for sports shoes through its association with "Austin Rubber" based out of U.S.A. which makes the product not only performance driven, but also eco-friendly.
Your Company continued its focus on capability and capacity development of indigenous suppliers to reduce lead time and cost. Sourcing was taken nearer to the demand areas for some products. We also created product range with shorter lead time. This resulted in faster replenishment in Stores and Speed-to-Market.
RESEARCH AND DEVELOPMENT ACTIVITIES AND ENERGY CONSERVATION
Research and Development activities during the year under review continued to emphasize on creating a pollution-free and a safe work environment. Technological improvement in product development, material development, introduction of new footwear moulds, process improvement, etc., were the key focus areas to improve quality of footwear and productivity in manufacturing. During the year under review, your Company developed Nail Penetration Resistance Safety boot as per BIS norms IS 15298-Part 2: 2016.
An expenditure of Rs. 40.61 Million was incurred on Research and Development (including product development initiatives) during the year under review, as against Rs. 57.55 Million during the financial year 2020-21. Research and Development Centres at Batanagar, Bataganj & Batashatak manufacturing units of your Company, are approved by the Department of Science & Technology, Government of India.
Your Company achieved reduction of CO2 emission at Batanagar Factory by reduction in Briquette Consumption by 7.5 Ton. Your Company shall continue to invest on Research and Development activities and energy saving measures in its manufacturing units in the future as well.
Further information on conservation of energy and technology absorption are annexed to this Report and marked as Annexure - III.
CORPORATE SOCIAL RESPONSIBILITY
Your Company operates on the belief that an organization should exist to serve a social purpose and enhance the lives of people connected through its business. Your Company has a CSR Policy in place which aims to ensure that your Company continues to operate its business in an economically, socially and environmentally sustainable manner, while recognizing the interests of all its stakeholders. It takes up CSR programmes which benefit the communities in and around the vicinity of its operational presence, resulting in enhancing the quality of lives of the people in those areas.
Your Company continued to demonstrate its social commitment to the communities in and around which it operates. Our community interventions have been aligned with global Sustainable Development Goals (SDGs), primarily on good health & well-being, quality education, reducing inequalities and leveraging partnerships for success.
Bata Children''s Program
During the year under review, we continued to support children under our Global Bata Children''s Programme (BCP), wherein we reached out to more than 4,000 children. There are studies which reflect that the pandemic lead to long-term detrimental effects on education, especially for underserved children, mainly due to digital divide. BCP Program dealt with this situation by adopting a hybrid model for children across schools. We partnered to reach out to children through online and offline mode, focusing on their academics, sports (especially to keep them physically active as schools continued to remain closed), mental health & well-being, conducting counselling sessions (to deal with anxiety and depression due to the pandemic). We addressed the basic needs of the children through renovating classrooms, setting up a dining space, etc., to provide a cordial environment for studies.
Our Stride with Pride program continued to reach out to the frontline Covid warriors through shoe donation drives. We donated more than 64,000 pairs of footwear to the frontline heroes, children in communities, old age homes, etc., across 10 cities. We received recognition from various Government institutions and hospitals.
Under the Covid-19 community interventions, we supported the overburdened medical facilities and government departments with more than 30,000 Covid Care Kits, Oxygen Concentrators, Masks, PPE Kits, etc. We also sensitized BCP children on Covid appropriate behavior for school readiness and supported 100 out-of-school children with nutritious meals. We also collaborated with the Government Medical Dept of Gurugram and supported them with a 20 bedded temporary Covid Care Centre.
Girl Child Support
Bata supported 500 girls for their continued education through distribution of Tablets, Education kits and involving them in extracurricular activities.
Bata Heroes
Our employees have been our pillar of strength across all the social initiatives. During the pandemic, employees reached out to frontline workers and communities at large to conduct COVID support donation drives and footwear donation. With schools closed, our employees were provided opportunities to engage with the children virtually on special occasions like World Health Day, Earth Day, Children''s Day, Christmas, etc. Our employees also participated in the winter donation drive through Goonj and a special virtual volunteering program with Goodera, wherein they recorded audio books for the visually challenged children. With re-opening of schools, we are gradually going back to physical volunteering sessions across BCP schools.
Your Company made significant strides to harness all its resources towards successful execution of the CSR projects across all locations.
Details of composition of CSR Committee and other relevant details have been provided in the Corporate Governance Report. The Annual Report on CSR activities, containing details of CSR projects, amount spent, etc., is appended as Annexure - IV to this Report.
The salient features of the CSR Policy of your Company is appended as Annexure - V to this Report and the complete policy has been uploaded on the website of your Company at www.bata.in under the tab "Investor Relations > Company Policies" at https://www.bata.in/company-policies.html and is available at the link https://www.bata.in/on/demandware.static/-/Sites-bata-in-Library/default/vca1a6dc6c6c9dd1e1b2bd451ba8726ee06c054d7/Staticpagesimages/Company%20Policies/CSR-Policy-Bata-India-Ltd-2021.pdf
There has been no change in the CSR Policy during the year under review.
SUPPORT FROM BATA SHOE ORGANIZATION
Your Company continues to receive support from the Holding Company - Bata (BN) B.V., Amsterdam, The Netherlands and also from Bata Shoe Organization (BSO). Your Company also enjoys the benefits of technical research through Global Footwear Services Pte. Ltd., Singapore (GFS). Your Company has renewed the Technical Collaboration Agreement with GFS with effect from January 1, 2021 for a period of ten years. In terms of the said Agreement, your Company receives guidance, training of personnel and services from GFS in connection with research & development, marketing, brand development, footwear technology, testing & quality control, store location, layout & design, environment, health & safety, risk & insurance management, etc. Your Company continues to obtain expertise and experience from the personnel of gFs and other BSO group Companies to improve its product range and operational processes throughout the year. In terms of the said Agreement, your Company has paid technical services fee of Rs. 245.48 Million to GFS for the financial year ended March 31, 2022, which is around 1% of the Turnover of your Company.
BOARD OF DIRECTORS, BOARD MEETINGS AND KEY MANAGERIAL PERSONNEL Composition
Your Company''s Board is duly constituted and is in compliance with the requirements of the Act, the Listing Regulations and provisions of the Articles of Association of your Company. Your Board has been constituted with requisite diversity, wisdom, expertise and experience commensurate to the scale of operations of your Company.
Meetings
During the year under review, a total of 5 (five) Meetings of the Board of Directors of your Company were held, i.e., on May 14, 2021, June 9, 2021, August 11, 2021, November 3, 2021 and February 8, 2022. Details of Board composition and Board Meetings held during the financial year 2021-22 have been provided in the Corporate Governance Report which forms part of this Annual Report.
Changes in Board Composition
Details of changes in the Board Composition during the year under review are as under:
|
Sl. No. |
Name of the Directors |
Designation & Category |
Reasons and date of appointment / re-appointment |
|
1. |
Mr. Gunjan Shah (DIN: 08525366) |
Managing Director and Chief Executive Officer (Executive) |
Appointed as a Whole-time Director (Additional Director) w.e.f. June 21, 2021, and further appointed as Whole-time Director, liable to retire by rotation, at the 88th AGM held on August 12, 2021. Appointed as the Managing Director w.e.f. October 1, 2021, subject to approval of the Members of the Company. |
|
2. |
Ms. Vidhya Srinivasan (DIN: 06900413) |
Director Finance and CFO (Executive) |
Appointed as a Whole-time Director, liable to retire by rotation, at the 88th AGM held on August 12, 2021. |
|
3. |
Ms. Radha Rajappa (DIN: 08530439) |
Independent Director (Non-Executive) |
Appointed as an Independent Director, at the 88th AGM held on August 12, 2021. |
|
4. |
Ms. Kanchan Chehal (DIN: 09263584) |
Director HR and CHRO (Executive) |
Appointed as Whole-time Director (Additional Director) w.e.f. August 16, 2021, subject to approval of the Members of the Company. |
|
5. |
Mr. Alberto Toni (DIN: 08358691) |
Non-Executive Director |
Retired by rotation and re-appointed pursuant to Section 152(6) of the Act at the 88th AGM held on August 12, 2021. |
With effect from end of business hours on September 30, 2021, Mr. Rajeev Gopalakrishnan (DIN: 03438046), completed his tenure as the Managing Director of your Company and also ceased to be a Director as he relinquished his position to focus on his role as President - Asia-Pacific market at Bata Global Group Level.
With effect from end of business hours on August 12, 2021, Mr. Sandeep Kataria (DIN: 05183714), who was the Whole-time Director and CEO of your Company, relinquished the positions held by him to focus on his other responsibilities in Bata at Global Level.
With effect from end of business hours on June 30, 2021, Mr. Ram Kumar Gupta (DIN: 01125065), retired from his services as Director Finance and CFO of your Company.
With effect from end of business hours on March 31, 2021, Ms. Anjali Bansal (DIN: 00207746) ceased to be an Independent Director of the Company.
The Board places on record its appreciation for their services.
Other details pertaining to the Directors, their appointment / cessation during the year under review and their remuneration are given in the Corporate Governance Report annexed hereto and forming part of this Report.
Directors seeking appointment / re-appointment
Mr. Shaibal Sinha (DIN: 00082504), Non-Executive Non-Independent Director of your Company, is liable to retire by rotation at the ensuing AGM and being eligible, has offered himself for re-appointment. Your Board recommends his re-appointment as a Director (Non-Executive Non-Independent) of your Company, liable to retire by rotation.
Following directors also seek appointment at the ensuing AGM and their appointments are recommended by the Board:
- Mr. Gunjan Shah as the Managing Director and CEO.
- Ms. Kanchan Chehal as Director HR and CHRO (in respect of whom Notices under Section 160 have been received by your Company).
Necessary Resolution(s) alongwith disclosure(s) / further information(s) in respect of the aforesaid directors seeking appointment / re-appointment at the ensuing AGM have been given in the Notice convening the 89th AGM of your Company.
Key Managerial Personnel
As on the date of this Report, Mr. Gunjan Shah (DIN: 08525366), Managing Director and Chief Executive Officer, who was appointed during the year under review, Ms. Vidhya Srinivasan (DIN: 06900413), Director Finance and Chief Financial Officer and Mr. Nitin Bagaria (ACS-20228), Company Secretary & Compliance Officer are the Key Managerial Personnel (KMP) of your Company.
During the year under review, Mr. Rajeev Gopalakrishnan, Mr. Sandeep Kataria and Mr. R. K. Gupta ceased to be KMPs, details of which are given above.
Declaration by Independent Directors
The Independent Directors of your Company have submitted requisite declarations that they continue to meet the criteria of Independence as laid down in Section 149(6) of the Act and Regulations 16(1)(b) and 25(8) of the Listing Regulations and as amended by SEBI (Listing Regulations and Disclosure Requirements) (Third Amendment) Regulations, 2021 and there is no change in the status of their Independence and have confirmed that they are not aware of any circumstance or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties.
In terms of Section 150 of the Act and rules framed thereunder, the above Directors have registered themselves with the Indian Institute of Corporate Affairs (IICA) and they are exempted from appearing for the online proficiency self-assessment test. Furthermore, they have also renewed their registration with IICA for applicable tenures. Ms. Radha Rajappa, who was appointed as an Independent Director w.e.f. June 9, 2021, has complied with the requirements of Rule 6(4) of the Companies (Appointment and Qualifications of Directors) Rules, 2014 (as amended), within the prescribed time.
The Board of Directors further confirms that the Independent Directors also meet the criteria of expertise, experience, integrity and proficiency in terms of Rule 8 of the Companies (Accounts) Rules, 2014 (as amended).
Committees of the Board
Pursuant to various requirements under the Act and the Listing Regulations, the Board of Directors has constituted various committees, such as, Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Risk & Compliance Management Committee and Corporate Social Responsibility Committee. The details of composition, terms of reference, etc., pertaining to these committees are mentioned in the Corporate Governance Report which forms part of this Annual Report.
COMPLIANCE WITH SECRETARIAL STANDARDS
During the year under review, your Company has duly complied with the applicable provisions of the Revised Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) issued by the Institute of Company Secretaries of India (ICSI).
The Board of Directors of your Company has duly constituted an Audit Committee in compliance with the provisions of Section 177 of the Act, the Rules framed thereunder read with Regulation 18 of the Listing Regulations. The recommendations made by the Audit Committee are accepted by your Board.
Name of the Audit Committee members, number of meetings held during the year under review, terms of reference and other requisite details have been provided in the Corporate Governance Report which forms part of this Annual Report.
NOMINATION AND REMUNERATION POLICY
Your Board has adopted a Remuneration Policy for identification, selection and appointment of Directors, Key Managerial Personnel (KMPs) and Senior Management Personnel (SMPs) of your Company. The Policy provides criteria for fixing remuneration of the Directors, KMPs, SMPs as well as other employees of your Company. The Policy enumerates the powers, roles and responsibilities of the Nomination and Remuneration Committee. There has been no change in the said Policy during the year under review.
Your Board, on the recommendations of the Nomination and Remuneration Committee, appoints Director(s) of your Company based on his / her eligibility, experience and qualifications and such appointment is approved by the Members of the Company at General Meetings. The Policy also provides for Board Diversity criteria.
The salient features of the said Policy is appended as Annexure - VI and the complete Policy has been uploaded on the website of your Company at www.bata.in under the tab "Investor Relations > Company Policies" at https://www.bata. in/company-policies.html and is available at the link https://www.bata.in/on/demandware.static/-/Sites-bata-in-Library/ default/vca1a6dc6c6c9dd1e1b2bd451ba8726ee06c054d7/Staticpagesimages/Company%20Policies/Nomination-and-Remuneration-Policy-Revised-2021.pdf
Your Company conducts a Board Evaluation process for the Board of Directors as a whole, Board Committees and also for the Directors individually through self-assessment and peer assessment. The details of Board Evaluation process for the financial year 2021-22 have been provided in the Corporate Governance Report which forms part of this Annual Report.
DISCLOSURES ON REMUNERATION OF DIRECTORS AND EMPLOYEES OF THE COMPANY
Details as required under Section 197(12) of the Act read with Rules 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended), are annexed to this Board''s Report and marked as Annexures - VII and VIII. Further, the Non-Executive Non-Independent Directors of your Company do not accept any sitting fees / commission.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 134 of the Act, the Directors, to the best of their knowledge and belief, hereby confirm that:
(a) in the preparation of the annual accounts, the applicable accounting standards had been followed;
(b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2022 and of the profit of the Company for that period;
(c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) they have prepared the annual accounts on a going concern basis;
(e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
(f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.
WHISTLE BLOWER POLICY / VIGIL MECHANISM
In terms of Section 177 of the Act and Rules framed thereunder read with Regulation 22 of the Listing Regulations, your Company has a Whistle Blower Policy / Vigil Mechanism in place for the Directors and Employees of your Company through which genuine concerns regarding various issues relating to inappropriate functioning of the organization can be raised. A Vigil Mechanism Committee under the Chairmanship of the Audit Committee Chairman is also in place. The Whistle Blower Policy has been uploaded on the website of your Company at www.bata.in under the tab "Investor Relations > Company Policies" at https://www.bata.in/company-policies.html and is available at the link https://www.bata.in/on/demandware.static/-/ Sites-bata-in-Library/default/vca1a6dc6c6c9dd1e1b2bd451ba8726ee06c054d7/Staticpagesimages/Company%20Policies/ Whistle-Blower-Policy.pdf
The Policy provides access to the Legal Head of your Company and to the Chairman of the Audit Committee. No person has been denied an opportunity to have access to the Vigil Mechanism Committee and the Audit Committee Chairman.
CONFIRMATION OF COMPLIANCE ON PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company is committed to provide a safe and secure environment to its women employees across its functions and other women stakeholders, as they are considered as integral and important part of the organization.
In terms of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (as amended) and Rules framed thereunder, your Company has duly adopted a Policy and has also complied with the provisions relating to the constitution of Internal Complaints Committee (ICC). A summary of the complaints dealt during the financial year ended March 31,2022, in terms of the said Act and Rules framed thereunder has been provided in the Corporate Governance Report which forms part of this Annual Report.
Your Company has been conducting awareness campaign across all its manufacturing units, warehouses, retail stores and office premises to encourage its employees to be more responsible and alert while discharging their duties.
RISK MANAGEMENT AND ADEQUACY OF INTERNAL FINANCIAL CONTROLS
Your Company''s internal financial controls ensure that all assets of your Company are properly safeguarded and protected, proper prevention and detection of frauds and errors and all transactions are authorized, recorded and reported appropriately. Your Company operates through definitive Chart of Authorities (COAs) and Standard Operating Procedures (SOPs) in respect of its operations including financial transactions. Such COAs and SOPs are regularly monitored and if required, modified from time to time depending on business requirements.
Your Company has an adequate system of internal financial controls commensurate with its size and scale of operations, procedures and policies, ensuring orderly and efficient conduct of its business, including adherence to the Company''s policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records, and timely preparation of reliable financial information.
Such practice provides reasonable assurance that transactions are recorded as necessary to permit preparation of Financial Statements in accordance with the applicable legislations and that the same are well within the COAs and SOPs, without exception. Your Company also monitors through its Internal Audit Team the requirements of processes in order to prevent or timely detect unauthorized acquisition, use or disposition of the Company''s Assets which could have a material effect on the Financial Statements of the Company. The Internal Audit function is responsible to assist the Audit Committee and Risk & Compliance Management Committee (RCM Committee) on an independent basis with a complete review of the risk assessments and associated management action plans.
Risk Management is embedded in the Company''s operating framework. Your Company believes that risk resilience is key to achieving higher growth. To this effect, there is a robust process in place to identify key risks across the Company and prioritize relevant action plans to mitigate these risks. Risk Management framework is reviewed periodically which includes discussing the management submissions on risks, prioritising key risks and approving action plans to mitigate such risks. An assessment of cyber security has also been carried out in compliance with the requirement of the Listing Regulations and a mitigation plan has been made to counter such risks.
The Internal Audit Report and Risk Inventory Report are reviewed periodically by the Audit Committee and the RCM Committee respectively. The Chief Internal Auditor is a permanent invitee to the Audit Committee Meetings and a member of the RCM Committee. The Audit Committee advises on various risk mitigation exercises on a regular basis. Your Company has been maintaining a separate Internal Audit Team headed by the Chief Internal Auditor appointed by the Audit Committee of your Board.
Further details pertaining to the RCM Committee and Meetings held during the year under review are given in the Corporate Governance Report. Your Board is of the opinion that the Internal Financial Controls, affecting the Financial Statements of your Company are adequate and are operating effectively.
NON-APPLICABILITY OF MAINTENANCE OF COST RECORDS
The Central Government has not prescribed the maintenance of cost records under Section 148(1) of the Act and Rules framed thereunder with respect to the Company''s nature of business.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Industry structure and developments
The Global footwear market valued at over USD 220 Billion, is currently driven by rising demand for fashionable, trendy yet functional and comfortable footwear. Economists expect the market to grow at a CAGR of 4% in the next five years with fashionable footwear contributing more than 25%. Increasing penetration of smart phones and internet connectivity is further propelling footwear sales.
India is poised to become a favourable market for fashion retailers given the following growth drivers:
1. Massive population of middle-class consumers with rising income and purchasing power
2. Increasing economic empowerment for women
3. Change in consumer mindset including brand consciousness
4. Easy availability of consumer credit
5. Increase in choices of quality products
The Indian footwear industry witnessed increased activity with the changing consumer attitude towards footwear. Shoes, initially positioned as a value purchase, were transcending into a lifestyle purchase. It is, however, still under-penetrated with per capita consumption of around 1.7 pairs per annum as compared to the global average of around 3 pairs.
Given the combined effect of outlet closures, shutdown of schools, colleges, etc., preference for Work-from-Home and shift in consumer behavior towards discretionary spending, the Indian footwear industry was one of the seriously hit businesses by the Covid-19 pandemic.
Powered by a massive vaccination drive, the consumer sentiment revived swiftly from the pandemic shock, since then the footwear market in India is witnessing a continuous uptick and is well positioned to grow in double digits over the next few years backed by our Government''s ''Make in India'' drive.
Opportunities and Threats
Indian Retail Industry has emerged as one of the fastest growing industries accounting for over 10% of the Country''s GDP and is projected to grow at a pace of 9%.
Although, it was one of the worst hit industries by the Covid-19 pandemic, it has shown promising signs of recovery. Retail is now growing significantly in the commercial real estate market.
India is the second largest footwear producer and one of the top exporters in the world, contributing significantly to the export earnings and employment generation in the Country. It is also one of the highest employment creating sectors in the Country. On the consumption side, the Country has become a focal point for the fashion and lifestyle businesses over the years, owing to rapidly increasing disposable income.
The pandemic momentarily altered the consumer sentiments towards discretionary spending but also created pockets of momentum and opportunities, for example, online sales and spike in demand for casual and sports shoes. A greater proportion of the overall Indian population, which includes Tier 3-5 cities, now have considerably higher spending power, as a result of which, expansion of the footwear market has resumed. Suppressed demand along with better economic outlook are further expected to boost consumer sentiments and drive-up discretionary spending.
However, factors like rate of economic growth, inflation, regulatory and taxation changes, unemployment trends, etc., continue to affect the growth trajectory of the Indian footwear market, which otherwise possess handsome growth potential for various reasons, including liberal policies, advancement in technologies, innovation, availability of manpower, growth of e-commerce, increasing urbanization, etc.
E-commerce is the fastest growing channel in India and is expected to reach USD 350 Billion by 2030. The Government''s focus to improve digital infrastructure in Tier 2 and Tier 3 markets would be favourable to the sector.
To accelerate growth, your Company is taking multiple initiatives under the key thrust levers - Driving Portfolio Evolution, Accelerating Expansion via Franchise & Distribution, Marketing Investments, Exploding Digital Footprint, Agile & Efficient Supply Chain, Staying nimble on costs with Talent, Process, Technology investments at the core.
Your Company is also working aggressively on increasing its reach to customers in Tier 3-5 cities. Due to strong Brand recall, your Company has been witnessing increasing interest for opening of franchise stores.
Your Company also has opportunities in the I&D business, as Bata is the only player which is present across categories and price points. However, the competition continues to grow with unorganized sector moving into organized space.
The free cash from operations and operating leverage allows financial flexibility to your Company to grow its business organically and/or inorganically as per opportunities available.
Innovation via agile product creation, scaling up digital channels, expansion in Tier 3-5 cities through opening of franchise stores and productivity enhancement will continue to be the priority of your Company along with investments in our brands and stores.
Key Focus Areas
Marketing and Campaigns
After several disruptions due to the pandemic since March 2020, the last financial year began with the hope of strong recovery. However, with the resurgence of the infections in the first quarter of the financial year under review, a mild, but virulent third wave in the fourth quarter of the financial year under review complicated the growth trajectory. During both waves, while restrictions were in place, Bata India stood strong with its promise of resilience to step ahead.
During the pandemic, ''Casualization'' and ''Sneakerization'' emerged as dominant trends. Customers opted for comfortable casual footwear for their out-of-home needs which included office as well as everyday wear. We leveraged this evolving trend and reached out to our customers who had to resume office, through the campaign "Relaxed Work Wear" with our new celebrity ambassador Mr. Kartik Aaryan. The Campaign targeted the inherent need of having great comfort with casual looking styles that can be worn to formal workwear occasions. Towards the end of the year with the pandemic becoming less severe, customers were looking to step out of their homes to relive the joys of pre-pandemic world. Hence our festive season campaign aimed on this insight with "Step Ahead" messaging, encouraging them to move out to enjoy festivities.
While Sneakers emerged as the dominant category especially amongst the Gen Z and millennials, getting a large variety to choose from under one roof continues to be a challenge. Accordingly, your Company launched a vibrant and groovy campaign ''Unlimited Sneakers at Bata'' which put forth our proposition of 300 sneaker styles from 9 brands. At the same time, to bring the proposition alive inside the stores, we piloted physical Sneaker Studios - Single wall with all sneaker styles displayed on it, across various Bata Stores. This Sneaker Studio concept was widely accepted and was rolled out to over 100 Bata and Franchise stores in the fourth quarter.
Women shoppers now seek styles that are versatile enough to take them through multiple occasions in a day. Multifunctional footwear has become more relevant for women today and Bata introduced footwear that merged active and leisurewear attributes. The 24x7 Casual Collection was curated keeping in mind the various roles that women play throughout the day for which they need versatile casual shoes to effortlessly move from one occasion to another. It features Bata, Bata Red Label, Bata Comfit and Naturalizer brands, with artisanal styled heels, wedges & trendy sneakers with hues of colors that can be matched with any occasion, anytime, anywhere. The new campaign features Bata''s new brand ambassador Ms. Disha Patani to attract younger audiences who seek outdoors-inspired benefits, while still wanting a fashion-driven aesthetic that works well for the city life.
For the corporate segment, Hush Puppies is always known as a quintessential premium footwear brand. However, it is now more multifaceted in terms of its offering and not just limited to formal footwear. Hush Puppies''s Neo Casual collection for Neo Leaders offers smart casual and semi casual range of footwear that can easily be worn from boardroom to a party. The launch campaign of Hush Puppies'' Neo Casual collection showcases these new emerging dressing trends for neo age leaders.
Our marketing efforts were recognized by the industry through various awards like Readers Digest India''s Most Trusted Brand, Images Most Admired Retailer, Customer Fest Leadership Award for Contactless Service, Maddies Silver for Most Effective Retail Campaign, IPRCCA Gold for Best Influencer Marketing Campaign & IAMAI Bronze for Interactive Online Marketing.
During the year under review, based on the consumer buying behavior we focused on footwear that merged active and leisurewear attributes, therefore - NorthStar & Power Sneakers have held the top spot across new products taking the Innovation Rate to its highest ever - 27.2%.
Further, accelerated by changes in consumer behaviour, comfortable shoes that can be worn both at home and at office, saw the return of casual shoes and made multi-functionality the key. We incorporated various comfort features into our Red Label casual shoes and brought a fine balance between comfort and the desire to feel smart.
In terms of colours and materials, fresh additions were made to the longstanding neutrals palette to include hues of metallic shine and summer sparkle, alongside comfort-first footwear and artisanal-style craftwork.
We continue to emphasize cloud-like cushioning and technologies like Cushion Soft, Ortholite & Life Natural antibacterial across our footwear.
During the year under review, the focus was primarily to pivot the Customer Services and align the same with NPS feedback inputs and improve Omni-channel experience. NPS as a feedback for loyalty channel was re-launched for all offline and online channels that Bata services. This also involved re-defining consumer journeys and identifying pain points. Multiple new initiatives were rolled out - improved social media engagements and quicker complaint resolution, mapping multiple integration to automate Customer Service operations, implementation of refund automation solutions, improving order failure issues and onboarding new ORM tool with better tech solutions.
Keeping in mind the changes in the overall business environment, Bata Club strategy had to be rejigged. Accordingly, we realigned our focus on scaling up our Omni-channel strategy, profile enrichment drive and email campaigns to increase awareness and drive traffic to bata.in. We also invested heavily on machine learning & AI science to create life cycle segmentation, propensity modelling, and more optimized one-to-one communication for "Right customer at Right time". Dedicated campaign communication aimed at different life cycle segments like New, Grow, Stable, Decline, and lapsed have helped driven customer back to stores for repeat purchase, and increasing the active user base annually.
In recently concluded 15th edition of Customer Fest, an event that celebrates adoption of CRM, CX & data science programs and practices in brands across all industry sectors in India, Bata won the most prestigious category "Champion of Champions - Loyalty Program of the Year 2022".
Segment wise or product wise performance
Your Company operates in Footwear & Accessories Segment only and performances of major business categories and key brands of your Company during the financial year ended March 31, 2022 are highlighted below:
India Inc., experienced a roller coaster ride during the year under review, as it experienced the devastating subsequent waves of the Covid-19 infections. This impacted the regular and consistent working of our stores, factories and offices, which were closed in chequered manner depending on the severity of the infections in various parts of the Country. Your Company learned to live with these starts and stops of the business, drawing heavily from its ethos and values. Our teams on ground displayed tremendous agility, ingenuity, grit, and resilience which helped us chart out the road for normalization in these trying times. Your Company went through a phased strategy of survive, revive, revitalize & thrive in financial year under review, to face the challenges of the continuing pandemic and come out of it.
We continued our program of conducting extensive training for our store teams on a detailed 27-point safety SOP for our store opening and running. Our store teams worked relentlessly to ensure Bata stores were following all the safety protocols and local guidelines, while ensuring, minimal impact on our store operations. We continued our work with the local communities while extended helping hand to our store teams as well.
We increased digitalization of our internal communication channel & conducted multiple calls & townhalls to keep the teams on ground motivated & connected during lockdown & post lockdown period & also scaled up ''I Grow'', a digital learning platform for retail team which had over 2 lac hours of learning.
We continued our focus on controlling our costs related to retail store expenses and generated millions of savings by negotiating rents across 1000 stores.
Your Company continued to develop new business channels in line with changing consumer behavior. For Digital Adopters and Digital Novices, we rolled out innovative solutions like Bata ChatShop - WhatsApp shopping, Bata Store on Wheels, and Bata Home Delivery, which enabled easier & safe shopping experience for our customers even as the pandemic''s 2nd and 3rd waves raged on. The sales though digitally enabled channels continued to grow in the last one year. Today 60% of marketplaces orders are delivered via our stores, powered by Omni-channel technologies.
Your Company enabled multiple tech initiatives at the store level such as Contact-less payments, Find a Pair, Find my size, QR code scanning, Bata Loyalty Program, store updates on Google etc., which improved the overall customer experience and safety.
We have continued our expansion in Tier 3 to 5 cities via the franchisee model. The year saw good traction not only in store openings for this channel but a sustained Like for Like growth as well. We opened a total of 75 (net) franchise stores this year, taking the total to 300 franchise stores in the Country.
We have also made deeper forays into the Departmental Stores like Shoppers Stop, Lifestyle and Central with ''Shop in Shops'' (SIS). We have had good success in the above-mentioned SIS, selling more premium products in over 230 SIS.
Digital Multi-Channel Business
E-commerce business continued its steady growth path during the year under review. We sold more than 2.8 Million pairs of footwear through online channels and achieved a turnover of Rs.1601 Million.
Bata.in underwent a platform change from Octashop to Salesforce Commerce Cloud with enhanced UI/UX to create customer delight in its purchase journey on our website. Endless Aisle that connected retail store inventory to online website with technical integration, has opened the complete Bata product catalogue to the shoppers.
Bata India shipped 100% of orders received from Bata.in through its stores. Marketplace business on Amazon, Flipkart, Myntra, Tata Cliq etc., saw a significant growth as well. We opened a dedicated warehouse facility managed by third party to further service our Marketplace orders.
In addition, Home Delivery Services offered in over 1200 stores allowed store staff to place orders on customer''s behalf if the article of their choice was not available in the store and retain customers, who otherwise would have walked out of our stores due to non-availability of size and color. This service contributed about 5% of Retail stores revenue and sold over 1 Million pairs.
B2B business has been steady on Amazon and Flipkart with sharp focus on growth opportunities across categories and brands. Focus has been on improving secondary sales on these platforms which in turn improves primary business.
Rigorous marketing campaigns including Cost per Click (CPC) and Cost per Million Impressions (CPM) were launched while diligently participating in brand specific and category specific events for increased Brand visibility.
Tech integrations like Return and Exchange Functionality improved customer experience on Bata.in, thus reducing customer complaints.
Your Company has also focused on Technology upgradation to make internal processes robust and strengthen the serviceability. Hush Puppies
In Hush Puppies, we continued our approach of communicating about technology, with introduction of new product technologies like Bounce Max, Bounce and Bounce Plus. With changing consumer trends, Hush Puppies has been increasing its focus on casual shoes. We introduced a large variety of casual shoes in a vibrant range of colors. The collection is a perfect addition to wardrobe with a variety of styles that can be paired up for modern work attires to on-the-go ensembles to trendy weekend looks.
The new range for men and women comes with smart sneakers, pumps and ballerinas in smooth-grain leather, knitted fabrics and soft colorful suede for men and women. The collection boasts of athletic-inspired comfort combined with elevated tailored styling that allows for more wearing occasions than an average shoe choice.
The Hush Puppies store network has driven consumer satisfaction and Like for Like sales, much ahead of the competition this year.
American shoe brand Naturalizer has been a pioneer in designing shoes specifically suited to the contours of women''s feet since 1927. After successfully launching its exclusive stores in multiple international cities like New York, Chicago, Toronto & Dubai, Naturalizer has launched its flagship store in India at Mall of India, Noida. Our further expansion of EBO''s took a pause given the pandemic situation. Designed in New York and adorned by working women, ''the shoe with the beautiful fit'' has been retailing exclusively in India at 50 Bata stores across 4 cities for almost a decade.
Our Concept stores in India have been launched basis the New York, 5th Avenue store of the brand, carefully cultivated to reflect brand''s heritage while incorporating modern elements to offer the ultimate brand experience designed specifically with customers in mind. The objective behind this store launch is to reach the loyal customer base while creating the ultimate destination for discovery through a strong retail showcase and experiential marketing.
The Naturalizer collection serves well to the modern-day women for all day comfort as the patented N5 comfort technology with unmatched ease. The collection flaunts countless styles ranging from pumps, mules, chunky soles and heels. The brand''s design philosophy resonates with modern aesthetics combined with textures from their own archives and finds ways to incorporate them in the new collections.
Your Company''s non-retail business division comprises of Multi-Brand Outlets, Key Accounts, industrial and institutional business divisions and exports. With the change in consumer behavior as well as Trade Dynamics, we have made changes to provide better service to our Trade Partners and Consumers. We continued to focus on select categories and casualization. Overall health of the business has improved in last 3 quarters inspite of the pandemic.
Bata availability in MBO is now in 1000 towns and about 550 enterprises provide Bata shoes to their Employee/Customers through our B2B Division.
The current economic state, inflation, challenging retail environment and new waves of pandemic pose threats to businesses across all sectors. However, Footwear market is seeing a bounce back in occasion-based purchases, office wear and school wear. Your Company continues to keep its pace with its customers and evolve in every aspect including styles, footwear segments and comfortable yet stylish portfolio. Customer aspirations are evolving and people in smaller towns expect the same experiences as those in Metros. Accordingly, your Company is expanding its footprint across the Country. Your Company is also working on the brand appeal amongst millennials and Gen Z. Your Company is strategically positioned to harness the present challenges, given the strength of its Brand, innovation capabilities, retail foothold and growing online presence in footwear and accessories category.
With regard to online sales, your Company expects to see its digital sales outpace overall growth and plans to have a robust approach whether it is through D2C channel, E-commerce platforms or Omni-channel approaches â which are a big hit amongst the customers.
Risks and Concerns and Contingent Liabilities
Your Company acknowledges the fact that competition from both domestic and international players is increasing every passing day. In addition to increasing competition, Covid has changed customer''s needs, behaviour and buying habits and subsequent covid waves, even localized, may impact customer experience and business operations. Your Company acknowledges that continuous changes will have to be made in the product portfolio mix, so that Bata brand will not lose relevance to the millennials and the increasing youth population of India. Your Company also realizes that modernization of I.T. systems along with having suitable protection from risk of loss / theft of data / other vulnerabilities is one of the major areas of concern globally. Your Company monitors its major risks and concerns at regular intervals. Appropriate steps are taken in consultation with all concerned including the RCM Committee and the Audit Committee of the Board to identify and mitigate such risks.
During the normal course of its business operations, your Company has been subjected to litigations in connection with or incidental thereto. These litigations include civil cases, excise and customs related cases, etc. filed by and against the Company. These cases are being pursued with due importance and in consultation with legal experts in respective areas. Your Board believes that the outcome of these cases is unlikely to cause a materially adverse effect on the Company''s profitability or business performance. Your Company has a Contingent Liability of Rs. 828.37 Million as on March 31, 2022 as compared to Rs. 411.65 Million as on March 31, 2021. Attention is drawn to the explanations mentioned in Note No. 30 of
the Notes to Financial Statements for the financial year ended March 31, 2022. In view of the present status and based on legal advice obtained from time to time, your Board is of the opinion that no provision is required to be made against these Contingent Liabilities.
Internal control systems and their adequacy
A separate paragraph on internal control systems and their adequacy has been provided elsewhere in the Board''s Report. Discussion on financial performance
The operations and consequential financial performance of the Company remained impacted during the year under review due to the Covid-19 pandemic.
The Earnings per Share (EPS-Basic and Diluted) of your Company for the financial year ended March 31, 2022 was at Rs. 7.85 as compared to the (EPS-Basic and Diluted) for the previous financial year ended March 31, 2021 at Rs. (7.02). Your Company recorded an EBITDA margin of 17.41% during the financial year under review as compared to 9.17% during the financial year 2020-21.
Your Company does not have any Bank Borrowings and the entire capital expenditure has been funded through internal sources.
The Capital Expenditure incurred during the year under review amounted to Rs. 491.73 Million as compared to Rs. 343.18 Million in the previous year.
Details of significant changes in key financial ratios alongwith explanation
In compliance with the requirement of the Listing Regulations, the key financial ratios of the Company alongwith explanation for significant changes (i.e., for change of 25% or more as compared to the immediately previous financial year will be termed as ''significant changes''), has been provided hereunder:
|
Sl. No. |
Particulars |
2021-22 |
2020-21 |
|
(i) |
Debtors to Sales (in days) |
11 |
17 |
|
(ii) |
Inventory to Turnover Ratio (in months) |
2.74 |
2.81 |
|
(iii) |
Interest Coverage Ratio |
1.87 |
(0.70) |
|
(iv) |
Current ratio |
2.44 |
2.61 |
|
(v) |
Debt Equity Ratio1 |
0.60 |
0.59 |
|
(vi) |
Operating Profit Margin (%) |
7.28 |
(4.25) |
|
(vii) |
Net Profit Margin (%) |
4.23 |
(5.29) |
|
(viii) |
Return on Net worth (%) |
5.56 |
(5.13) |
* There is no borrowing in the Company. However, Finance cost includes interest expenses accounted for various deposits in accordance with Ind AS 109, Financial Instruments and interest expense accounted on various lease contracts in accordance with Ind AS 116, Leases has been considered as debts.
The significant changes over previous year across all ratios is due to higher sales, faster realisations and stores re-openings post lifting of lockdowns restrictions. For detailed explanation, please refer to Note no. 39 of the Notes to Standalone Financial Statements for the financial year ended March 31, 2022.
The other financial ratios of the Company relating to previous 10 years has been provided in other part of Annual Report 2021-22.
Material developments in human resource / industrial relations front, including number of people employed
Your Company has been continuously working to advance human resources skills, competencies and capabilities within the Company, which are critical to achieve desired results in line with our strategic business ambitions. Some key initiatives that have been taken in this direction during the year under review are summarized below:
Employee Engagement
⢠COVID Heroes Day - To meet our customers'' expectations, our front end teams comprising of store staff, field sales, warehouses and factories worked in tandem following the various restrictions, guidelines and protocols issued by State Governments. At the time when even local transportation was not available, our teams ensured that the right products are delivered to our customers at the earliest. In appreciation for their relentless support, dedication and going beyond
the "Call of duty", we dedicated 26th August 2021 as "COVID Heroes Day". Our entire team stepped out and visited every store, factory and warehouse and shared their appreciation with some gifts and celebrations, thanking them for their efforts. Over the week, we were able to reach out to our employees at stores/warehouses/RDCs/depots and thanked and appreciated them.
⢠Cricket Tournament - Post relaxation of the Covid restrictions, with an aim to build stronger One Team connects, a Cricket match was organised for our employees in Gurugram. This proved as a good step for "Getting back to normal" situation and it helped the employees'' bond on the field and outside of it, as offices opened up for regular hours.
⢠Virtual Connects and Celebrations - We have continued to strengthen our employee connect on digital mode on special days and festivals. We have also been able to include the families of our employees for live games and competitions. We held Townhalls wherein the CEO briefed on the performance of the Company and future direction. We also took it as an opportunity to recognise employees across departments and locations for their good work, efforts and achievements.
⢠Customer Centricity -
> Revamped Induction Program - We successfully revamped the induction program for new joiners under the umbrella of WOW (Welcome to our World). The objective is to inspire a sense of welcome among all new joiners and business know-how by means of inter-departmental interactions, create awareness of processes and drive in-depth store induction. This helps us to bring new talent to speed and contribute effectively in your Company''s growth.
> We continued to focus on keeping our internal and external customers at the forefront. The concept of employee satisfaction who are our internal customers, lead to all aligned approach towards the common goal of customer centricity and best-in-class experience in product and service.
Administration
⢠Covid protocols followed and Hospital Tie-ups - With an aim to keep our employees safe and for the continuity of business, our respective regional and unit HR teams have ensured that all our employees were 100% vaccinated. Teams were trained on Covid guidelines and ensured effective re-opening of offices as per the Government guidelines. Regular communication to keep our employees abreast with Govt. guidelines and internal advisories were made. Repository for employee demographics was maintained for timely and adequate support. Tie-ups for hospital and meals were done for immediate attention and support to the employees during hours of need.
⢠Online medical consulting service for all the employees - We tied-up with a digital App partner for providing online medical consultation so that our employees can get adequate support in case of any medical issues / emergency.
Training, Learning & Development
⢠Competency development in Retail - During the year under review, we developed problem solving and team developer competencies in our retail network. We have partnered with a specialist sales and operations organization to provide holistic, multidimensional, technology driven and future retail ready competency-based sales and operation trainings to our District Managers and above population through a Train-the-Trainer approach, who then cascades these training programs to our field workforce thereafter.
⢠Manufacturing Curated Program offerings - We have curated courses addressing the needs of the manufacturing vertical. These self-development programs cater to Coaching, Negotiation skills of concerned managers, apart from advancing their communication skills.
⢠Online Learning Programs - We re-launched learning platform - iGROW for our employees. With an aim to enhance the learning opportunities, we expanded our learning catalogue of courses based on the training needs identified through the Bata Performance Review process. During the year under review, 65% employees completed one or more training programs. These training programs provide a wide curriculum including leadership skills, digital marketing, strategic thinking, innovation, supply chain, etc.
Career Management
⢠Internal Growth - Internal Job Postings and Internal movements remained focus areas to support the business with opportunities for our employees to learn, perform and grow within the organization. STEP UP and Career Ladder for the store teams were programs that were implemented with Assessment Centers assessing Bata Competencies. 1
Flexible working model for offering better agility, flexible timings and enhanced customer service basis business requirements. This model also supports our frontline store operations.
⢠Leadership Development - Our flagship programs Bata Leader and Bata Highflyers were introduced in collaboration with Schlageter Institute, Germany to address the development need of High performing employees. The objective of these interventions is to support the development journey to create Bata leaders of tomorrow ahead.
⢠Talent Acquisition - Bata continues to be recognized as an Employer of Choice.
⢠Talent Assessment - For the first time at Bata, we implemented a Talent Management Review (TMR) process which covered the internal Bata India talent landscape. To assist each department, critical roles were identified, talent pipelines were created and comprehensive talent mapping was completed. A development plan and defined career path for high potentials through training and internal functional cabinets were created.
Diversity & Inclusion
⢠We continued our focus on our Diversity & Inclusion agenda across the organization. With the vision of having more diverse workforce, we have been rigorously working towards hiring a diverse talent pool. We have made conscious efforts through various collaborations with organizations for hiring diverse talent across various levels in our organization through all functions and regions.
⢠WForce virtual programs - Throughout the year under review, we invited experts from the industry and conducted virtual programs with the employees on ''Mental Health & Well Being'', ''Inclusivity & its importance'' and celebrated ''International Women''s Day'' covering both men and women workforce for these sessions to listen to best practices and also engage through Q&A sessions thereafter.
⢠Your Company is committed to provide a work environment free from harassment of any kind and in particular, a work environment that has zero tolerance for sexual harassment. We conducted ''Prevention of Sexual Harassment at Workplace (POSH)'' virtual awareness sessions for all employees at a Pan India level.
Industry Recognition
We built ''Employer Brand Value'' through participation in external awards -
⢠CII Award - ''HR Best Practices in Business Partnering'', awarded first prize (our 2nd GOLD trophy consecutively in 2 years).
⢠North India''s Best Employer Brand in 2021 - Bata was recognized for its HR strategy linked to business, agile People policies, Talent Management practices and cultivating competencies for the future to enable building the organization to be future-ready.
Your Company believes in developing long term relationships with all our employees on an ongoing basis. Industrial relations at all the manufacturing units of your Company have been harmonious and peaceful with active involvement of the employees in the collective bargaining process. Your Company has also encouraged wholehearted participation of the employees and union in improving productivity as well as quality of its products.
As on March 31, 2022, there were 4357 permanent employees on the rolls of your Company.
There are certain Statements which have been made in the Management Discussion and Analysis Report describing the estimates, expectations or predictions, may be read as ''forward-looking statements'' within the meaning of applicable laws and regulations. The actual results may differ materially from those expressed or implied. The important factors that would make a difference to the Company''s operations include demand-supply conditions, raw material prices, changes in Government Policies, Governing Laws, Tax regimes, global economic developments and other factors such as litigation and labour negotiations.
BUSINESS RESPONSIBILITY REPORT (BRR)
In compliance with Regulation 34(2)(f) of the Listing Regulations read with the SEBI Circular No. CIR/CFD/CMD/10/2015 dated November 4, 2015, your Company has prepared a BRR in the prescribed format for the financial year ended March 31, 2022 describing initiatives undertaken by it from an environmental, social and governance perspective, which is annexed
to the Board''s Report and marked as Annexure - IX. The BRR has been uploaded on the website of the Company at www.bata.in and is available at the link https://www.bata.in/bataindia/a-29_s-181_c-42/investor-relations.html
Annexures forming part of this Report
The Annexures referred to in this Report and other information which are required to be disclosed are annexed herewith and form part of this Report:
|
Annexure |
Particulars |
|
I |
Secretarial Audit Report |
|
II |
Corporate Governance Report |
|
III |
Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo |
|
IV & V |
Annual Report on CSR activities and CSR Policy (Salient features) |
|
VI |
Nomination and Remuneration Policy (Salient features) |
|
VII & VIII |
Disclosures on remuneration of directors and employees of the Company |
|
IX |
Business Responsibility Report |
Your Board expresses its deep sense of gratitude towards the customers for their continuous patronage and remains committed to serving them by delivering more style and comfort at every step.
Your Board is grateful to our business partners, suppliers, vendors, associates and dealers as well as the regulatory authorities of the Central and State Governments in India associated with your Company in its progress and places on record its appreciation for their support and co-operation. Your Board looks forward to their continued assistance in future.
Your Board is deeply grateful to our investors and shareholders for the unwavering confidence and faith in us. Your Board is also thankful to the Bata Shoe Organization (BSO) for their guidance and support throughout the year.
Your Board also acknowledges and appreciates the Independent Directors and the Non-Executive Directors of your Company for their contribution by way of strategic guidance, sharing of knowledge, experience and wisdom, which helps your Company to take the appropriate decisions in achieving its business goals.
Your Board places on record its deep appreciation to the employees, workmen and staff including the Management headed by the Executive Directors for their hard work, dedication and commitment, particularly during the pandemic and overall challenging business environment. Your Board places on record their special gratitude towards the front line staff working in our stores.
The ownership and responsiveness shown by all stakeholders during the pandemic is inimitable and is a testimony of the spirit of this great organization.
For and on behalf of the Board of Directors
Place : Gurugram Managing Director and CEO Director Finance and CFO
Date : May 25, 2022 DIN: 08525366 DIN: 06900413
Agile Workforce - Keeping in mind the changing aspects and working environment of business, we have introduced
Mar 31, 2021
Your Directors are pleased to present the 88th Annual Report covering the operational and financial performance of your Company along with the Audited Financial Statements for the financial year ended March 31, 2021.
FINANCIAL HIGHLIGHTS & PERFORMANCE
|
(Rs. in Million) |
||
|
Particulars |
Financial Year ended on March 31, 2021 |
Financial Year ended on March 31, 2020 |
|
(Audited) |
(Audited) |
|
|
Revenue from operations |
17,072.99 |
30,534.51 |
|
Other Income |
940.35 |
688.41 |
|
Total |
18,013.34 |
31,222.92 |
|
Profit / (Loss) before Taxation |
(1,176.93) |
4,850.77 |
|
Provision for Taxation |
(274.13) |
1,581.62 |
|
Net Profit / (Loss) |
(902.80) |
3,269.15 |
|
Other Comprehensive Income / (Loss) (net of tax) |
48.85 |
(20.27) |
|
Total Comprehensive Income |
(853.95) |
3,248.88 |
Your Company has prepared the Financial Statements for the financial year ended March 31, 2021 in terms of Sections 129, 133 and Schedule III to the Companies Act, 2013 (as amended) (the âActâ) read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.
The operations and consequential financial performance of the Company remained impacted throughout the year under review due to the Covid-19 pandemic. During the financial year ended March 31, 2021, your Company achieved a turnover of Rs. 17072.99 Million as compared to the turnover of Rs. 30,534.51 Million recorded during the previous financial year ended March 31, 2020. Revenue from operations of your Company was lower by 44% mainly on account of lower sales due to disruptions owing to the pandemic resulting in continued slowdown of the economy including decline in consumption of non-essential goods. Your Company reports a loss of 902.80 Million for the financial year ended March 31, 2021 as against the Net Profit of Rs. 3,269.15 Million for the financial year ended March 31, 2020. The Loss after Tax for the financial year ended March 31,2021 reflects a degrowth of 128% over the corresponding Profit for the financial year ended March 31,2020.
On a consolidated basis, your Company reports a turnover of Rs. 17084.80 Million during the financial year ended March 31, 2021 and a consolidated Net Loss of Rs. 893.11 Million for the said financial year.
With the Covid-19 pandemic impacting people across the globe, socially and economically, your Company also witnessed severe disruption in its operations, which impacted the annual performance of your Company. The financial year under review began amidst nation-wide lockdowns imposed by the Central Government to contain the spread of Covid-19 and the lockdowns were followed by systematic/gradual removal of restrictions on the free movement of people by the Central and/ or the State Governments. The Country also witnessed a second wave of the pandemic beginning in the last quarter of the financial year under review.
While the novel Corona virus has had a terrible humanitarian impact, it is also taking a heavy toll of economies across the world. One of the worst hit sectors is Retail. Accordingly, the operations of the Company during the financial year 2020-21 have also been adversely impacted.
Given the above backdrop, your Company continued to be India''s leading footwear brand during the year under review by maintaining its focus on getting back on its recovery path, with improvement of sales through its retail outlets and e-commerce platforms and hyperlocal digital channels like Bata ChatShop and Bata Store-on-Wheels. Your Company also launched new marketing campaigns like âKick Out 2020â, âReady Againâ collection, âSneaker Festâ and by continuing to implement âSweeping Angela off her Feetâ strategy. With the health and hygiene of our customers and employees as the focus areas since the onset of the pandemic, the Company is striving to gain share and is also working on various cost optimisation measures.
Your Company has adopted âSurvive, Revive, Revitalise and Thriveâ strategy to drive footfalls, stay engaged with customers and continue to build the Brand Equity. The Company also continued to keep itself agile by investing in I.T., modernization and upgradation of its operations and warehouse management systems.
As India continues to âWork From Homeâ with restrictive movements outside of home, a distinct change in consumer preference towards casual and sport footwear was noticeable.
Your Company is focusing on increasing its reach to Tier 3-5 cities by expanding through franchise route and is planning to open 50 stores every year.
Your Company also bolstered its omni-channel home delivery offerings in 1200 stores thereby increasing its Pan-India footprint.
Your Company also continues to focus on increasing its sales through Bata.in and other online marketplaces. It has a robust e-commerce network that delivers to over 1100 cities and towns across India. In addition, your Company also sells its products through partners like Amazon, Myntra, Flipkart, Paytm, Tata Cliq and Ajio, amongst others.
Your Company has also introduced purchases via WhatsApp chat with the neighbourhood stores for our customers. Further developments on our e-commerce business have been covered subsequently in this Report.
The Distribution Business and B2B Business of your Company also showed promising growth with repeat orders and new customers. Bata Products are now available in about 25000 MBOs.
As a responsible corporate citizen and a trusted Brand, your Company is committed through various initiatives including completion of donation of 2 lakh pairs of shoes to assist the health care workers, volunteers and their families and the frontline fighters who have been helping the Country in recovering from the Covid-19 pandemic.
The Authorized Share Capital of your Company as on March 31,2021 stood at Rs. 700 Million divided into 140,000,000 equity shares of Rs. 5/- each. The Issued Share Capital of your Company is Rs. 642.85 Million divided into 128,570,000 equity shares of Rs. 5/- each and the Subscribed and Paid-up Share Capital is Rs. 642.64 Million divided into 128,527,540 equity shares of Rs. 5/- each, fully paid-up.
In line with the Dividend Distribution Policy of the Company, your Board recommends a dividend of Rs. 4/- per Equity Share of Rs. 5/- each (i.e., 80%) for the financial year ended March 31, 2021. The dividend, if declared, by the Members at the forthcoming Annual General Meeting (AGM) shall be paid to the eligible Members of the Company from Wednesday, August 25, 2021 onwards. The total payout of aforesaid dividend amount would be approximately Rs. 514.11 Million. The said Dividend Distribution Policy has been annexed to this Board''s Report as Annexure - I and has also been uploaded on the website of the Company at www.bata.in and is available at the link https://www.bata.in/0/pdf/DividendDistributionPolicy-BIL.pdf
Pursuant to the Finance Act, 2020 read with the Income-tax Act, 1961, the dividend paid or distributed by a company shall be taxable in the hands of the shareholders w.e.f. April 1, 2020. Accordingly, in compliance with the said provisions, your Company shall make the payment of dividend after necessary deduction of tax at source at the prescribed rates. For the prescribed rates for various categories, the shareholders are requested to refer to the Finance Act, 2020 and amendments thereof.
The Company has not transferred any amount to the General Reserve during the financial year ended March 31, 2021. CREDIT RATING
ICRA Limited (ICRA) has reaffirmed the Credit Rating of ''[ICRA] AA '' (pronounced as ICRA double A plus) for the Non-Fund Based Facilities of your Company. The outlook on the Long-Term Rating is ''Stable''. Further, the disclosure as per Rule 8(5) (xii) of the Companies (Accounts) Rules, 2014, as amended, is not applicable to the Company.
Your Company has no unclaimed / unpaid matured deposit or interest due thereon since December 31,2013. Your Company has not accepted any deposits covered under ''Chapter V - Acceptance of Deposits by Companies'' under the Act during the financial year ended March 31,2021.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
In terms of Section 186 of the Act and Rules framed thereunder, details of the Loans given and Investments made by your Company have been disclosed in Note No. 5 of the Notes to Financial Statements for the year ended March 31,2021, which forms part of this Annual Report. Your Company has not given any guarantee or provided any security during the year under review.
During the financial year ended March 31, 2021, all transactions with the Related Parties as defined under the Act read with Rules framed thereunder, were in the ordinary course of business and at arm''s length basis. Your Company does not have a ''Material Subsidiary'' as defined under Regulation 16(1)(c) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended) (the âListing Regulationsâ).
During the year under review, your Company did not enter into any Related Party Transaction which requires prior approval of the Members of the Company. All Related Party Transactions entered into by your Company had prior approval of the Audit Committee and the Board of Directors, as required under the Listing Regulations. Subsequently, the Audit Committee and the Board have also reviewed the Related Party Transactions on a quarterly basis. During the year under review, there have been no materially significant Related Party Transactions having potential conflict with the interest of the Company.
Since all Related Party Transactions entered into by your Company were in the ordinary course of business and also on an arm''s length basis, therefore, details required to be provided in the prescribed Form AOC - 2 are not applicable to the Company. Necessary disclosures required under the Ind AS 24 have been made in Note No. 35 of the Notes to the Financial Statements for the year ended March 31, 2021.
Investor Education and Protection Fund (IEPF)
In compliance with Sections 124 and 125 of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (âIEPF Rulesâ) as amended from time to time, the Company has deposited a sum of Rs. 17,43,252/- into the specified bank account of the IEPF, Government of India, towards unclaimed / unpaid dividend amount for the financial year ended December 31,2012.
As per the said Rules, the corresponding equity shares in respect of which Dividend remains unclaimed / unpaid for seven consecutive years or more, are required to be transferred to the Demat Account of the IEPF Authority. During the year under review, the Company has transferred 21,027 underlying Equity Shares to the Demat Account of the IEPF Authority, in compliance with the aforesaid Rules.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN END OF THE FINANCIAL YEAR AND THE DATE OF THIS REPORT
Except those disclosed in this Annual Report, there are no material changes and commitments affecting the financial position of the Company between the end of the financial year i.e., March 31, 2021 and the date of this Report.
Consequent upon approval of the Scheme of Amalgamation under Section 233 of the Companies Act, 2013, vide RD Order received in April, 2021 between Coastal Commercial & Exim Limited (Transferor Company) and Bata Properties Limited (Transferee Company), Coastal Commercial & Exim Limited has ceased to be a Subsidiary of BPL and in turn of the Company. The Appointed Date of the said Scheme is April 1,2020. Other than CCEL, during the year no company became or ceased to be a subsidiary, joint venture or associate of the Company. As on the date of this Report, the Company has two wholly owned subsidiaries viz., Bata Properties Limited and Way Finders Brands Limited.
The Annual Reports of these Subsidiaries will be made available for inspection by any Member of the Company at the Registered Office of your Company at 27B, Camac Street, 1st Floor, Kolkata - 700016, West Bengal between 11:00 A.M. and 1:00 P.M. on any working day upto the date of ensuing AGM. The Annual Reports of the aforesaid Subsidiaries for the financial year ended March 31, 2021 shall be provided to any Member of the Company upon receipt of written request. In view of the continuing statutory restrictions on the movement of persons at several places in the Country, Members may also send an advance request at the e-mail id - share.dept@bata.com for an electronic inspection of the aforesaid documents.
The Annual Reports along with the Audited Financial Statements of each of the Subsidiaries of your Company are also available on the website of the Company at www.bata.in
Pursuant to Section 129(3) of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014 (as amended), a statement containing the salient features of Financial Statements of the aforesaid Subsidiaries has been provided in Form AOC-1 which forms part of this Annual Report.
The Audited Consolidated Financial Statements (CFS) of your Company for the financial year ended March 31,2021, prepared in compliance with Ind AS 27 issued by the Institute of Chartered Accountants of India (ICAI) and notified by the Ministry of Corporate Affairs (MCA), Government of India also form part of this Annual Report.
Details of the Subsidiaries are given in the Annual Return in Form No. MGT - 7 as on March 31, 2021. The Annual Return referred to in Section 92(3) of the Act is available on the website of the Company at www.bata.in under the link https://www. bata.in/bataindia/a-29_s-181_c-42/investor-relations.html
Statutory Auditors
In terms of Section 139 of the Act read with the Companies (Audit and Auditors) Rules, 2014 (as amended), M/s. B S R & Co. LLP, Chartered Accountants (ICAI Firm Registration No. 101248W/W-100022) was appointed as the Auditors of the Company for a consecutive period of (five) 5 years from conclusion of the 84th AGM held in the year 2017 until conclusion of the 89th AGM of the Company scheduled to be held in the year 2022.
M/s. B S R & Co. LLP, Chartered Accountants has not informed the Company regarding any condition rendering them ineligible to continue as the Auditors of the Company in terms of the provisions of the Act and the Rules framed thereunder. A copy of the certificate issued by the Peer Review Board (ICAI) as required under Regulation 33 of the Listing Regulations has been submitted by M/s. B S R & Co. LLP, Chartered Accountants to the Company.
The reports given by the Auditors on the Standalone and Consolidated Financial Statements of the Company for the financial year ended March 31, 2021 form part of this Annual Report and there is no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Reports. The Auditors of the Company have not reported any fraud in terms of the second proviso to Section 143(12) of the Act.
In terms of Section 204 of the Act, read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended), your Board at its meeting held on February 10, 2021 appointed Mr. Pawan Kumar Sarawagi (ICSI Membership No. FCS 3381 and C. P No. 4882) of M/s. P Sarawagi & Associates, Company Secretaries, 27, Brabourne Road, Kolkata - 700001, as the Secretarial Auditors of the Company, to conduct the Secretarial Audit for the financial year ended March 31,2021 and to submit Secretarial Audit Report.
The Secretarial Audit Report as received from M/s. P Sarawagi & Associates in the prescribed Form No. MR - 3 is annexed to this Board''s Report and marked as Annexure - II. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.
In compliance with Regulation 34 of the Listing Regulations read with Schedule V thereto, the Corporate Governance Report of your Company for the financial year ended March 31, 2021 is annexed as Annexure - III and forms part of this Annual Report.
SIGNIFICANT AND MATERIAL LITIGATIONS / ORDERS
During the year under review, there were no significant material orders passed by the Regulators / Courts and no litigation was outstanding as on March 31,2021, which would impact the going concern status and future operations of your Company. The details of litigation on tax matters are disclosed in the Auditor''s Report and Financial Statements which form part of this Annual Report. During the year under review, no Corporate Insolvency Resolution application was made or proceeding was initiated, by / against Bata India Limited under the provisions of the Insolvency and Bankruptcy Code, 2016 (as amended). Further, no application / proceeding by / against Bata India Limited under the provisions of the Insolvency and Bankruptcy Code, 2016 (as amended) is pending as on March 31, 2021.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
In compliance with Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 (as amended), a statement containing information on conservation of energy, technology absorption, foreign exchange earnings and outgo of the Company, in the prescribed format, is annexed to this Board''s Report and marked as Annexure - IV.
Your Company has an elaborate system-driven compliance programme in place starting with strict and detailed pre-review for on-boarding procedure in case of a new manufacturing partner in-sourcing and also for an associate manufacturer for our own factories. This includes clearance of documents and a thorough compliance audit prior to approval. All our factories have been audited by SGS and have been certified as fully compliant by them. Our vendors have also been audited by various competent organizations in order to check their level of compliance. The Company has engaged âLexplosionâ for providing support and also ensuring that all statutory compliances across the organization including all the manufacturing units of the Company. The software provides real-time data visibility and a compliance dashboard. Multiple other initiatives are in progress across Occupational Health, Safety & Environment related aspects of the Company''s operations at any given point of time.
Your Company was recognized by Championship Award (under Large Industry Category) under Quality Stream, in the 13th CII National Competitiveness & Cluster Summit 2020 across industry, for the Robust Quality Assurances System in our Manufacturing Units ensuring that all our Products meet the optimal Quality Specifications and the systematic approach towards Zero Defect by implementation of DMAIC process for Continuous Improvement in Product Quality.
To remain competitive, your Company has also focused very strongly on innovation and has successfully introduced âLife Naturalâ antimicrobial for School shoes (Tennis, Naughty Boy, Scout Ballerina and Hawaii Flip-Flop).
Under Sustainable initiatives, your Company implemented âReduce, Recycle & Re-useâ program in addition to Zero Discharge, Rain Harvesting, use of upcycle rubber tire waste in sole production.
Your Company has been working continuously with TBU (Tomas Bata University) based out of Zlin, Czech Republic to improve properties of our rubber compound with better abrasion properties. Apart from such initiatives, your Company has also been using upcycled rubber for rubber soles for sports shoes through its association with âAustin Rubberâ based out of U.S.A. which makes the product not only performance driven, but also eco-friendly.
With promotion of diversity in mind, your Company now employs more than 60% female workforce at its manufacturing unit - Batashatak.
Prioritizing the health and safety of the workforce, except few migrant employees and those having other health issues, 100% of the workforce of your Company across all its manufacturing units have been vaccinated as per eligibility.
RESEARCH AND DEVELOPMENT ACTIVITIES AND ENERGY CONSERVATION
Research and Development activities during the year under review continued to emphasize on creating a pollution-free and a safe work environment. Technological improvement in product development, material development, introduction of new footwear moulds, process improvement, etc. were the key focus areas to improve quality of footwear and productivity in manufacturing. During the year under review, your Company developed Nail Penetration Resistance Safety boot as per BIS norms IS 15298- Part 2: 2016.
An expenditure of Rs. 57.55 Million was incurred on Research and Development (including product development initiatives) during the year under review, as against Rs. 70.66 Million during the financial year 2019-20. Research and Development Centres at Batanagar, Bataganj & Batashatak manufacturing units of the Company, are approved by the Department of Science & Technology, Government of India.
Your Company has adopted a series of energy conservation measures like continuously replacing conventional tubelights with energy efficient LED lights, installation of energy efficient Variable Frequency Drive (VFD) motors in conveyors etc. at its manufacturing units across India. Your Company achieved reduction of CO2 emission at Batanagar Factory by reduction in Briquette Consumption by 7.5 Ton. Your Company shall continue to invest on Research and Development activities and energy saving measures in its manufacturing units in the future as well.
Further information on conservation of energy and technology absorption are annexed to this Report and marked as Annexure - IV.
CORPORATE SOCIAL RESPONSIBILITY
Your Company works on the belief that organizations should exist to serve a social purpose and enhance the lives of people connected through its business. The Company has a CSR Policy in place which aims to ensure that the Company continues to operate its business in an economically, socially and environmentally sustainable manner, while recognizing the interests of all its stakeholders. It takes up CSR programmes which benefit the communities in and around the vicinity of its operational presence, resulting in enhancing the quality of lives of the people in those areas.
Your Company has spent an amount of Rs. 92.22 Million during the financial year 2020-21 as against its 2% obligation amounting to Rs. 87.20 Million. Your Company made significant strides to harness all its resources towards successful execution of the CSR projects across all locations.
Details of composition of CSR Committee and other relevant details have been provided in the Corporate Governance Report. The Annual Report on CSR activities is appended as Annexure - V to this Report.
In order to align the CSR Policy with the amendments in law relating to CSR, based on the recommendation of the CSR Committee, the Board of Directors at its meeting held on February 10, 2021, has revised the CSR Policy and the same was made applicable from March 1,2021. The said policy is appended as Annexure - VI to this Report.
Bata Childrenâs Programme (BCP)
BCP is a global programme which aims to work for the underprivileged children in and around our areas of operations. Under BCP, we have adopted 7 schools in India and work with more than 4,000 children and school authorities. We align the community development initiatives with UN''s Sustainable Development Goals - Gender Equality, Quality Education, Clean Water & Sanitation, Good Health & Well Being and Partnership for Goals.
After the pandemic struck during Feb - Mar 2020, a lockdown was imposed and schools were shut indefinitely. CSR team quickly went into action, reaching out to the schools and gathering data of the children to continue the engagement through online channels. We realized that leveraging the technology would help the children continue their education. However, we faced huge challenges in cases wherein there was only one smartphone available in the house, limited internet connectivity, etc. We remained connected either through Live Online Sessions, Whatsapp Interaction or Phone Calls.
New partnerships -
We entered into new partnerships and customized our programs to suit the requirements of the school teachers and children.
⢠Online Learning Management System - We established new partnership with Buddy4Study India Foundation, which helped us to onboard around 120 children on Online Learning Management System. Children could login to access the academic content on English, Maths and Science. Simultaneously, teachers were engaged to connect with children on regular online classes and interaction through Whatsapp groups. Apart from academics, industry experts were roped in to interact with children on various meaningful workshops such as Mental Health Awareness, Self-Conscious, Mindsets and Habits, etc. Career Counselling sessions were also conducted for the senior students, which were very useful and interactive.
⢠Virtual Sports Programme for the children- During the lockdown, it was also important for students to remain physically active, hence we partnered with Sports Village Foundation (SVF) for online engagement in sports.108 children were onboarded on the leaderboard and engaged in fun fitness sessions. Average weekly student participation remained at 85% and retention rate at 95%. Kids who performed well were given virtual certificates and recognition. By the end of the programme, survey on the overall well-being of the children was conducted with the parents, which showed that the programme helped improve the overall well-being and discipline amongst the children.
Online Science Programme - Our science programme continued with online sessions and distribution of more than 500 science kits to the children and their parents.
Online Library sessions & Teacher Training- Our library classes also turned virtual, with teachers improving the learning and speaking skills of the children through online reading sessions and various interactive activities, benefiting more than 500 children. Our Hole in the Wall engagement partner NIIT Foundation identified relevant topics and trained the teachers Improving Reading Habits and Values, Communication Skills, ASER testing Tools, New Assessment Tools, Online module for children, which helped more than 100 children.
Ensured continued on-ground support - At some of our schools, more than 1500 children were distributed notebooks and stationery, immunity booster kits, nutritious meals, etc.
Adopted different methodologies to keep virtual studies interesting during lockdown- We had to adopt different approach to keep learning process interesting for the children - multimedia short videos were made on various academic topics which assisted more than 500 primary level students to learn difficult topics in a better manner, other methods like storytelling, worksheets, games, etc. were also adopted.
Infrastructure Upgradation- In terms of the infrastructure upgradation, we also completed renovation of washrooms at Bata Shatak BCP school as part of the yearly school plan. At Bataganj BCP school, washrooms for girls were renovated, new drinking water/hand wash structures were constructed and a classroom was renovated. External bodies from the government inaugurated it and appreciated the work done at the schools.
Employee engagement- Celebration of all the special days like Diwali, Children''s Day, Teacher''s Day, Christmas, etc. went virtual, wherein kids demonstrated their skills through engagement sessions and competitions. Important days like World Food Day, Global Hand Washing Day, World Mental Health Day, International Yoga Day, etc. were also celebrated engaging experts from the industry. Our employees also participated whole heartedly in most of the virtual programs and interacted with the children. One of the employees also volunteered to conduct yoga session with the kids on International Yoga Day.
Girl Child Empowerment through Project Nanhi Kali
In partnership with KC Mahindra Education Trust, Bata supports education of underprivileged girl child through project Nanhi Kali. With the closure of schools, the girls faced immense problems to continue education. We already have a skewed child sex ratio of 914 girls to 1,000 boys (Census 2011) and poor female literacy rates of 65% at the national level and 46% in rural India (Annual Economic Survey of India 2018). The school closures caused by the pandemic further widened gender disparities in access to education, having a disproportionately negative impact on girls from disadvantaged families (UNESCO & Plan International 2020).
Due to COVID-19, the Nanhi Kali support centres got shut. During the lockdown period, the teachers remained in constant touch with the girls to ensure their safety and well-being. In this period, the facilitators kept Nanhi Kalis engaged in several activities such as Academic activities, Virtual Summer Camp, National level Drawing Competition, Sports activities, etc. Online assessments were also conducted. The teachers were trained on the launch of the new software for digital literacy.
We procured tablets for the girls and entered into new partnership with Educational Initiatives for their Mindspark software, a self-paced digital learning application. Every girl receives daily academic support with access to in-built tablets with Mindspark''s AI powered personalized learning software, through which the girl can study English, Math and her local language. This software helps the girls learn at their own pace, provides instant feedback for remediation, is based out of student''s active participation and not passively watching or reading content and offers a nuanced understanding of each child''s skill & competency level. Mindspark software has been recognized on various national and international platforms like UNESCO, Stanford University, World Bank, Harvard Business School, etc. The application also enables to see the dashboard to analyse student''s performance, improvement required and tools used. The girls were also given Bata kits, which involved personal clothing, notebooks, stationary, school bag, socks, shoes and a raincoat.
During the year, we continued to support education of 813 girls in the primary classes and renewed sponsorship for 500 girls for their continued education.
COVID-19 Community Interventions
When the pandemic hit the Country, your Company decided to reach out to the underprivileged and frontline workers in & around our areas of operations.1,000 hygiene kits consisting of sanitizer, masks, dental hygiene, personal hygiene, etc., along with 1.10 lac meals/dry ration packets were distributed to the children at BCP schools and communities at large. We strategically reached out to the frontline workers like police, hospitals, etc. in and around our operations and donated 4,000 hygiene kits & 2,000 immunity booster kits through Ayush Ministry. During the lockdown, our factories made masks and face shields. 35,000 masks and 4,000 face shields were donated to the police, ESI hospitals and other essential departments.
The Company also donated Rs. 13.32 lac towards PM Care COVID Relief Fund.
With setting in of the pandemic, Bata globally pledged to donate 1 million pair of footwear to the medical workers and their families as a ''thank you'' gesture for their unflinching support during the difficult times. We started the donation drive in May 2020 and till date donated 1.92 lac pairs of footwear to the medical workers and their families at the government & private hospitals, ASHA & Aaganwadi workers, small clinics, charitable hospitals, police, children, etc. across 30 cities.
We saw excellent employee engagement, with some employees going out of the way to timely deliver the footwear at the hospitals.
We received appreciation letters from renowned government & private hospitals and other institutions for shoe donation drives and engagement with the police and other frontline workers.
The pandemic saw tremendous employee volunteering initiatives. Our employees came forward and partnered with us whole heartedly in driving CSR initiatives in our local communities. From sponsoring meals at old age homes, disinfecting and fumigation drives for farmers to providing essential grocery items at the old age home, orphanages, reaching out to daily wage labours and many more. At Batanagar, employees came together and voluntarily provided around 8400 meals to the families of the daily wage labours, small vendors, etc.
Our employees supported initiatives during the natural disasters as well. During the Vizag gas tragedy, Bata Vizag team came forward to help the families who were affected by the gas leak and identified the most vulnerable families. Addressing basic needs were taken up & food preparation and purchase of water bottles, necessary items were planned by the team collectively. The employees reached out to more than 150 people for support.
During Amphan disaster, we donated more than 1,000 pairs of footwear in the affected areas.
Treatment of children with Clubfoot disease
Our support to Miracle Feet Foundation for Eliminating Clubfoot for treatment of 66 children with Clubfoot disease in UP region got completed. Clubfoot is a congenital birth defect wherein one or both the feet are turned inwards, making it a leading cause of disability in children in the developing world. During the pandemic, we saw a drop out of 8 patients who migrated to other cities or were not traceable.
In addition to the children availing treatment, Bata India''s support has enabled-
⢠Counselling: Program executives provided counselling support to parents telephonically, in-clinic and via home visits. Counselling support during the times of the pandemic became even more integral. After lockdown the parents were telephonically counselled to alleviate their concerns and inform them to take the necessary action (like removal of casts) for patients in various stages of treatment. Once clinics began to open in May 2020, parents were called to resume treatment.
⢠Outreach activities: Community awareness was carried out through ASHAs, cluster meetings, word of mouth, IEC material, patient referrals etc.
⢠Government liasoning: The relationship helped particularly at the time of re-opening the clinics during the pandemic and increase the number of clinic days when the clinics reopened after lockdown. This helped address the backlog of patients and ensured lesser number of patients each day along with social distancing.
⢠Web and mobile application that was developed helped manage all aspects of the program including track patient visits and appointments.
SUPPORT FROM BATA SHOE ORGANIZATION
Your Company continues to receive support from the Holding Company - Bata (BN) B.V., Amsterdam, The Netherlands and also from Bata Shoe Organization (BSO). Your Company also enjoys the benefits of technical research through Global Footwear Services Pte. Ltd., Singapore (GFS). Your Company has renewed the Technical Collaboration Agreement with GFS with effect from January 1, 2021 for a period of ten years. In terms of the said Technical Collaboration Agreement, your Company receives guidance, training of personnel and services from GFS in connection with research & development, marketing, brand development, footwear technology, testing & quality control, store location, layout & design, environment, health & safety, risk & insurance management, etc. Your Company continues to obtain expertise and experience from the personnel of GFS and other BSO group Companies to improve its product range and operational processes throughout the year. In terms of the said renewed Agreement, your Company has paid technical services fee of Rs. 135.08 Million to GFS for the financial year ended March 31, 2021, which is less than 0.80% of the Turnover of your Company.
BOARD OF DIRECTORS, BOARD MEETINGS AND KEY MANAGERIAL PERSONNEL
Composition
Your Company''s Board is duly constituted and is in compliance with the requirements of the Act, the Listing Regulations and provisions of the Articles of Association of the Company. Your Board has been constituted with requisite diversity, wisdom, expertise and experience commensurate to the scale of operations of your Company.
During the year under review, a total of 6 (six) Meetings of the Board of Directors of the Company were held, i.e., on May 6, 2020, May 25, 2020, August 7, 2020, November 10, 2020, November 30, 2020 and February 10, 2021. Details of Board composition and Board Meetings held during the financial year 2020-21 have been provided in the Corporate Governance Report which forms part of this Annual Report.
Changes in Board Composition
Details of changes in the Board Composition during the year under review are as under:
|
Sl. No. |
Name of the Directors |
Designation & Category |
Reasons and date of appointment / re-appointment / resignation / retirement |
|
1. |
Mr. Ram Kumar Gupta (DIN: 01125065) |
Director Finance and Chief Financial Officer (Executive) |
Re-appointed as a Whole-time Director pursuant to Section 196 of the Act at the 87th AGM held on August 6, 2020. |
|
2. |
Mr. Sandeep Kataria (DIN: 05183714) |
Whole-time Director and CEO (Executive) |
Retired by rotation and re-appointed pursuant to Section 152(6) of the Act at the 87th AGM held on August 6, 2020. |
|
3. |
Mr. Rajeev Gopalakrishnan (DIN: 03438046) |
Managing Director |
Re-appointed as the Managing Director, w.e.f. February 23, 2021 for a further period upto September 30, 2021 through Postal Ballot Process, results of which were declared on March 25, 2021. |
|
4. |
Mr. Shaibal Sinha (DIN: 00082504) |
Non-Executive Director |
Appointed as an Additional Director w.e.f. January 1, 2021 to hold office upto the date of the next Annual General Meeting and further appointed as a NonExecutive Non-Independent Director, liable to retire by rotation, w.e.f. March 24, 2021 through Postal Ballot Process, results of which were declared on March 25, 2021. |
Further, Ms. Anjali Bansal (DIN: 00207746) ceased to be an Independent Director of the Company w.e.f. the end of business hours on March 31, 2021 owing to her other preoccupations. The Board places on record its appreciation for her services.
At the Board Meeting held on May 14, 2021, Mr. Gunjan Shah (DIN: 08525366) has been appointed as a Whole-time Director and CEO (KMP) of the Company, effective from June 21,2021.
The Board at its meeting held on June 9, 2021 has appointed Ms. Radha Rajappa (DIN: 08530439) as an Independent Director and Ms. Vidhya Srinivasan (DIN: 06900413) as a Whole-time Director, designated as Director Finance and CFO (KMP) of the Company, both effective from June 9, 2021.
The said appointments are subject to approval of the Members of the Company. Further details in this regard, are given in the Notice convening the 88th AGM of the Company.
The Board at the said meeting also took note that Mr. R. K. Gupta (DIN: 01125065) would retire at end of business hours on June 30, 2021, upon completion of his tenure of services with the Company, from his position as Director Finance and CFO (KMP). The Board also places on record its appreciation for the contributions and services of Mr. Gupta spanning over 35 years in various positions in Bata Group.
Other details pertaining to the Directors, their appointment / cessation during the year under review and their remuneration are given in the Corporate Governance Report annexed hereto and forming part of this Report.
Directors seeking appointment / re-appointment
Mr. Alberto Toni (DIN: 08358691), Non-Executive Non-Independent Director of the Company is liable to retire by rotation at the ensuing AGM and being eligible, has offered himself for re-appointment. Your Board recommends the re-appointment of Mr. Toni as a Director (Non-Executive Non-Independent) of the Company, liable to retire by rotation.
Following directors also seek appointment at the ensuing AGM, in respect of whom Notices under Section 160 have been received by the Company and their appointments are recommended by the Board:
- Ms. Radha Rajappa as an Independent Director.
- Mr. Gunjan Shah as a Whole-time Director and CEO.
- Ms. Vidhya Srinivasan as Director Finance and CFO.
Necessary Resolution(s) alongwith disclosure(s) / further information(s) in respect of the aforesaid directors seeking appointment / re-appointment at the ensuing AGM have been given in the Notice convening the 88th AGM of the Company.
Key Managerial Personnel
As on the date of this Report, Mr. Rajeev Gopalakrishnan (DIN: 03438046), Managing Director, Mr. Sandeep Kataria (DIN: 05183714), Whole-time Director and Chief Executive Officer, Mr. Ram Kumar Gupta (DIN: 01125065), Director Finance and Chief Financial Officer, Ms. Vidhya Srinivasan (DIN: 06900413), Director Finance and Chief Financial Officer and Mr. Nitin Bagaria (ACS-20228), Company Secretary & Compliance Officer are the Key Managerial Personnel (KMP) of your Company.
Based on the recommendation of the Nomination and Remuneration Committee of the Board, Mr. Nitin Bagaria, a qualified Company Secretary, was appointed by the Board of Directors at its meeting held on May 25, 2020 as the Company Secretary & Compliance Officer and KMP of the Company, w.e.f. May 25, 2020.
Based on the recommendation/approval of the Nomination and Remuneration Committee and the Audit Committee of the Board, Ms. Vidhya Srinivasan, a qualified Chartered Accountant, was appointed by the Board of Directors at its meeting held on November 10, 2020 as the Chief Financial Officer and KMP of the Company, w.e.f. January 28, 2021.
Declaration by Independent Directors
The Independent Directors of your Company have submitted requisite declarations that they continue to meet the criteria of Independence as laid down in Section 149(6) of the Act and Regulations 16(1)(b) and 25(8) of the Listing Regulations and there is no change in the status of their Independence and have confirmed that they are not aware of any circumstance or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties.
In terms of Section 150 of the Act and rules framed thereunder, the above Directors have registered themselves with the Indian Institute of Corporate Affairs (IICA) and they are exempted from appearing for the online proficiency self-assessment test. Furthermore, they have also renewed their registration with IICA for applicable tenures. Ms. Rajappa, appointed as an Additional Director (Category: Independent Director), w.e.f. June 9, 2021, is also registered with IICA and has confirmed to comply with the requirements of Rule 6(4) of the Companies (Appointment and Qualifications of Directors) Rules, 2014 (as amended), within the prescribed timeline.
The Board of Directors further confirms that the Independent Directors also meet the criteria of expertise, experience, integrity and proficiency in terms of Rule 8 of the Companies (Accounts) Rules, 2014 (as amended).
Pursuant to various requirements under the Act and the Listing Regulations, the Board of Directors has constituted various committees, such as, Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Risk & Compliance Management Committee and Corporate Social Responsibility Committee. The details of composition, terms of reference, etc., pertaining to these committees are mentioned in the Corporate Governance Report.
COMPLIANCE WITH SECRETARIAL STANDARDS
During the year under review, the Company has duly complied with the applicable provisions of the Revised Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) issued by the Institute of Company Secretaries of India (ICSI).
The Board of Directors of your Company has duly constituted an Audit Committee in compliance with the provisions of Section 177 of the Act, the Rules framed thereunder read with Regulation 18 of the Listing Regulations. The recommendations made by the Audit Committee are accepted by your Board.
Name of the Audit Committee members, number of meetings held during the year under review, terms of reference and other requisite details have been provided in the Corporate Governance Report which forms part of this Annual Report.
NOMINATION AND REMUNERATION POLICY
Your Board has adopted a Remuneration Policy for identification, selection and appointment of Directors, Key Managerial Personnel (KMPs) and Senior Management Personnel (SMPs) of your Company. The Policy provides criteria for fixing remuneration of the Directors, KMPs, SMPs as well as other employees of the Company. The Policy enumerates the powers, roles and responsibilities of the Nomination and Remuneration Committee.
Your Board, on the recommendations of the Nomination and Remuneration Committee, appoints Director(s) of the Company based on his / her eligibility, experience and qualifications and such appointment is approved by the Members of the Company at General Meetings. The Policy also provides for Board Diversity criteria.
During the year under review, the said Policy was amended in order to align the same with the amendments in the Act and the Listing Regulations. The amended Policy is annexed as Annexure - VII and is also uploaded on the website of the Company at www.bata.in and is available at the link https://www.bata.in/0/pdf/Nomination-and-Remuneration-Policy-Revised-2021.pdf
Your Company conducts a Board Evaluation process for the Board of Directors as a whole, Board Committees and also for the Directors individually through self-assessment and peer assessment. The details of Board Evaluation process for the financial year 2020-21 have been provided in the Corporate Governance Report which forms part of this Annual Report.
DISCLOSURES ON REMUNERATION OF DIRECTORS AND EMPLOYEES OF THE COMPANY
Details as required under Section 197(12) of the Act read with Rules 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended), are annexed to this Board''s Report and marked as Annexures - VIII and IX. Further, the Non-Executive Non-Independent Directors of your Company do not accept any sitting fees / commission.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 134 of the Act, the Directors, to the best of their knowledge and belief, hereby confirm that:
(a) in the preparation of the annual accounts, the applicable accounting standards had been followed;
(b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31,2021 and of the loss of the Company for that period;
(c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) they have prepared the annual accounts on a going concern basis;
(e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
(f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.
WHISTLE BLOWER POLICY / VIGIL MECHANISM
In terms of Section 177 of the Act and Rules framed thereunder read with Regulation 22 of the Listing Regulations, your Company has a Whistle Blower Policy / vigil mechanism in place for the Directors and Employees of the Company through which genuine concerns regarding various issues relating to inappropriate functioning of the organization can be raised. A Vigil Mechanism Committee under the Chairmanship of the Audit Committee Chairman is also in place. The Whistle Blower Policy has been uploaded on the website of the Company at www.bata.in and is available at the link https://www.bata.in/0/ pdf/Whistle-Blower-Policy. pdf
The Policy provides access to the Legal Head of the Company and to the Chairman of the Audit Committee. No person has been denied an opportunity to have access to the Vigil Mechanism Committee and the Audit Committee Chairman.
CONFIRMATION OF COMPLIANCE ON PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company is committed to provide a safe and secure environment to its women employees across its functions and other women stakeholders, as they are considered as integral and important part of the organization.
In terms of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (as amended) and Rules framed thereunder, your Company has duly adopted a Policy and has also complied with the provisions relating to the constitution of Internal Complaints Committee (ICC). A summary of the complaints dealt during the financial year ended March 31,2021 in terms of the said Act and Rules framed thereunder has been provided in the Corporate Governance Report which forms part of this Annual Report.
Your Company has been conducting awareness campaign across all its manufacturing units, warehouses, retail stores and office premises to encourage its employees to be more responsible and alert while discharging their duties.
RISK MANAGEMENT AND ADEQUACY OF INTERNAL FINANCIAL CONTROLS
Your Company''s internal financial control ensures that all assets of the Company are properly safeguarded and protected, proper prevention and detection of frauds and errors and all transactions are authorized, recorded and reported appropriately. Your Company operates through definitive Chart of Authorities (COAs) and Standard Operating Procedures (SOPs) in respect of its operations including financial transactions. Such COAs and SOPs are regularly monitored and if required, modified from time to time depending on business requirements.
Your Company has an adequate system of internal financial controls commensurate with its size and scale of operations, procedures and policies, ensuring orderly and efficient conduct of its business, including adherence to the Company''s policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records, and timely preparation of reliable financial information.
Such practice provides reasonable assurance that transactions are recorded as necessary to permit preparation of Financial Statements in accordance with the applicable legislations and that the same are well within the COAs and SOPs, without exception. Your Company also monitors through its Internal Audit Team the requirements of processes in order to prevent or timely detect unauthorized acquisition, use or disposition of the Company''s Assets which could have a material effect on the Financial Statements of the Company. The Internal Audit function is responsible to assist the Audit Committee and Risk & Compliance Management Committee (RCM Committee) on an independent basis with a complete review of the risk assessments and associated management action plans.
Risk Management is embedded in the Company''s operating framework. Your Company believes that risk resilience is key to achieving higher growth. To this effect, there is a robust process in place to identify key risks across the Company and prioritize relevant action plans to mitigate these risks. Risk Management framework is reviewed periodically which includes discussing the management submissions on risks, prioritising key risks and approving action plans to mitigate such risks. An assessment of cyber security has also been carried out in compliance with the requirement of the Listing Regulations and a mitigation plan has been made to counter such risks.
The Internal Audit Report and Risk Inventory Report are reviewed periodically by the Audit Committee and the RCM Committee respectively. The Chief Internal Auditor is a permanent invitee to the Audit Committee Meetings and a member of the RCM Committee. The Audit Committee advises on various risk mitigation exercises on a regular basis. Your Company has been maintaining a separate Internal Audit Team headed by the Chief Internal Auditor appointed by the Audit Committee of your Board.
Further details pertaining to the RCM Committee and Meetings held during the year under review are given in the Corporate Governance Report. Your Board is of the opinion that the Internal Financial Controls, affecting the Financial Statements of your Company are adequate and are operating effectively.
NON-APPLICABILITY OF MAINTENANCE OF COST RECORDS
The Central Government has not prescribed the maintenance of cost records under Section 148(1) of the Act and Rules framed thereunder with respect to the Company''s nature of business.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Industry structure and developments
India is the second-largest producer of footwear and third-largest footwear consumer globally. Economists predicted India to become a favourable market for fashion retailers on the back of a large young adult consumer base and increasing disposable
income. Luxury retailing is also gaining importance in India. This includes fragrances, gourmet retailing, accessories and jewellery among many others. This momentum of the footwear market in India, on the back of growing demand for trendy, fancy and comfortable footwear among the youth of the Country, however, has been disturbed by the massive shock of the coronavirus pandemic and the shutdown measures to contain it.
Global economy has plunged by a severe contraction and Global growth is projected at 6% in 2021, moderating to 4.4% in 2022. Except stores selling essential commodities, most other stores were shut down across the Country for nearly two months in the year under review and were operating under checkered conditions for the rest of the year. Even today, partial lockdowns or restrictive conditions continue to impact retail store operations. The pandemic also led to non-reopening of Schools which impacted sales of school shoes.
Even with the aggressive Covid-vaccination drives, the consumer sentiment would take some time to revive. Though there is a shift of focus to e-commerce, it currently accounts for more than 4% of the Country''s overall food and grocery, fashion, consumer electronics retail trade.
The industry is witnessing an upward revision and anticipates a vaccine-powered recovery in the second half of 2021-22, however, there may remain a subdued economic activity in non-essential retail business. High uncertainty surrounds this outlook, due to the pandemic, to the speed of vaccine-powered normalization and the evolution of financial conditions.
Under the âNew Normalâ as India Inc. shifted to âWork From Homeâ and with socialising becoming a rare occasion, shoppers are purchasing casual and comfortable open footwear.
The silver lining, however, is the increasing awareness of health, thereby driving the demand for sports footwear. The retail footwear business is expected to improve gradually as economic activity is improving.
Opportunities and Threats
The retail sector in India is emerging as one of the largest sectors in the economy. It contributes 10% to GDP and 8% to employment. The total market size of Indian retail industry stood at US$ 950 billion in 2018 and is forecast to reach US$ 1,200 billion by 2021 and US$ 1,750 billion by 2026. India is poised to become a favourable market for fashion retailers given the following growth drivers for retail:
1. Favourable demographics
2. Rise in income and purchasing power
3. Change in consumer mindset
4. Brand consciousness
5. Easy consumer credit and increase in quality products
India is the fifth largest preferred retail destination globally. The sector is experiencing exponential growth, with retail development taking place not just in major cities and metros, but also in tier II and tier III cities.
India ranked 73rd in the United Nations Conference on Trade and Development''s Business-to-Consumer (B2C) E-commerce Index 2019. Online penetration of retail is expected to reach 10.7% by 2024 versus 4.7% in 2019. The government''s focus to improve digital infrastructure in Tier 2 and Tier 3 markets would be favourable to the sector.
To resume the growth path, your Company is taking necessary steps such as expanding its e-commerce footprint making deliveries in over 1100 cities, rolling out its omni-channel home delivery across 1200 stores and giving customers the option to shop from homes via WhatsApp chat with our neighbourhood stores. Your Company is continuously working on various cost-optimisation measures including rental renegotiation, closure of unviable stores and digitalisation drive across the organization, etc., to eliminate redundancies. Your Company continues to focus on stylish, comfortable and durable quality products so as to be ahead of competition.
Your Company is also working aggressively on increasing its reach to customers in Tier 3/4/5 cities through opening of franchise stores. Due to strong legacy and Brand recall, your Company has been witnessing increasing interest for opening of franchise stores.
Your Company also has opportunities in the I&D business, as Bata is the only player which is present across categories and price points. However, the competition continues to grow with unorganized sector moving into organized space.
âBata Ladiesâ and âComfitâ categories maintained good momentum. With changing lifestyle and focus on personal health, your
Company is optimistic about its brand âPowerâ which has seen good demand uptake in the last year. Another opportunity in the current scenario is the preference of consumers towards more âcomfortableâ rather high fashion footwear. Your Company is uniquely placed to take advantage of this trend with its aspirational brand image especially in the Comfortable and Trusted footwear arena, wide range of recognized brands, upgraded online experience and unparalleled retail footprint.
Key Focus Areas
Marketing and Campaigns
As India experienced one of the strictest lockdowns, we promptly ensured and facilitated a seamless transition to Work-from-Home. As a responsible brand we adopted a humane approach and continued to motivate our customers, employees, stakeholders and society at large to stay homebound and follow the guidelines mandated by the government through committed campaigns such as #ParkYourShoes and #StayActiveWithPower that highlighted our spirit of resilience and empathy.
Bata''s agile marketing strategy continued to evolve and with offices being shut across the Country as India Inc. started working from home, we started witnessing more traction for casual and active wear. Accordingly, we rolled out especially curated collections like Work From Home range, Easy Wash collection, and Fitness at Home range. With consumers shopping for more casuals and sneakers, we brought in younger brands like North Star, Hush Puppies, Red Label and Power to the front in our stores and created new zones such as Sneaker Studio and Neo Casuals. We also enhanced our products offerings to address the changed consumer needs. We designed, developed and marketed a range of antiviral and antibacterial masks under Power, Northstar, BBG & HP brands, which was very well-received by the customers.
During the festive season, we launched our new campaign ''Kick Out 2020'' - along with our new collection, ''Ready Again''. We also launched a SneakerFest campaign that helped increase awareness & sales of our key brands under the sneakers'' portfolio. Both these campaigns resonated well with consumers, as they helped in uplifting overall consumer sentiment, footfalls and sales. Keeping in mind our millennial and Gen-Z customer base, we also on-boarded Kartik Aaryan, India''s heartthrob and fashion icon as the new brand ambassador. With gradual opening of the market and improving consumer sentiments in the beginning of 2021, Bata launched its new campaign âRelaxed Work Wearâ featuring Kartik Aaryan and showcasing the most comfortable footwear both semi formals and formals that our customers would need once they move back to their work places. To further strengthen Bata''s fashion credentials, we continued our association with âLakme Fashion weekâ during which the Brand Marie Claire was relaunched and the designers talked about their love for the Bata Brand and how surprised they were to see Bata''s new avatar.
Our digital marketing content has always tried to touch a chord with the customers with focus on relevant content along their digital journey. We further upped the ante this year with strong marketing on the marketplaces like Amazon, Myntra and Flipkart along with our own channel Bata.in. This helped us connect with new audiences on the platforms and reach further into Tier 2 and Tier 3 towns.
We understand the importance of innovation in designing and creating our Collections. The successful implementation of new ideas and technologies is crucial to our business and gives Bata a competitive advantage over other brands in the marketplace.
In 2020, we have seen the growth of home wear footwear and specific products developed ad hoc to address consumer needs during the pandemic. Volume flip flops and eva fabricated articles led the way and clocked significant jump in pairs and turnover. The innovation rate grew at its highest ever - 17.3% - driven by comfort and healthy technologies like Cushion Soft, Ortholite & Life Natural antibacterial. Our Design and Development efforts were focused on Athleisure & Comfort Casual Collections across various brands - Power, North star, Bata and Comfit in order to address the vast changing consumer needs in this segment.
We designed, developed and launched a very successful collection of antiviral and antibacterial Masks under Power, Northstar, BBG & HP brands, which sold over 200,000 units throughout the year - June 2020 to March 2021.
An immense effort lead to our widest Product Cost saving initiative - Refuel - with Key initiatives, such as Material Standardization, Material Localization, Material Substitution, Product Re engineering and Process Optimization. All Initiatives have been validated by Consumers, Lab tests and Wear Tests.
The lockdowns posed a huge challenge for the entire retail industry and also for BATA and innovation was the need of the hour. Based on the understanding of the new consumer behaviour, we quickly launched multiple new business models: âBata
Chat Shopâ - where a customer can do a call/chat with his nearby neighbourhood store manager over WhatsApp and then get the product home delivered within few hours; âBata Store-on-Wheelsâ - where we set up mobile kiosks inside societies / residential complexes and took the store at the customers'' doorstep. These initiatives saw a great traction and received very positive feedback from our customers.
Customer Centricity has always been at the forefront for Bata India. There is a dedicated customer service team to ensure that customers don''t face any inconvenience and their concerns are addressed in a time-bound and effective way. During the year under review, the focus was primarily to pivot the Customer Service function keeping in mind the new consumer buying behaviour & the subsequent post sales expectations. This involved defining the end-to-end consumer journeys and identifying the key pillars of change. Multiple new initiatives were rolled out - we implemented a new CRM Ticketing tool (FreshWorks) which is integrated with multiple other internal systems to automate Customer Service operations, implementation of refund automation solutions, new Contact Center partner with better technology solutions.
Given the pandemic and consequent lockdown and unlock situation, Bata Club strategy had to be pivoted. Dedicated campaigns were run to inform and invite Club members to Bata Stores post unlock: we highlighted our 20 safety checklist followed at stores, and gave the members special bonus points & offers to drive repeat. Nearby store locator journeys (along with Store contact number) were configured on WhatsApp to make it easier for a consumer to locate their nearby open stores. Another key objective was to accelerate adoption of our own e-shop (bata.in) among Club members - profile enrichment drive & email campaigns were scaled up significantly to increase awareness and drive traffic to bata.in from existing Club member base.
Segment wise or product wise performance
Your Company operates in Footwear & Accessories Segment only and performances of major business categories and key brands of your Company during the financial year ended March 31, 2021 are highlighted below:
Retail Business
India experienced one of the strictest Lockdown across the world and all our stores, factories & offices were closed from March end till May 2020. In line with our ethos and values, our teams on ground displayed tremendous agility, ingenuity, grit, and resilience which helped us chart out the road for recovery. Your company went through a phased strategy of survive, revive, revitalize & thrive in financial year under review in order to face the challenges of the pandemic and come out of it.
We conducted extensive training for our store teams and prepared a detailed 27-point safety SOP for our store openings, our store teams worked relentlessly to ensure Bata stores were one of the first to reopen post the lockdown & it also ensured that we had minimal impact on our store operations post end of lock-down. We also extended helping hand of our store teams to local communities & contributed towards rehabilitation activities.
We increased digitalization of our internal communication channel & conducted multiple calls & townhalls to keep the teams on ground motivated & connected during lockdown & post lockdown period & also scaled up ''I Grow'', a digital learning platform for retail team which had over 2 lac hours of learning.
We also focused on controlling our costs related to retail store expenses and generated more than Rs. 110 crores of savings by negotiating rents across 1000 stores & closing 75 unviable stores.
Your Company was quick to develop new business channels in line with changing consumer behavior. For Digital Adopters and Digital Novices, we rolled out innovative solutions like Bata ChatShop, a WhatsApp shopping, Bata Store on Wheels, and Bata Home Delivery, which enabled easier & safe shopping experience for our customers even as the pandemic raged on. The sales though digitally enabled channels grew 3 times in the last one year, contributing 15% of our total sales which is considered one of the best in the industry. Today 60% of marketplaces orders are delivered via our stores, powered by omnichannel technologies.
Your Company enabled multiple tech initiatives at the store level such as Contact-less payments, Find a Pair, Find my size, QR code scanning, Bata Loyalty Program, store updates on Google etc., which improved the overall customer experience & safety.
With surging numbers of Covid cases in metros and prolonged lockdowns, there was an emergence of market for branded products in tier 3-5 cities. We quickly tapped into the opportunity and expanded our retail network through Franchise operations.
We opened a total of 64 franchise stores after the pandemic struck, taking the total to 82 new Red 2.0 stores in the year. We also started our association with 3 Departmental Store Chains & started Bata Shop in Shops at 38 location in order to attract incremental customer base of them.
Digital Multi-Channel Business
E-commerce business maintained steady growth during the year under review. We sold more than 2.4 Million pairs of footwear through online channels and achieved a turnover of Rs. 1522 Million. Launch of Endless Aisle, that connected retail store inventory to online website with technical integration, has multiplied the business potential by manifold. Bata India now ships more than 96% of orders received from Bata.in through its stores. Tools like WMS & Marketplace integration were put in place to scale up our marketplace operations. Advancing to Auto Replenishment lets the online stocks replenished for e-commerce the way retail stores are replenished with inventory on a regular basis.
In addition, Launch of Bata Home Delivery Services in over 1200 stores allows store staff to place orders on customer''s behalf if the article of their choice is not available in the store and retain customers, who otherwise would have walked out of our stores due to non-availability of size and color.
B2B business has been steady on Amazon and Flipkart. Focus has been on improving secondary sales on these platforms which in turn improves primary business. Rigorous marketing campaigns including Cost per Click (CPC) and Cost per Million Impressions (CPM) were launched while diligently participating in brand specific and category specific events for increased Brand visibility. Tech integrations like Return and Exchange Functionality improved customer experience on Bata.in, thus reducing customer complaints. Thus, your Company has also focused on Technology upgradation to make internal processes robust and strengthen the serviceability.
Hush Puppies
In Hush Puppies, we continued our approach of communicating about technology, with introduction of new product technologies like Bounce Max, Bounce and Bounce Plus. Given the pandemic spanning through the year, we focused on essentials in addition to consistent communication around bounce technology, with focus on reactivating brand social media assets. Campaigns were promoted through various touch points covering Retail, activations, digital and PR.
Hush Puppies has been the go-to brand for formal wear but with the new bounce technology collection, it introduced a large variety in causal styles and a vibrant range of colors. The collection is a perfect addition to wardrobe with a variety of styles that can be paired up for modern work attires to on-the-go ensembles to trendy weekend looks.
The new range for men and women comes with smart sneakers, pumps and ballerinas in smooth-grain leather, knitted fabrics and soft colorful suede for men and women. The collection boasts of athletic-inspired comfort combined with elevated tailored styling that allows for more wearing occasions than an average shoe choice.
Comfort has been Hush Puppies'' DNA and with Bounce Plus, the brand is taking the comfort quotient a notch higher. For customers looking for footwear having performance features of today, Bounce Plus collection brings casual styles infused with technology to keep up with consumers'' hustling lifestyle.
American shoe brand Naturalizer has been a pioneer in designing shoes specifically suited to the contours of women''s feet since 1927. After successfully launching its exclusive stores in multiple international cities like New York, Chicago, Toronto & Dubai, Naturalizer has launched its flagship store in India at DLF Promenade Mall, New Delhi and a second store at DLF Avenue, Saket. Our further expansion of EBO''s took a pause given the pandemic situation. Designed in New York and adorned by working women, ''the shoe with the beautiful fit'' has been retailing exclusively in India at 50 Bata stores across 4 cities for almost a decade.
Our Concept stores in India have been launched basis the New York, 5th Avenue store of the brand, carefully cultivated to reflect brand''s heritage while incorporating modern elements to offer the ultimate brand experience designed specifically with customers in mind. The objective behind this store launch is to reach the loyal customer base while creating the ultimate destination for discovery through a strong retail showcase and experiential marketing.
The Naturalizer collection serves well to the modern-day women for all day comfort as the patented N5 comfort technology with unmatched ease. The collection flaunts countless styles ranging from pumps, mules, chunky soles and heels. The brand''s design philosophy resonates with modern aesthetics combined with textures from their own archives and finds ways to incorporate them in the new collections.
Your Company''s non-retail business division comprises of Multi-Brand Outlets, Key Accounts, industrial and institutional business divisions and exports. We improved our Customer Service by streamlining supply chain, enhanced Quality of products across categories and trained the team to handle market challenges. Our focus on few Categories gave us very good traction with Consumer inspite of COVID-19. The business revenue bounced back post Covid and started growing in last 2 quarters of the financial year under review. Bata availability in MBO is now in 800 towns and about 400 enterprises provide Bata shoes to their Employee/Customers through our B2B Division.
The current economic state, challenging retail environment and new waves of pandemic pose threats to businesses across all sectors. The Country wide lockdowns and the âNew Normalâ has lead to fundamental shift in customer behaviour and retail businesses in particular. Your Company is focused on âSurvive, Revive, Revitalise and Thriveâ strategy and is constantly monitoring the store level performance, driving sales through online channels and cost optimisation across all functions. Your Company is strategically positioned to harness the present challenges, given the strength of its Brand, innovation capabilities, retail foothold and growing online presence in footwear and accessories category.
Risks and Concerns and Contingent Liabilities
Your Company acknowledges the fact that competition from both domestic and international players is increasing every passing day. In addition to increasing competition, the changing customer''s behaviour and impact of online marketing initiatives have an effect on your Company''s performance since your Company has a huge network of retail stores Pan India. With the opportunity for employment, gradually increasing people / talent retention is considered as a challenge. Your Company also realizes that modernization of I.T systems along with having suitable protection from risk of loss / theft of data is one of the major areas of concern globally. Your Company monitors its major risks and concerns at regular intervals. Appropriate steps are taken in consultation with all concerned including the RCM Committee and the Audit Committee of the Board to identify and mitigate such risks.
During the normal course of its business operations, your Company has been subjected to litigations in connection with or incidental thereto. These litigations include civil cases, excise and customs related cases, etc. filed by and against the Company. These cases are being pursued with due importance and in consultation with legal experts in respective areas. Your Board believes that the outcome of these cases is unlikely to cause a materially adverse effect on the Company''s profitability or business performance. Your Company has a Contingent Liability of Rs. 411.65 Million as on March 31, 2021 as compared to Rs. 412.36 Million as on March 31, 2020. Attention is drawn to the explanations mentioned in Note No. 30 of the Notes to Financial Statements for the financial year ended March 31, 2021. In view of the present status and based on legal advice obtained from time to time, your Board is of the opinion that no provision is required to be made against these Contingent Liabilities.
Internal control systems and their adequacy
A separate paragraph on internal control systems and their adequacy has been provided elsewhere in the Board''s Report. Discussion on financial performance
The operations and consequential financial performance of the Company remained impacted throughout the year under review due to the Covid-19 pandemic.
The Earnings per Share (EPS-Basic and Diluted) of your Company for the financial year ended March 31, 2021 was at (Rs. 7.02) as compared to the (EPS-Basic and Diluted) for the previous financial year ended March 31, 2020 at Rs. 25.44. Your Company recorded EBITDA margin of 9.17% during the financial year under review as compared to 27.17% during the financial year 2019-20.
Your Company does not have any Bank Borrowings and the entire capital expenditure has been funded through internal sources.
The Capital Expenditure incurred during the year under review amounted to Rs 343.18 Million as compared to Rs. 899.23 Million in the previous year.
Details of significant changes in key financial ratios alongwith explanation
In compliance with the requirement of the Listing Regulations, the key financial ratios of the Company along with explanation
for significant changes (i.e., for change of 25% or more as compared to the immediately previous financial year will be termed as ''significant changes''), has been provided hereunder:
|
|Sl. No. |
Particulars |
2020-21 |
2019-20 |
|
(i) |
Debtors to Sales (in days) |
17 |
7 |
|
(ii) |
Inventory to Turnover Ratio (in months) |
2.81 |
3.43 |
|
(iii) |
Interest Coverage Ratio |
(0.70) |
4.54 |
|
(iv) |
Current ratio |
2.61 |
2.50 |
|
(v) |
Debt Equity Ratio1 |
- |
- |
|
(vi) |
Operating Profit Margin (%) |
(4.25) |
17.49 |
|
(vii) |
Net Profit Margin (%) |
(5.29) |
10.64 |
|
(viii) |
Return on Net worth (%) |
(5.13) |
17.13 |
* There is no borrowing in the Company. However, Finance cost includes interest expenses accounted for various deposits in accordance with Ind AS 109, Financial Instruments and interest expense accounted on various lease contracts in accordance with Ind AS 116, Leases.
¦ The significant changes over previous year across all ratios is due to lower sales, slower realisations, stores remaining closed due to lockdowns and other economic disruptions caused by the Covid-19 pandemic.
The other financial ratios of the Company relating to previous 10 years has been provided in other part of Annual Report 2020-21.
Material developments in human resource / industrial relations front, including number of people employed
Your Company has been continuously working to improve human resources skills, competencies and capabilities within the Company, which are critical to achieve desired results in line with our strategic business ambitions. Some key initiatives that have been taken during the Financial Year 2020-21 in this direction are summarized below:
Employee Engagement
- Employee Recognition - This year considering the pandemic, various initiatives on employee recognition were undertaken:
¦ COVID Heroes - A new initiative to recognize exemplary work in the management and support of COVID programs was launched called COVID Heroes Awards, to recognize employees who went over and above the call of the duty during the pandemic lockdown - some of the recognitions centred around employees who supported the organization in their respective areas or gave back to the society in their personal capacity, other nominations were around work done to support communities in & around our factories e.g. face masks and shields making, which were donated to police and hospital establishments across the Country. In addition, these initiatives by your Company and individual employees were also recognized on Social Media platforms like LinkedIn and under our Global Award Programs.
¦ Bata Lions - The I&D R&R Programme - We launched a new I&D Business Reward & Recognition Programme for Season 1- 2021 and for the first time extended it cross functionally to now include in addition to Sales & Merchandising our Finance, Marketing, Sourcing, HR and other functions. This has helped align cross functions on one common business strategy and agenda ahead.
- Virtual Town Halls, Events and Celebrations - During the year under review, we used technology driven platforms to enhance our employee engagements through virtual townhalls and all our celebrations through the course of the year under review. These virtual townhall sessions were conducted frequently wherein the Pan India employees connected virtually with the top leadership and got clarity on the current business and people strategies, new launches, and Q&A sessions etc. Our engagements via a virtual Diwali party saw our employees and their family members participate in various competitions. Days like Republic Day, Independence Day, etc., were also celebrated virtually with employees enthusiastically participating in all such rollouts through the year. Also, our focus on fitness increased and for this we organized online Fitness session. These initiatives and regular meet and greet programs virtually helped us keep our employee base connected and engaged with our organization through the pandemic and lockdown situation.
⢠COVID-19 Management - With the setting in of the COVID pandemic, the administration team ensured safety of all employees, helped employees & their families with stay, travel & essentials wherever required. SOPs were made on COVID management and effectively implemented across offices, plants, depots, stores, etc. Teams were trained on COVID guidelines and ensured effective office re-opening as per the government guidelines. Regular on-going communication to keep our employees abreast with MHA guidelines and company advisories were shared through People Connect Pan India.
⢠Hot Desking concept - In line with our philosophy of creating an open and welcoming work environment in line with changing business and environmental paradigms, we initiated the hot-desking concept for 100 employees and implemented rostering of employees, partnering fully with GOI / MHA - State and Central Government guidelines in a timely manner.
Training, Learning & Development
⢠Transformation of Retail Training Academy (RTA) - During the year under review, we undertook a deep dive into our BATA competency model and also worked extensively to transform and expand our Retail Training Academy (RTA) into Bata Training Academy (BTA). This initiative helped us widen our training vertical to not only retail but also to cover our Institutional & Distribution Business, Manufacturing, and other specialist training needs through the organization. In this endeavor, we have partnered with a specialist organization to provide holistic, multidimensional, technology driven and future Retail ready competency based sales and operation trainings to our DM and above population through a Train the Trainer approach, who then will lead these training programs cascade with our field workforce ahead through the course of the next few years.
⢠Online Learning Programs - iGROW platform- During lockdown, our commitment towards the employee development continued and we shifted our focus to online learning platform iGROW. We expanded our online learning catalog of courses from 50 to 100 and focused on self-paced learning. In addition to this, we also made our employees participate through various virtual events, seminars and online learnings.
⢠I&D Curated Program offerings - In last one year, we have created special courses specifically designed keeping the nuances of the I&D business. These courses are titled TCT- Techno Commercial Training which covers not just the details of Bata Products but also how our Products stand in comparison with competitor brands, thereby enabling our Sales Team to perfect their sales pitch.
Benefits Programs
⢠Medical Insurance - We ensured that all our employees are covered under Medical Insurance benefit for COVID treatment. This coverage would help protect our employees through medical emergencies in the future ahead.
Technology Enabled - Digitization
⢠Bata Vibe - We launched HRMS digital portal - Bata Vibe, covering all managerial employees, enabling to connect virtually. The portal covers organization announcements, training & development initiatives, benefits & claims amongst various others interactive features which ease the life of the employees during their career with us. There is a continuous effort to add online approval features MEMO/LTA and integrate the system with PF application, wherein employees can view or download their PF accumulation balance/nominee details/KYC. 1
⢠Talent Assessment - In-depth talent mapping using the 9 grid Talent management model was completed for retail leading to career expansions, territory re-alignments and also structured development feedback wherein needed.
⢠Leadership Development - We introduced 360 degree feedback for Top Management as a development tool to identify development areas and IDPs were created. Succession planning process for the top leaders were also completed with our global teams.
⢠Online Assessment Centre Model for Retail - We have collaborated with a market leader which would help Career Laddering in the Retail Stores through Bata competency driven assessment centers. It is a six level structured career path with defined scale of enhanced competency to meet the business goals.
Policy frameworks
⢠Keeping in mind the new way of working and virtual scenario, we introduced new policy frameworks such as Work from Home and Social Media policies/guidelines. Our POSH policy got amended keeping in view of the virtual prevention of sexual harassment guidelines as per GOI.
Diversity & Inclusion
⢠We have a structured D&I program and are rigorously working towards hiring a diverse talent pool in the Company. We have made conscious efforts through various collaborations with organizations for hiring diverse talent across various levels in our organization through all functions and regions.
⢠During the year under review, our WForce initiatives went virtual. Throughout the year, we invited external speakers and conducted virtual programs with the employees on ''Mental Health & Well Being'', ''Tax Awareness'' and celebrated ''International Women''s Day'' covering both men and women workforce for these sessions to listen to best practices and also engage through Q&A sessions thereafter.
⢠Your Company is committed to provide a work environment free from harassment of any kind and in particular, a work environment that has zero tolerance for sexual harassment. We conducted ''Prevention of Sexual Harassment at Workplace (POSH)'' virtual awareness sessions for all employees at a Pan India level.
Industry Recognition
The HR team of your Company participated in various external awards platform and was recognized for the following:
¦ CII- 13th National Competitiveness & cluster Summit 2020: Winner âBest HR Practices- Championship Award Large Streamâ
¦ CII- 4th National HR Circle Competition 2020: 2nd Place winner âBusiness Continuity w.r.t. People Management amidst COVID situationâ
Your Company believes in developing long term relationships with all our employees on an ongoing basis. Industrial relations at all the manufacturing units of your Company have been harmonious and peaceful with active involvement of the employees in the collective bargaining process. Your Company has also encouraged wholehearted participation of the employees and union in improving productivity as well as quality of its products.
As on March 31, 2021, there were 4454 permanent employees on the rolls of your Company.
There are certain Statements which have been made in the Management Discussion and Analysis Report describing the estimates, expectations or predictions, may be read as ''forward-looking statements'' within the meaning of applicable laws and regulations. The actual results may differ materially from those expressed or implied. The important factors that would make a difference to the Company''s operations include demand-supply conditions, raw material prices, changes in Government Policies, Governing Laws, Tax regimes, global economic developments and other factors such as litigation and labour negotiations.
BUSINESS RESPONSIBILITY REPORT (BRR)
In compliance with Regulation 34(2)(f) of the Listing Regulations read with the SEBI Circular No. CIR/CFD/CMD/10/2015 dated November 4, 2015, your Company has prepared a BRR in the prescribed format for the financial year ended March 31, 2021 describing initiatives undertaken by it from an environmental, social and governance perspective, which is annexed to the Board''s Report and marked as Annexure - X. The BRR has been uploaded on the website of the Company at www.bata. in and is available at the https://www.bata.in/bataindia/a-29_s-181_c-42/investor-relations.html
Annexures forming part of this Report
The Annexures referred to in this Report and other information which are required to be disclosed are annexed herewith and form part of this Report:
|
Annexure |
Particulars |
|
I |
Dividend Distribution Policy |
|
II |
Secretarial Audit Report |
|
III |
Corporate Governance Report |
|
IV |
Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo |
|
V & VI |
Annual Report on CSR activities and CSR Policy |
|
VII |
Nomination and Remuneration Policy |
|
VIII & IX |
Disclosures on remuneration of directors and employees of the Company |
|
X |
Business Responsibility Report |
Your Board expresses its deep sense of gratitude towards the customers for their continuous patronage and remains committed to serving them by delivering more style and comfort at every step. Your Board also takes this opportunity to acknowledge and appreciate the support rendered by all its business partners, suppliers, vendors, associates and dealers as well as the regulatory authorities of the Central and State Governments in India and looks forward to their continued assistance in future.
Your Board is deeply grateful to our investors and shareholders for the confidence and faith that has always been reposed in us. Your Board is also thankful to the Bata Shoe Organization (BSO) for their ongoing support and guidance.
Your Board acknowledges, appreciates and values the unwavering efforts by the employees, workmen and staff including the Management headed by the Executive Directors who have all worked together as a team despite the pandemic and overall challenging business environment. Your Board also appreciates the Independent Directors and the Non-Executive Directors of the Company for their contribution by way of strategic guidance, sharing of knowledge, experience and wisdom, which helps your Company to take the right decisions in achieving its business goals.
Your Board also wishes to place on record their deep appreciation to the Company''s employees, suppliers, customers and Government authorities for their selfless efforts in helping your Company to operate whenever permissible during the pandemic. The ownership and responsiveness shown by all the stakeholders is unparalleled and is a testimony of the spirit of this great organization.
For and on behalf of the Board of DirectorsRajeev Gopalakrishnan Sandeep Kataria
Place : Gurugram Managing Director Whole-time Director and CEO
Date : June 9, 2021 DIN: 03438046 DIN: 05183714
Introduction of Technology enablement talent assessment tool for the stores - We tied up with an expert partner for tech-enabled talent acquisition tool to standardize employment assessment process for store hiring. The tool will help us to align our Pan India store hiring as per Bata competency model. It will also help to improve the quality of hiring at store level.
Career Management
⢠Internal growth - During the year under review, we focused on internal growth through various programs like Step-Up, Internal Job Positions and Internal Movements. We extended our Step-Up program to our Institution and Distribution vertical along with Retail and completed 3 batches to create ready pipelines in these critical functions. In-depth department structures were studied for critical business like Omni Channel and basis the gap analysis, internal re-alignment of the roles and internal movements were completed to support our business growth engines ahead in 2021 and beyond.
Mar 31, 2019
BOARD'S REPORT TO THE MEMBERS
Your Directors are pleased to present the 86th Annual Report covering the operational and financial performance of your Company along with the Audited Financial Statements for the financial year ended March 31, 2019.
FINANCIAL HIGHLIGHTS
|
 |
 |
(Rs. in Million) |
|
Particulars |
Financial Year ended on March 31, 2019 |
Financial Year ended on March 31, 2018 |
|
 |
(Audited) |
(Audited) |
|
Revenue from operations |
29,284.44 |
26,363.18 |
|
Other Income |
685.43 |
508.44 |
|
Total |
29,969.87 |
26,871.62 |
|
Profit / (Loss) before Taxation |
4,782.65 |
3,400.14 |
|
Provision for Taxation |
1,486.05 |
1,164.36 |
|
Net Profit |
3,296.60 |
2,235.78 |
|
Other Comprehensive Income / (Loss) (net of tax) |
1.38 |
(160.03) |
|
Total Comprehensive Income |
3,297.98 |
2,075.75 |
Your Company has prepared the Financial Statements for the financial year ended March 31, 2019 in terms of Sections 129, 133 and Schedule II to the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.
During the financial year ended March 31, 2019, your Company recorded a turnover of Rs. 29,284.44 Million as compared to the turnover of Rs. 26,363.18 Million recorded during the previous financial year ended March 31, 2018. Revenue from operations for the year ended March 31, 2019 has increased by 11% over the corresponding period last year. The Net Profit of your Company for the financial year ended March 31, 2019 stood at Rs. 3,296.60 Million as against the Net Profit of Rs. 2,235.78 Million for the financial year ended March 31, 2018. The Profit before Tax for the financial year ended March 31, 2019 reflects a growth of 41 % over the corresponding Profit for the financial year ended March 31, 2018.
On a consolidated basis, your Company recorded a turnover of Rs. 29,311.03 Million during the financial year ended March 31, 2019 and achieved consolidated Net Profit of Rs. 3,289.94 Million for the said financial year.
Your Company consolidated its position as the leading footwear company in India in the year under review delivering double digit sales growth and improving its profitability significantly. This has been achieved by rigorously executing our "Sweeping Angela Off her Feet" strategy through the year to help the brand emerge as more contemporary and vivacious. We made significant headway this year across its key pillars of being commercially aggressive, continuously upgrading our collections and reaching out to consumers everywhere while keeping costs in check.
This year, we significantly stepped up our marketing presence reaching out to recruit new consumers as well as strengthen our bond with our loyal consumer base. This was achieved with the use of a highly visible consumer insight based marketing campaign built around our brand ambassadors. Leveraging our excellent retail assets, traditional media channels as well new age digital media it helped us to connect with more consumers and reinforce the "Surprises" that awaited them in a Bata store. It has reflected well in our brand equity strengthening as well as footfall increase in stores. This initiative combined with new & contemporary collections in Bata Casuals, Bata Red Label, 9to9 ladies range as well as Power & North Star have helped us connect and build the brand among the youth of the country.
After successfully testing the contemporary and clutter free "Red" Store design last year, we rolled out the design to over 100 stores across the country this year. These stores exude a premium feel helping us upgrade our imagery as well as our merchandise. Your company intends to further pick up speed to take this new store design to a majority of our stores in the next few years.
To help us to reach out to more of India, your company also stepped up the focus on entering new towns through Franchise stores this year. We have received very enthusiastic response from current as well as new Franchise partners to open stores in new towns, helping us take Bata to more than 45 new towns in this year with many more in the pipeline. Another key pillar of reaching more consumers has been our digital push with large e-Commerce partners as well as improving the assortment and speed of our own website www.bata.in. Through Omni-Channel technology deployment we have also been able to leverage our store inventory for fulfillment as well as quick delivery!
Your company's brand popularity and consumer initiatives were recognized as we were conferred the "IMAGES Most Admired Footwear Brand of the Year 2019" at the Annual Images Fashion Awards as well as the Readers Digest Most Trusted Brand Award.
SHARE CAPITAL
The Authorized Share Capital of your Company as on March 31, 2019 stands at Rs. 700 Million divided into 140,000,000 equity shares of Rs. 5/- each. The Issued Share Capital of your Company is Rs. 642.85 Million divided into 128,570,000 equity shares of Rs. 5/- each and the Subscribed and Paid-up Share Capital is Rs. 642.64 Million divided into 128,527,540 equity shares of Rs. 5/- each, fully paid-up.
DIVIDEND
Your Board recommends a dividend of Rs. 6.25 per Equity Share of Rs. 5/- each (i.e., 125%) for the financial year ended March 31, 2019. The dividend, if declared, by the Members at the forthcoming Annual General Meeting (AGM) shall be paid to the eligible Members of the Company from Wednesday, August 14, 2019 onwards. The total payout of aforesaid dividend amount would be approximately Rs. 968.42 Million, including the corporate dividend distribution tax, as applicable.
Dividend Distribution Policy
The recommendation of aforesaid dividend is in line with the Dividend Distribution Policy of the Company approved by your Board. The said Dividend Distribution Policy has been annexed to this Board's Report and has also been uploaded on the website of the Company at www.bata.in and is available at the link https://bata.in/0/pdf/DividendDistributionPolicy-BIL.pdf.
Investor Education and Protection Fund (IEPF)
In compliance with the provisions of Sections 124 and 125 of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ('IEPF Rules') as amended from time to time, the Company has deposited a sum of Rs. 12,24,176/- into the specified bank account of the IEPF, Government of India, towards unclaimed / unpaid dividend amount for the financial year ended December 31, 2010.
As per the said Rules, the corresponding equity shares in respect of which Dividend remains unclaimed / unpaid for seven consecutive years or more, are required to be transferred to the Demat Account of the IEPF Authority. During the year under review, the Company has transferred 18980 underlying Equity Shares to the Demat Account of the IEPF Authority, in compliance with the aforesaid Rules.
GENERAL RESERVE
The Company has not transferred any amount to the General Reserve during the financial year ended March 31, 2019.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN END OF THE FINANCIAL YEAR AND THE DATE OF THIS REPORT
Subsequent to the end of the financial year on March 31, 2019 till date, there has been no material change and / or commitment which may affect the financial position of the Company.
CREDIT RATING
During the year under review, ICRA Limited (ICRA) has reaffirmed the Credit Rating of '[ICRA] AA+' (pronounced as ICRA double A plus) for the Non-Fund Based Facilities of your Company. The outlook on the Long Term Rating is 'Stable'.
DEPOSITS
Your Company has no unclaimed / unpaid matured deposit or interest due thereon since December 31, 2013. Your Company has not accepted any deposits covered under 'Chapter V - Acceptance of Deposits by Companies' under the Companies Act, 2013 during the financial year ended March 31, 2019.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
In terms of Section 186 of the Companies Act, 2013 and Rules framed thereunder, details of the Loans given and Investments made by your Company have been disclosed in Note No. 5 of the Notes to Financial Statements for the year ended March 31, 2019, which forms part of this Annual Report. Your Company has not given any guarantee or provided any security during the year under review.
RELATED PARTY TRANSACTIONS
During the financial year ended March 31, 2019, all transactions with the Related Parties as defined under the Companies Act, 2013 read with Rules framed thereunder were in the 'ordinary course of business' and 'at arm's length' basis. Your Company does not have a 'Material Subsidiary' as defined under Regulation 16(1)(c) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ['Listing Regulations']. Your Board shall formulate a Policy to determine Material Subsidiary as and when considered appropriate in the future.
Your Company has formulated a Policy on Related Party Transactions and the said Policy has been uploaded on the website of the Company at www.bata.in and is available at the link https://www.bata.in/0/pdf/RelatedPartyTransactionPolicy.pdf. Also, your Company has an internal mechanism for the purpose of identification and monitoring of Related Party Transactions.
During the year under review, your Company did not enter into any Related Party Transactions which require prior approval of the Members. All Related Party Transactions of your Company had prior approval of the Audit Committee and the Board of Directors, as required under the Listing Regulations. Subsequently, the Audit Committee and the Board have reviewed the Related Party Transactions on a quarterly basis. During the year under review, there has been no materially significant Related Party Transactions having potential conflict with the interest of the Company.
Since all Related Party Transactions entered into by your Company were in the ordinary course of business and also on an arm's length basis, therefore details required to be provided in the prescribed Form AOC - 2 is not applicable to the Company. Necessary disclosures required under the Ind AS 24 have been made in Note No. 36 of the Notes to the Financial Statements for the year ended March 31, 2019.
SUBSIDIARIES
The Company has three wholly owned subsidiaries viz., Bata Properties Limited, Coastal Commercial & Exim Limited and Way Finders Brands Limited.
The Annual Reports of these Subsidiaries will be made available for inspection by the Members of the Company at the Registered Office of your Company at 27B, Camac Street, 1st Floor, Kolkata - 700016, West Bengal between 11:00 a.m. and 1:00 p.m. on any working day upto the date of AGM. The Annual Reports along with the Audited Financial Statements of each of the Subsidiaries of your Company are also available on the website of the Company at www.bata.in. The Annual Reports of the aforesaid Subsidiaries for the financial year ended March 31, 2019 shall be provided to the Members of the Company upon receipt of written request from them.
Pursuant to the provisions of Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing the salient features of Financial Statements of the aforesaid Subsidiaries has been provided in Form AOC-1 and forms part of this Annual Report.
The Audited Consolidated Financial Statements (CFS) of your Company for the financial year ended March 31, 2019, prepared in compliance with the provisions of Ind AS 27 issued by the Institute of Chartered Accountants of India (ICAI) and notified by the Ministry of Corporate Affairs (MCA), Government of India also forms part of this Annual Report.
EXTRACT OF ANNUAL RETURN
The extract of Annual Return in the Form No. MGT-9 as on March 31, 2019 is annexed to this Board's Report and marked as Annexure I. The copy of same has also been uploaded on the website of the Company at www.bata.in and is available at the link https://www.bata.in/bataindia/a-29_s-181_c-42/investor-relations.html.
AUDIT AND AUDITORS
Auditors
In terms of the provisions of Section 139 of the Companies Act, 2013 read with provisions of the Companies (Audit and Auditors) Rules, 2014 as amended, M/s. B S R & Co. LLP, Chartered Accountants (ICAI Firm Registration No. 101248W/W-100022) was appointed as the Auditors of the Company for a consecutive period of 5 (five) years from  conclusion of the 84th AGM held in the year 2017 until conclusion of the 89th AGM of the Company scheduled to be held in the year 2022.
The Members may note that consequent to the changes made in the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014 by the Ministry of Corporate Affairs (MCA) vide notification dated May 7, 2018, the proviso to Section 139(1) of the Companies Act, 2013 read with explanation to sub-rule 7 of Rule 3 of the Companies (Audit and Auditors) Rules, 2014, the requirement of ratification of appointment of Auditors by the Members at every AGM has been done away with. Therefore, the Company is not seeking any ratification of appointment of M/s. B S R & Co. LLP, Chartered Accountants as the Auditors of the Company, by the Members at the ensuing AGM.
Your Company has received a certificate from M/s. B S R & Co. LLP, Chartered Accountants confirming their eligibility to continue as Auditors of the Company in terms of the provisions of Section 141 of the Companies Act, 2013 and the Rules framed thereunder. They have also confirmed that they hold a valid certificate issued by the Peer Review Board of the ICAI as required under the provisions of Regulation 33 of the Listing Regulations.
Secretarial Auditors
In terms of the provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Board at its meeting held on February 12, 2019 appointed M/s. P. Sarawagi & Associates, Company Secretaries, 27, Brabourne Road, Kolkata - 700001, as the Secretarial Auditors of the Company, to conduct the Secretarial Audit for the financial year ended March 31, 2019 and to submit Secretarial Audit Report in Form No. MR - 3.
A copy of the Secretarial Audit Report received from M/s. P. Sarawagi & Associates in the prescribed Form No. MR-3 is annexed to this Board's Report and marked as Annexure II.
Qualification, reservation or adverse remark in the Auditor's Reports and Secretarial Audit Report
There is no qualification, reservation or adverse remark made by the Auditors in their Reports to the Financial Statements (both Standalone and Consolidated) or by the Secretarial Auditors in their Secretarial Audit Report for the financial year ended March 31, 2019.
SIGNIFICANT AND MATERIAL LITIGATIONS / ORDERS
During the year under review, there were no significant material orders passed by the Regulators / Courts and no litigation was outstanding as on March 31, 2019, which would impact the going concern status and future operations of your Company. The details of litigation on tax matters are disclosed in the Auditor's Report and Financial Statements which forms part of this Annual Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
In compliance with the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, a statement containing information on conservation of energy, technology absorption, foreign exchange earnings and outgo of the Company, in the prescribed format, is annexed to this Board's Report and marked as Annexure III.
MANUFACTURING AND SOURCING
Your Company has an elaborate system driven compliance programme in place starting with strict and detailed pre-review for on-boarding procedure in case of a new manufacturing partner in sourcing and also for an associate manufacturer for our own factories. This includes clearance of documents and a thorough compliance audit prior to approval. All our factories have been audited by SGS and have been certified fully compliant by them. Our vendors have also been audited by various competent organizations in order to check their level of compliance. The Company has engaged "Lexplosion" for providing support and also ensuring that all statutory compliances are being done on time with facility of escalation in case the same is required. This software has been implemented end to end across the organization including all the manufacturing units of the Company. The software provides real-time data visibility and a compliance dashboard. Multiple other initiatives are in progress across Occupational Health, Safety & Environment related aspects of the Company's operations at any given point of time.
To upgrade our associates & our own factories, we have also embarked upon "Manufacturing Excellence" programme driven by CII (Confederation of Indian Industry) & ICME (Indian Centre for Research and Manufacturing Excellence) to build up their capability which comprehensively covers continuous improvement programs such as 5S, TEI, Integrated Quality &
Sustenance Management, etc. In regard to this, your Company was recognized in the category of "Supplier Development" at the 11th CII Confederation on National Competitiveness & Cluster Summit held in National Capital.
To remain competitive, your Company has also very strongly focused on innovation & has successfully launched products with anti-microbial properties & "ortholite" for our Power shoes to increase comfort & fitting experience. Your Company has been working continuously with TBU (Tomas Bata University) based out of Zlin, Czech Republic to improve properties of our rubber compound with better abrasion properties. Apart from such initiatives, your Company has also been using upcycled rubber for rubber soles for sports shoes through its association with "Austin Rubber" based out of U.S.A. which makes the product not only performance driven, but also eco-friendly.
RESEARCH AND DEVELOPMENT ACTIVITIES AND ENERGY CONSERVATION
Research and Development activities during the year under review continued to emphasize on creating a pollution-free and a safe work environment. Technological improvement in product development, material development, introduction of new footwear moulds, process improvement, etc. were the key focus areas to improve quality of footwear and productivity in manufacturing. During the year under review, an expenditure of Rs. 66.31 Million was incurred on Research and Development (including product development initiatives), as against Rs. 57.93 Million during the financial year 2017-18. Research and Development Centres at Batanagar, Bataganj & Batashatak manufacturing units across India, are approved by the Department of Science & Technology, Government of India.
The Company has adopted a series of energy conservation measures like continuously replacing conventional tubelights with energy efficient LED lights, installation of energy efficient Variable Frequency Drive (VFD) motors in conveyors etc. at its manufacturing units across India. Such energy saving measures led to a saving of energy cost worth approx. Rs. 8.03 Million during the year under review. Your Company shall continue to invest on Research and Development activities and energy saving measures in its manufacturing units in the future as well.
CORPORATE SOCIAL RESPONSIBILITY
Your Board has constituted a Corporate Social Responsibility (CSR) Committee of the Board under the Chairmanship of an Independent Director. A CSR sub-committee comprising of Senior Executives of the Company and a dedicated CSR team undertake and monitor all CSR projects of your Company. Composition of CSR Committee of your Company and other relevant details have been provided in the Corporate Governance Report which forms part of this Annual Report.
The Company works on the belief of its founding family members that Companies should exist to serve a social purpose and enhance the quality of lives of people connected through its business. The Company has a CSR Policy in place which aims to ensure that the Company continues to operate its business in an economically, socially and environmentally sustainable manner, while recognizing the interests of all its stakeholders. It takes up CSR programmes, which benefit the communities in and around the vicinity of its operational presence resulting in enhancing the quality of lives of the people in these areas. The said CSR Policy has been uploaded on the website of the Company at www.bata.in and is available at the link https://bata.in/0/pdf/CorporateSocialResponsibilityPolicy.pdf.
Your Company has spent an amount of Rs. 64.24 Million during the financial year 2018-19 as against its 2% obligation amounting to Rs. 58.07 Million, thereby exceeding its entire CSR obligation. Your Company made significant strides to harness all its resources towards successful execution of the CSR projects across all locations.
Model Schools under Bata Children's Programme (BCP)
Your Company worked with more than 3,000 school children at 6 schools adopted under Bata Children's Programme (BCP) nearto the factories and corporate office. BCP is a global programme which aims to work for the children from underprivileged background and is operational in 30 countries wherever Bata is operational. The focus has been to undertake various initiatives at schools to convert them into Model Schools. A holistic programme across these schools is being implemented focusing on infrastructure upgradation, STEM programme by setting up science and computer labs, life skills programme, improving overall health of the children through regular health checkup camps and awareness sessions, sports activities, etc.
Especially designed programme on female adolescent healthcare, health & sanitation, life skills, sports and sessions on female centered issues have been given a priority for the girl child population at the schools. Separate sessions have been held with the parents to encourage the education of girl child and various other issues relevant to the overall development of their children.
Through our concentrated initiatives and extra-curricular activities, there has been an overall development of children through a period of time. Children have become more regular to school. There has been an increase of 12.50% attendance  of children in Computer Classes. At one school, after Bata's support, the number of children at the school increased from 90 to 214, dropout rate reduced from 38% to 2%, teachers were able to use child friendly teaching learning pedagogy which leads to better learning environment. With implementation of better teaching methodology, nutritious meals and better facilities, the academic performance amongst the children also improved.
Through our library programme, 74% of the students drastically improved in their reading skills and 67% of the students in their writing skills. As a result of the Science Centres established at the schools along with science workshops, children have improved their ability to understand scientific concepts and its application; they have become more aware and curious to understand alternative methods of learning. There was also a noticeable improvement in the knowledge and awareness levels of the children on the issues of well-being, hygiene, sanitation, substance abuse, etc.
Girl Child Empowerment through Project Nanhi Kali
In association with K. C. Mahindra Education Trust, your Company supported education of 92 underprivileged girls under project Nanhi Kali. These girls go to Nanhi Kali academic support centres after school hours, where trained tutors engage the girls in concept based learning, focusing on Mathematics and English. Regular assessments and evaluation of these girls' learning level is an integral part of the project along with efficient tracking of attendance. A school kit is provided to every girl annually, thereby allowing her to attend school with dignity. This kit consists of personal clothing, notebooks, stationery, a school bag, shoes, socks, a raincoat/pullover and feminine hygiene material. The Nanhi Kali team works extensively with parents and communities to sensitize them to become collective guardians of the girls.
Happy Steps Programme
As part of Preventive Healthcare, under the Happy Steps Programme of your Company, we engaged with 11956 school children across Chennai, Bangalore and Hyderabad to conduct foot care awareness workshops. Through activities, presentations and demonstrations, children were made aware on the importance of a healthy feet as the foundation of our body, on how to take care of the feet in our daily lives, foot hygiene, foot exercises, dealing with sports injuries, various foot diseases and ways to prevent them, dealing with diabetic feet, etc. A customized Bata school kit comprising of school socks, polish, laces, brush along with instructions to keep the feet healthy and clean were also distributed amongst the children during the workshops.
Stride with Pride
A consumer engagement programme named 'Stride with Pride', was also introduced, wherein customers were encouraged to donate their pair of old footwear across Bata stores at selected cities. For every pair of old footwear received, Bata donated a new pair to a needy child. In order to reduce inequalities faced by socially & economically backward groups, your Company donated about 85,000 pairs of footwear to the underprivileged children.
Disaster Relief & Rehabilitation
During Kerala floods, your Company, as part of the disaster relief and rehabilitation initiative, contributed to help the people in need of the hour. Rapid response teams of employees at respective regions were formed who travelled to relief camps, distributed basic essentials and footwear. Around 8,400 pairs of footwear were donated to the affected people in Kerala and at Coorg in Karnataka.
Employees of your Company came forward to donate their one day's basic salary. Your Company matched the employees donation and contributed around Rs. 1.40 Million to Kerala Chief Minister's Distress Relief Fund. In association with partners, your Company held medical camps in the affected regions to provide immediate and basic health services to the affected population and also focused on the prevention of epidemics in the region. With support from Global BCP Foundation, your Company is renovating 4 schools which got affected during Kerala floods.
CSR Partners
In our endeavor to deliver the best outcomes, we partnered with specialist organizations who are experts in their field.
|
Partner |
Specialization |
Project |
|
SHARP (School Health Annual Report Programme) |
Preventive Healthcare |
BCC (Behaviour Change Communication) workshops for school children. |
|
NIIT Foundation |
Computer education |
'Hole in the Wall' computer project in schools, Computer labs |
|
Ingenuity EduLabs LLP |
Creative science workshops |
Hands on science workshops with school children |
|
Agastya International Foundation |
Science Education |
Science Centres in schools |
|
Katha |
Library education |
Enhancing reading writing skills |
|
K. C. Mahindra Education Trust |
Education of girl child |
Learning centres after school hours |
|
Sugam NGO |
School for underprivileged children |
Non-formal school for underprivileged children |
|
SEEDS (Sustainable Environment and Ecological Development Society) |
Disaster Management |
Kerala flood school renovation |
|
Sulabh Sanitation Mission Foundation and Delhi Metro Rail Corporation (DMRC) |
Sanitation |
Public Toilets at metro rail stations |
|
Sambhav Foundation |
Vocational skills |
Training partner for retail sales |
|
Centum Foundation |
Vocational skills |
Training partner for retail sales |
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Pursuant to the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 as amended, the Annual Report on CSR Activities has been annexed to this Board's Report and marked as Annexure IV
SUPPORT FROM BATA SHOE ORGANIZATION
Your Company continues to receive support from the Holding Company - Bata (BN) B.V, Amsterdam, The Netherlands and also from Bata Shoe Organization (BSO). Your Company also enjoys the benefits of technical research through Global Footwear Services Pte. Ltd., Singapore (GFS). Your Company has renewed the Technical Collaboration Agreement with GFS with effect from January 1, 2011 for a period of ten years. In terms of the said Technical Collaboration Agreement, your Company receives guidance, training of personnel and services from GFS in connection with research & development, marketing, brand development, footwear technology, testing & quality control, store location, layout & design, environment, health & safety, risk & insurance management, etc. Your Company continues to obtain expertise and experience from the personnel of GFS and other BSO group Companies to improve its product range and operational processes throughout the year. In terms of the renewed Agreement as aforesaid, your Company has paid technical services fee of Rs. 283.96 Million to GFS during the financial year ended March 31, 2019, which is around 1% of the Turnover of your Company.
BOARD OF DIRECTORS, BOARD MEETINGS AND KEY MANAGERIAL PERSONNEL
Your Company's Board is duly constituted and in compliance with the requirements of the Companies Act, 2013, the Listing Regulations and provisions of the Articles of Association of the Company. Your Board has been constituted with requisite diversity, wisdom, expertise and experience commensurate to the scale of operations of your Company.
During the year under review, a total of four Meetings of the Board of Directors of the Company were held, i.e., on May 22, 2018; July 20, 2018; November 2, 2018 and February 12, 2019. Also, the Board of Directors have passed 2 (two) Resolutions by Circulation dated December 12, 2018 and March 31, 2019. Details of Board composition and Board Meetings held during the financial year 2018-19 have been provided in the Corporate Governance Report which forms part of this Annual Report.
At the 85th AGM with the approval of the Members, Mr. Sandeep Kataria (DIN: 05183714) was appointed as the Whole-time Director and Chief Executive Officer of the Company for a period of five consecutive years with effect from November 14, 2017. In terms of Section 152(6) of the Companies Act, 2013 read with the Articles of Association of the Company, the period of office of Mr. Kataria shall be liable to retire by rotation.
During the year under review, Mr. Christopher MacDonald Kirk (DIN: 07425236), Non-Executive Director, who retired at the 85th AGM, was re-appointed as a Director of the Company. Subsequently, consequent upon his resignation from the Board of Compass Limited, Bata Shoe Organisation (BSO), Mr. Kirk had tendered his resignation as a Director of Bata India Limited ('the Company') with effect from January 31, 2019. The Board expressed its deepest appreciation for the valuable contribution made by Mr. Kirk during his tenure as a Director of the Company and noted his significant contribution towards the success of the organization.
Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company through Resolution by Circulation dated December 12, 2018 has approved the appointment of Mr. Ashok Kumar Barat (DIN: 00492930) as an Additional Director of the Company with effect from December 17, 2018 to hold office as an Independent Director of the Company for a term of 5 (five) consecutive years, subject to approval of the Members of the Company at the ensuing AGM. Based on the recommendation of Nomination and Remuneration Committee, the Board of Directors of the Company at its Meeting held on February 12, 2019 has appointed Mr. Alberto Michele Maria Toni (DIN: 08358691) as an Additional Director (Category-Non-Executive Director) of the Company with effect from February 12, 2019 to hold office up to the date of the ensuing AGM.
The Company has received Notice under Section 160 of the Companies Act, 2013 from the Member(s) of the Company signifying the candidature of Mr. Barat and Mr. Toni for their appointment as Director(s) of the Company at the ensuing AGM. A brief profile along with necessary disclosures of Mr. Barat and Mr. Toni has been annexed to the Notice convening the ensuing AGM. Your Board recommends appointment of Mr. Barat as a Director and also as an Independent Director of the Company for a term of 5 (five) consecutive years commencing from December 17, 2018. Your Board also recommends appointment of Mr. Toni as a Director (Category-Non-Executive Director), liable to retire by rotation.
Mr. Ram Kumar Gupta (DIN: 01125065), Director Finance and Chief Financial Officer of the Company is due to retire by rotation at the ensuing AGM and being eligible, offers himself for re-appointment. Your Board recommends re-appointment of Mr. Gupta as a Director of the Company, liable to retire by rotation.
Mr. Akshay Chudasama (DIN:00010630) and Ms. Anjali Bansal (DIN:00207746) were appointed as Independent Directors of the Company at an Extraordinary General Meeting of the Company held on August 4, 2014, for a term of five (5) consecutive years each. Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors have proposed their re-appointment for a second term of five (5) consecutive years at the ensuing AGM for the approval of the Members by way of special resolution(s). Resolutions requiring re-appointment(s) have been annexed to the Notice convening the ensuing AGM.
Mr. Uday Khanna (DIN: 00079129), Chairman and Independent Director, after 13 years as a Director including the last 8 years as the Chairman has decided not to offer himself for re-appointment and will relinquish his position on the Board with effect from August 4, 2019. This is in consonance with the Company's internal convention of Bata India Chairman retiring at the age of 70, which he will reach by year end.
The Board places on record its deep sense of gratitude and sincere appreciation for the immense contribution made by Mr. Khanna towards the growth and development of your Company.
Mr. Uday Khanna (DIN: 00079129), Mr. Ravindra Dhariwal (DIN: 00003922), Mr. Akshay Chudasama (DIN:00010630), Ms. Anjali Bansal (DIN:00207746) and Mr. Ashok Kumar Barat (DIN: 00492930), Independent Directors of your Company have declared to the Board of Directors that they meet the criteria of Independence as laid down in Section 149(6) of the Companies Act, 2013 read with Regulations 16(1)(b) and 25(8) of the Listing Regulations and there is no change in their status of Independence and have also confirmed that they are not aware of any circumstance or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties.
Mr. Rajeev Gopalakrishnan (DIN: 03438046), Managing Director, Mr. Sandeep Kataria (DIN: 05183714), Whole-time Director and Chief Executive Officer, Mr. Ram Kumar Gupta (DIN: 01125065), Director Finance and Chief Financial Officer and Mr. Arunito Ganguly, Assistant Vice President, Company Secretary & Compliance Officer are the Key Managerial Personnel (KMP) of your Company.
The Board of Directors confirms that the Independent Directors have affirmed compliance with the Code for Independent Directors as prescribed in Schedule IV to the Companies Act, 2013 and also with the Company's Code of Conduct applicable to all the Board Members and Senior Management Personnel of the Company for the financial year ended March 31, 2019.
Necessary Resolution(s) alongwith disclosure(s) / information(s) in respect of the directors seeking appointment / re-appointment at the ensuing AGM has been annexed to the Notice convening the ensuing AGM.
AUDIT COMMITTEE
The Board of Directors of your Company has duly constituted an Audit Committee in compliance with the provisions of Section 177 of the Companies Act, 2013, the Rules framed thereunder read with Regulation 18 of the Listing Regulations. The terms of reference of the Audit Committee has been duly approved by the Board of Directors. The recommendations made by the Audit Committee are accepted by your Board.
The Audit Committee consists of five Independent Directors and two Non-Executive Directors. The Audit Committee met four times during the financial year ended March 31, 2019, i.e., on May 22, 2018; July 20, 2018; November 2, 2018 and February 12, 2019. Mr. Ashok Kumar Barat, Independent Director is the Chairman of the Audit Committee.
Name of committee members, number of meetings held during the year under review, power of audit committee, terms of reference and other requisite details have been provided in the Corporate Governance Report which forms part of this Annual Report.
NOMINATION AND REMUNERATION POLICY
Your Board has adopted a Remuneration Policy for identification, selection and appointment of Directors, Key Managerial Personnel (KMPs) and Senior Management Personnel (SMPs) of your Company. The Policy provides criteria for fixing remuneration of the Directors, KMPs, SMPs as well as other employees of the Company. The Policy enumerates the powers, roles and responsibilities of the Nomination and Remuneration Committee.
Your Board, on the recommendations of the Nomination and Remuneration Committee, appoints Director(s) of the Company based on his / her eligibility, experience and qualifications and such appointment is approved by the Members of the Company at General Meetings. Generally, the Managing Director and Whole-time Directors (Executive Directors) are appointed for a period of five years. Independent Directors of the Company are appointed to hold their office for a term of upto five consecutive years on the Board of your Company. Based on their eligibility for re-appointment, the outcome of their performance evaluation and the recommendation by the Nomination and Remuneration Committee, the Independent Directors may be re-appointed by the Board for another term of five consecutive years, subject to approval of the Members of the Company. The Directors, KMPs and SMPs shall retire as per the applicable provisions of the Companies Act, 2013 and the policy of the Company. While determining remuneration of the Directors, KMPs, SMPs and other employees, the Nomination and Remuneration Committee ensures that the level and composition of remuneration are reasonable and sufficient to attract, retain and motivate them and ensure the quality required to run the Company successfully. The relationship of remuneration to performance is clear and meets appropriate performance benchmarks and such remuneration comprises a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the Company and its goals. The Company follows a compensation mix of fixed pay, benefits, allowances, perquisites, performance linked incentives and retirement benefits for its Executive Directors, KMPs, SMPs and other employees. Performance Linked Incentive is determined by overall business performance of your Company. Annual increments are decided by the Nomination and Remuneration Committee within the salary scale approved by the Board of Directors and Members of the Company. The Company pays remuneration to Independent Directors by way of sitting fees and commission on the net profits of the Company. Non-Executive Non-independent Directors of your Company do not accept any sitting fees / commission. Remuneration to Directors is paid within the limits as prescribed under the Companies Act, 2013 and the limits as approved by the Members of the Company, from time to time.
During the year under review, there was no change in the Nomination and Remuneration Policy of the Company and the said Policy has been uploaded on the website of the Company at www.bata.in and is available at the link https://bata.in/0/pdf/Remuneration-Policy_2015.pdf. Your Company conducts a Board Evaluation process for the Board of Directors as a whole, Board Committees and also for the Directors individually through self-assessment and peer assessment. The details of Board Evaluation process for the financial year 2018-19 have been provided in the Corporate Governance Report which forms part of this Annual Report.
DISCLOSURES ON REMUNERATION OF DIRECTORS AND EMPLOYEES OF THE COMPANY
Information as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, and subsequent amendments thereto, is annexed to this Board's Report and marked as Annexure V.
A statement containing the information of top ten employees in terms of remuneration drawn and particulars of every employee of the Company, who was in receipt of remuneration not less than the limits specified under Section 197(12) of the Companies Act, 2013 read with Rules 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and subsequent amendments thereto, is annexed to this Board's Report and marked as Annexure VI.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to provisions of Section 134 of the Companies Act, 2013, the Directors, to the best of their knowledge and belief, hereby confirm that:
(a) in the preparation of the annual accounts, the applicable accounting standards had been followed;
(b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2019 and of the profit of the Company for that period;
(c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) they have prepared the annual accounts on a going concern basis;
(e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
(f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.
WHISTLE BLOWER POLICY / VIGIL MECHANISM
In terms of provisions of Section 177 of the Companies Act, 2013 and Rules framed thereunder read with Regulation 22 of the Listing Regulations, your Company has a vigil mechanism in place for the Directors and Employees of the Company through which genuine concerns regarding various issues relating to inappropriate functioning of the organization can be communicated. A Vigil Mechanism Committee under the Chairmanship of the Audit Committee Chairman is also in place. Your Board has amended the existing policy and adopted the revised Whistle Blower Policy, effective from April 1, 2019 which has been uploaded on the website of the Company at www.bata.in and is available at the link https://bata.in/0/pdf/Bata-WhistleBlowerPolicy.pdf. The Policy provides access to the Legal Head of the Company and to the Chairman of the Audit Committee.
No person has been denied an opportunity to have access to the Vigil Mechanism Committee and the Audit Committee Chairman.
CONFIRMATION OF COMPLIANCE ON PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company is committed to provide a safe and secure environment to its women employees across its functions and other women stakeholders, as they are considered as integral and important part of the organization.
In terms of provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed thereunder, your Company has duly adopted a Policy and has also complied with the provisions relating to the constitution of Internal Complaints Committee (ICC).
Your Company has been conducting awareness campaign across all its manufacturing units, warehouses, retail stores and office premises to encourage its employees to be more responsible and alert while discharging their duties.
A summary of the complaints dealt during the financial year ended March 31, 2019 in terms of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed thereunder has been provided in page no. 91 of the Corporate Governance Report which forms part of this Annual Report.
RISK MANAGEMENT AND ADEQUACY OF INTERNAL FINANCIAL CONTROLS
Your Company's internal financial control ensures that all assets of the Company are properly safeguarded and protected, proper prevention and detection of frauds and errors and all transactions are authorized, recorded and reported appropriately. Your Company operates through definitive Chart of Authorities (COAs) and Standard Operating Procedures (SOPs) in respect of its operations including financial transactions. Such COAs and SOPs are regularly monitored and if required, modified from time to time depending on business requirements.
Your Company has an adequate system of internal financial controls commensurate with its size and scale of operations, procedures and policies, ensuring orderly and efficient conduct of its business, including adherence to the Company's policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records, and timely preparation of reliable financial information.
Such practice provides reasonable assurance that transactions are recorded as necessary to permit preparation of Financial Statements in accordance with the applicable legislations and that the same are well within the COAs and SOPs, without exception. Your Company also monitors through its Internal Audit Team the requirements of processes in order to prevent or timely detect unauthorized acquisition, use or disposition of the Company's Assets which could have a material effect on the Financial Statements of the Company. The Internal Audit function is responsible to assist the Audit Committee and Risk Management Committee on an independent basis with a complete review of the risk assessments and associated management action plans.
Risk Management is embedded in the Company's operating framework. Your Company believes that risk resilience is key to achieving higher growth. To this effect, there is a robust process in place to identify key risks across the Company and prioritize relevant action plans to mitigate these risks. Risk Management framework is reviewed periodically by the Board, the Audit Committee and the Risk Management Committee, which includes discussing the management submissions on risks, prioritising key risks and approving action plans to mitigate such risks. An assessment of cyber security has also been carried out in compliance with the requirement of the Listing Regulations and a mitigation plan has been made to counter such risks.
The Internal Audit Report and Risk Inventory Report are reviewed periodically by the Audit Committee of the Board of Directors. The Chief Internal Auditor is a permanent invitee to the Audit Committee Meetings. The Audit Committee advises on various risk mitigation exercises on a regular basis. Your Company has been maintaining a separate Internal Audit Team headed by the Chief Internal Auditor appointed by the Audit Committee of your Board.
Your Board has also constituted a Risk Management Committee comprising of the Directors and Senior Executives of the Company under the Chairmanship of the Managing Director of the Company. The terms of reference of the Risk Management Committee and a Risk Management Policy of the Company have also been approved and adopted.
Your Board is of the opinion that the Internal Financial Controls, affecting the Financial Statements of your Company are adequate and are operating effectively.
COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS
During the year under review, the Company has duly complied with the applicable provisions of the Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) issued by The Institute of Company Secretaries of India (ICSI).
NON-APPLICABILITY OF MAINTENANCE OF COST RECORDS
The Central Government has not prescribed the maintenance of cost records under Section 148(1) of the Companies Act, 2013 and Rules framed thereunder with respect to the Company's nature of business.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Industry structure and developments
India's resource strengths in the form of materials and skilled manpower is a comparative advantage for the country. The increasing use and variety of footwear is leading to an upsurge in demand indicating higher growth prospects for the footwear industry. While Tier I cities have always been brand centric, Tier II and Tier III cities are catching up and therefore sales of branded products are expected to grow significantly in the future.
The Indian footwear market is expected to grow at a double digit and by the year 2022, total market is expected to be around Rs. 72,000 crores with a CAGR of 11%. The Branded footwear is expected to garner substantial market share and this will be supported by the growth in both organized and online retail sale simultaneously. Branded footwear currently accounts for around 45% and unbranded dominates with 55% market share respectively. In case of online retail, Brands are also launching dedicated product range for online channel to differentiate from offline channel and are using data analytics to grow the business. The online sale of footwear is expected to grow in high double digits.
The growing population and the continuous demand has made India the second largest producer of footwear in the world after China and also the world's third-largest footwear consumer after China and the USA. It is estimated that more than 80% of the produced goods are consumed within the domestic market. The market has also witnessed expansion of existing international brands in the country and the entry of premium formal and sportswear brands.
The change in lifestyle, preferences, growing health and fitness awareness amongst urban Indians has also led to a boost in the fitness footwear industry in India. As a result, products like apparel, accessories and variety of fitness equipment now tops priority in shopping lists of consumers around the country primarily including comfortable branded fitness footwear. The Indian fitness footwear segment is witnessing a steady boom and is expected to grow with rapid pace during 2019 -21.
The Indian footwear industry has been witnessing a change from a need-based industry to fashion, style and fitness oriented industry and it has also got the potential to increase its global market share in footwear export. With changing lifestyles and increasing affluence, domestic demand for footwear is projected to grow at a faster rate than it has been seen during the last 10 years.
Opportunities and Threats
Changes in the external business environment along with growing competition from domestic and foreign players in the industry has posed challenges for sustained future growth. To maintain such growth, your Company is taking necessary steps such as focusing on stylish, comfortable and durable quality products so as to be ahead of competition.
Sports and Kids categories are one of the fastest growing among all categories therefore attracting traction from all footwear brands. Your Company is set to take leverage of our strong brands "Power" and "Bubblegummers" including testing of exclusive concept stores. Another opportunity is the upgradation of consumers from unorganized and low priced footwear to branded and lifestyle products thereby enhancing their experience. Your Company is uniquely placed to take advantage of this trend with its aspirational brand image, wide range of recognized brands and unparalled retail footprint.
With the infusion of new lines in men's and women's contemporary collection along with exciting and colorful range for teenage consumers and a range of offerings for the sports & fitness lovers the footfalls at stores are increasing. A range of products in the casual and lifestyle offering especially for working women are expected to create a sustained demand for the future.
The brick and mortar retail industry is also expected to witness intense competition from the innovative digital platforms. Your Company has increased its focus on consumer facing technology and rolled out a full suite of Omni-Channel solutions in 400+ stores as well as upgraded our online experience.
Segment wise or product wise performance
Your Company operates in Footwear & Accessories Segment only and performances of major business categories and key brands of your Company during the financial year ended March 31, 2019 are highlighted below:
Retail Business
Your Company has followed a strategy of driving same store growth while adding new retail stores in Malls and High Street locations to enhance its Retail footprint. These spacious new stores are located in the growing markets of the country and are based on the global design 'Red Angela Store Concept'. These stores are the new face of Bata in India & the first touchpoint for consumers to experience "Surprisingly Bata". It has simple clean lines of design thinking and uses essentially 2 colours, red & white that are uniquely identified with brand Bata.
Your Company shall continue to make investment on renovating existing stores hence creating a delightful shopping experience for the customers by improving store layouts and creating an emphasis on key products within the retail stores. Your Company plans to focus on building the Bata Brand and attract more footfalls in the retail stores through breathtaking windows, in-stores activities and amplify various new launches of products and collections. Your Company is also focused on improving customer service at stores through regular training of store staff. Your Company has initiated a "Store Excellence Program" which aims to improve customer journey inside the stores & improve business parameters while delivering excellent customer service.
During the financial year ended March 31, 2019, your Company opened 71 new Bata retail stores, 51 Franchisee stores & renovated 47 stores across India. Your Company also relocated 14 stores and closed 28 stores.
Your Company is strengthening various brands under the umbrella of Bata like Power & Bubblegummers & have continued testing these formats in couple of more locations. Now your Company operates 3 Power & Bubblegummers stores. A new concept of Bata Woman also has been tested with 2 stores in Bengaluru. These new concept stores would open new consumer segments for us in times to come.
Digital Multi-Channel Business
Your Company's online business has recorded a significant growth during the year under review. Your Company sold more than 1.5 million pairs of footwear through online channels and achieved a turnover of over Rs. 1,200 Million. Your Company's e-commerce presence has penetrated in 1000+ cities and towns across India.
During the fiscal year, your Company's e-commerce division worked on identifying market opportunities for business growth in the existing online business models including B2B and B2C. Your Company has strengthened its e-commerce team for creating an edge in online marketing. From online customer segmentation, purchase behaviour analysis to direct and indirect competition analysis, the business maximized its reach to potential online buyers in footwear and accessories category. Cross-channel promotions and performance-driven e-commerce marketing campaigns got the overall website's www.bata.in business off the ground with an increase in traffic from 4.50 Million to 9 Million. Your Company strengthened its online customer database more than doubling it by reaching out to the leading telecom, airline and banking players in association with affiliate partners. Your Company's website launched Endless Aisle while connecting retail store inventory to online website with technical integration multiplying the business potential. Your Company's B2B business has grown across all partner portals - Amazon, Flipkart, Myntra and Jabong - with a steep increase in secondary sales through competitive product offerings, rigorous marketing campaigns including Cost per Click (CPC) and Cost per Million Impressions (CPM) while diligently participating in brand specific and category specific events. Various market expansion strategies were put in place like expansion of brand presence through marketplace model by listing products on high-traffic generating websites including TataCliq, ShopClues, Limeroad etc. Your Company's e-commerce website www.bata.in implemented CDN services to improve overall load time of the website which reduced from 15 sec to 7 sec per new session.
Hush Puppies
Hush Puppies entered Indian market 20 years ago & initially positioned as "Premium Men's Dress Footwear Brand". Last year also, as a team we have worked on the products, marketing, stores & overall customer experience to re-position it as "International Premium Lifestyle Brand", which is in synchronisation with current global brand positioning. Today, Hush Puppies is the biggest brand in Premium Footwear space with increasing market share on year to year basis.
The Brand has traversed from being Men Dress brand to becoming a Lifestyle Casual footwear brand in last couple of years. The product mix varies from Dress to casual, from closed to open footwear in both Men & Ladies with a strong presence in Hand Bags / Socks / Accessories. It has now shoes for literally all occasions in a life of an urban consumer. Hush Puppies believe in vision of "treating the world to their favorite shoe". With increasing per capita footwear consumption & a wide variety of national& international brands operating, Indian market has become really exciting turf to play on. Hush Puppies would like to maintain its leadership position in market as well as in the heart of Indian consumers.
Currently, the main focus is on urban Indians residing in Metro & Tier I and Tier II cities through Hush Puppies concept stores & through a wide Bata Network that goes up-toTier III cities as well. Fast growing online (e-commerce) is helping us virtually reaching every corner of India & helping aspiring consumers to own a pair of Hush Puppies. This Brand is already having 90+ Company owned & managed Exclusive Brand Outlets which would cross 100 mark by the end of 2019.
Hush Puppies is an aspirational brand for urban India & we will continue to attract consumers through exceptional products, beautiful stores which are in-line with Global store concepts & best in-class customer service.
Children's Footwear
In order to cater to the children's ever changing footwear demand, your Company has been introducing many new designs and innovative footwear. Through 'Bubblegummers' brand of footwear, your Company has always been striving to make quality shoes with uncompromising comfort and features that safeguard their little feet. Bubblegummers is retailed through all Bata stores across the Country and has been the first point of contact to start our consumers' journey to establish long term association with Bata. With 18% of the Country's population below the age of 10 years, the potential to grow in the children category of footwear is huge, which makes this category as one of the key focus areas for your Company.
Your Company has further established an association with The Walt Disney Company India Pvt. Ltd. and working with a set of designers from Disney, to create a complete collection covering all types of footwear ranging from casual shoes, canvas shoes and Ballerinas to everyday-wear sandals and chappals. Your Company has created exclusive 'Disney Corners' in some of its key retail stores across major cities in India to highlight the collection and add value to the children category of footwear range.
Non-Retail Business
Your Company's non-retail business division comprises of urban wholesale, industrial and institutional business divisions and exports. Across all the divisions, actions are taken to improve customer service, enhancing quality of Product / Packaging and Upgrading the capability of Employees.
⢠Innovation: There are lots of legendary products with Bata which has huge consumer base built over many decades. Efforts are being made to ensure that they are available in their nearest footwear store. We have also launched some brands like Way Finder to make the brand more casual, young and aspirational.
⢠Introduction of New Practices / Products: We have launched / upgraded about 400 articles this year which are best in class in terms of Comfort and target youth and ladies. We have also initiated changes in the way we manage our Supply chain. The Demand planning and forecasting process has been re-hauled which is helping in better customer service to our wholesalers as well as Industrial/Institutional Customer.
⢠Expansion: The Expansion in MBO's (Multibrand Outlets) as well as in Industrial and Institutional Customer base concept has been activated which have yielded good results in last few months. During the year, Bata Product availability has got enhanced in 100 new towns across the country.
⢠Technology Upgradation: We have initiated technological upgradation in our billing and MIS system. This has helped us taking faster decision based on right information at almost on real time basis.
Customer Care Initiatives
Customer Service and Experience has been a big focus area of the Company. There is a dedicated customer service team to ensure that customers don't face any inconvenience and their concerns are addressed in a timely and amicable way. Atoll free customer support number is in place so that customers can reach out directly to the Company as well as via other channels like e-mail, facebook, twitter, etc. The Company ensures that all customer concerns are resolved within minimum timelines.
The Company has also been collecting customers feedback on their shopping experience and measuring it as per the global standard tool NPS since January 2018. The Company has started an initiative to close loop Detractors (customers who give negative feedback) by calling them and addressing / resolving their queries.
Bata Club
The Company's loyalty programme "Bata Club" has increased over the years and currently it has over 25 Million members. The programme engages with its members continuously and rewards them with special benefits to drive repeat purchase, conversion and footfalls. The Company has also started doing various innovative technology-driven promotions to leverage big festivals and events and further increase engagement from its member base.
Outlook
Your Company has an established leadership position in the industry and the most trusted name in branded footwear and accessories. With the change in customer preferences, shoes have become a style statement especially among the teenagers, youth and the affluent working class. The domestic demand for footwear is projected to grow at a fast pace. The inclination towards purchase of products manufactured by established brands is increasing. The digital platform, presence in social media, blogs and advertisements are fast catching up with the brick and mortar sales model. Your Company is proactively engaged in taking appropriate steps to tap these opportunities in order to improve its market share and retain its leadership position in the organized footwear and accessories sector of the industry.
Risks and Concerns and Contingent Liabilities
Your Company acknowledges the fact that competition from both domestic and international players is increasing by every passing day. In addition to increasing competition, the changing customer's behaviour and impact of online marketing initiatives have an effect on your Company's performance since your Company has a huge network of retail stores Pan India. With the opportunity for employment, gradually increasing people / talent retention is considered as a challenge. Your Company also realizes that modernization of IT. systems along with having suitable protection from risk of loss / theft of data is one of the major areas of concern globally. Your Company monitors its major risks and concerns at regular intervals. Appropriate steps are taken in consultation with all concerned including the Risk Management Committee and the Audit Committee of the Board to identify and mitigate such risks.
During the normal course of its business operations, your Company has been subjected to litigations in connection with or incidental thereto. These litigations include civil cases, excise and customs related cases, etc. filed by and against the Company. These cases are being pursued with due importance and in consultation with legal experts in respective areas. Your Board believes that the outcome of these cases are unlikely to cause a materially adverse effect on the Company's profitability or business performance. Your Company has a Contingent Liability of Rs. 435.89 Million as on March 31, 2019 as compared to Rs. 460.54 Million as on March 31, 2018. Attention is drawn to the explanations mentioned in Note No. 31 of the Notes to Financial Statements for the financial year ended March 31, 2019. In view of the present status and based on legal advice obtained from time to time, your Board is of the opinion that no provision is required to be made against these Contingent Liabilities.
Internal control systems and their adequacy
A separate paragraph on internal control systems and their adequacy has been provided elsewhere in the Board's Report. Discussion on financial performance
Your Company has been able to achieve profitable growth and believes that this is sustainable, barring unforeseen circumstances.
The Earnings per Share (EPS-Basic and Diluted) of your Company for the financial year ended March 31, 2019 was at Rs. 25.65 as compared to the (EPS-Basic and Diluted) for the previous financial year ended March 31, 2018 was at Rs. 17.40. Your Company recorded EBITDA margin of 16.30% during the financial year under review as compared to 13.40% during the financial year 2017-18.
Your Company does not have any Bank Borrowings and the entire capital expenditure has been funded through internal sources.
The Capital Expenditure incurred during the year under review amounted to Rs. 911.96 Million as compared to Rs. 930.77 Million in the previous year.
Details of significant changes in key financial ratios alongwith explanation
In compliance with the requirement of the Listing Regulations, the key financial ratios of the Company alongwith explanation for significant changes (i.e., for change of 25% or more as compared to the immediately previous financial year will be termed as 'significant changes'), has been provided hereunder:
|
SI. No. |
Particulars* |
2018-19 |
2017-18 |
|
0) |
Debtors to Sales (in days) |
8 |
12 |
|
(ii) |
Inventory to Turnover Ratio (in months) |
3.44 |
3.47 |
|
(iii) |
Interest Coverage Ratio |
116.53 |
69.89 |
|
(iv) |
Current ratio |
2.92 |
2.76 |
|
(v) |
Debt Equity Ratio* |
- |
- |
|
(vi) |
Operating Profit Margin (%) |
14.11 |
11.13 |
|
(vii) |
Net Profit Margin (%) |
11.26 |
8.48 |
|
(viii) |
Return on Net worth (%) |
18.88 |
15.12 |
The Government of India has implemented Goods and Services Tax (GST) from July 2017 subsuming excise duty, service tax and various other indirect taxes. Accordingly, the Revenue for the financial year ended March 31, 2019 as reported in the Statement of Profit and Loss are not comparable with the previous financial year. Therefore, the Ratio relating to Turnover are not comparable with the previous financial year.
There is no borrowing in the Company. However, Finance cost includes interest expenses accounted for various deposits in accordance with Ind AS 109, Financial Instruments.
⢠The significant changes in Debtor Turnover Ratio has been recorded on account of increase in turnover and reduction in receivables which resulted into reduction of outstanding receivable days.
⢠The significant changes in Interest Coverage Ratio has been recorded due to significant increase in Earnings Before Interest and Taxes (EBIT) with reduction in finance cost of the Company.
⢠The significant changes in Operating Profit Margin (%), Net Profit Margin (%) and the Net worth Ratio (%) is due to cost efficiencies/productivity improvement and premiumisation of our product range leading to increased profits.
The other financial ratios of the Company relating to previous 10 years has been provided in other part of Annual Report 2018-19.
Material developments in human resource / industrial relations front, including number of people employed
Your Company has been continuously working to improve human resources skills, competencies and capabilities in the Company, which is critical to achieve desired results in line with our strategic business ambitions. Some key initiatives that have been taken during the financial year 2018-19 in this direction are summarized below:
Execution of Long Term Agreement (LTA) for settlement of dues with the Worker's Union at the manufacturing unit of the Company at Bataganj, Patna.
Industrial relations at all the manufacturing units of your Company have been harmonious and peaceful with active involvement of the employees in the collective bargaining process. Your Company has also encouraged wholehearted participation of the employees and union in improving productivity as well as quality of its products.
The goal setting process was cascaded from the Top aligned with Country's strategies and goals for the year. With a co-ownership of goals at the Department Head level, a complete alignment in the organization was possible. A quarterly review of scorecard helped to further strengthen the process.
⢠Multiple set of training programmes have been designed and rolled out in phases focusing on functional and behavioral needs of an individual. Some of these include Leadership & Coaching for Leaders who manage Managers, Personal Effectiveness for all individual contributor roles, first time Leaders, Negotiation skills and B2B sales process and capability. Cross functional training is another key area of focus.
Keeping up with the philosophy of "Learning is individual driven and organization facilitated", we are now building a catalogue of online training modules which an individual can access on their own anytime.
For our store staffs, an online learning platform was launched in 2018, this now is available to over 4000 employees across 800 stores. On this 24/7 learning platform, the employees complete their Product training & certification as well as gain useful knowledge on new launches and campaigns.
⢠'Stepping Stones' is our new career programme being launched which would enable an employee to make a choice of role across functions, understand the differentiating competencies and work out a learning plan. It's a tool to empower the employees take the right decision for themselves.
⢠As on March 31, 2019, there were 4,890 permanent employees on the rolls of your Company. CAUTIONARY STATEMENT
There are certain Statements which have been made in the Management Discussion and Analysis Report describing the estimates, expectations or predictions, may be read as 'forward-looking statements' within the meaning of applicable laws and regulations. The actual results may differ materially from those expressed or implied. The important factors that would make a difference to the Company's operations include demand-supply conditions, raw material prices, changes in Government Policies, Governing Laws, Tax regimes, global economic developments and other factors such as litigation and labour negotiations.
BUSINESS RESPONSIBILITY REPORT (BRR)
In compliance with the provisions of Regulation 34(2)(f) of the Listing Regulations read with the SEBI Circular No. CIR/CFD/ CMD/10/2015 dated November 4, 2015, your Company has prepared a BRR in the prescribed format for the financial year ended March 31, 2019 describing initiatives undertaken by it from an environmental, social and governance perspective, which is annexed to the Board's Report and marked as Annexure VII. The BRR has been uploaded on the website of the Company at www.bata.in and is available at the link https://bata.in/bataindia/a-29_s-181_c-42/investor-relations.html.
CORPORATE GOVERNANCE
In compliance with the provisions of Regulation 34 of the Listing Regulations read with Schedule V to the said Regulations, the Corporate Governance Report of your Company for the financial year ended March 31, 2019 and a Certificate received from M/s. B S R & Co., LLP, Chartered Accountants, the Auditors, on compliance with the provisions of Corporate Governance requirements as prescribed under the Listing Regulations, are annexed and forms part of this Annual Report.
ACKNOWLEDGEMENTS
Your Board is grateful for the continuous patronage of our valued customers and remains committed to serving their needs by delivering more style and comfort at every step. Our Board acknowledges and appreciates the relentless efforts by employees, workmen and staff including the Management headed by the Executive Directors who have all worked together as a team in achieving a commendable business performance year on year.
Your Board is also indebted to the unstinted support and trust reposed by you, our shareholders and are also thankful to the Bata Shoe Organization (BSO) for their ongoing support and guidance.
Your Board greatfully acknowledges the support and cooperation it receives from all its suppliers, vendors and dealers as well as the regulatory authorities of the Central and State Governments in India.
Your Board wishes to place on record its deep appreciation of the Independent Directors and the Non-Executive Directors of the Company for their great contribution by way of strategic guidance, sharing of knowledge, experience and wisdom, which helps your Company to take the right decisions in achieving its business goals.
|
 |
For and on behalf of the Board of Directors |
|
 |
UDAY KHANNA |
|
Place : Gurugram |
Chairman |
|
Date : May 24, 2019 |
DIN: 00079129 |
ANNEXURE TO THE BOARD'S REPORT
DIVIDEND DISTRIBUTION POLICY
1. OBJECTIVE
In terms of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with SEBI notification dated July 8, 2016, and in accordance with the requirements of the Companies Act, 2013 and Rules thereof, the Board of Directors of Bata India Limited ('the Company') at its Meeting held on November 25, 2016 has adopted the Dividend Distribution Policy.
2. BACKGROUND
The Company was incorporated as Bata Shoe Company Limited on December 23, 1931 under the Indian Companies Act, 1913 with its Registered Office in Kolkata, West Bengal. The name was subsequently changed to Bata India Limited on April 23, 1973. Bata India Limited has been declaring dividend since 1973, except in the years 1974, 1992, 1994-1997 and 2002-2006. The Company recognizes the need to lay down a broad framework for considering decisions by the Board of the Company, with regard to distribution of dividend to its shareholders and/or retaining or plough back of its profits.
3. EFFECTIVE DATE
The Policy shall be effective from December 1, 2016.
4. DEFINITIONS
a) "Act" means the Companies Act, 2013, and any statutory modification thereof.
b) "Company" means Bata India Limited.
c) "Board of Directors" or"Board", means the collective body of the directors of the Company.
d) "dividend" includes any interim dividend.
e) "financial year", means April 1 to March 31 every year.
f) "free reserves" means such reserves which, as per the latest audited balance sheet of the Company, are available for distribution as dividend:
Provided that-
(i) any amount representing unrealised gains, notional gains or revaluation of assets, whether shown as a reserve or otherwise, or
(ii) any change in carrying amount of an asset or of a liability recognized in equity, including surplus in profit and loss account on measurement of the asset or the liability at fair value, Â shall not be treated as free reserves;
g) "IEPF" means Investor Education and Protection Fund set up by the Government of India. h) "MCA" means Ministry of Corporate Affairs.
5. THE REGULATORY FRAMEWORK
The recommendation, declaration and payment of dividend by the Company is subject to the provisions of Sections 123 and 134(3)(k) of the Companies Act, 2013 read with Companies (Declaration and Payment of Dividend) Rules, 2014 and Regulations 12, 29, 42, and 43 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
6. GENERAL POLICY OF THE COMPANY AS REGARDS DIVIDEND
a) The Board shall determine the payment of dividend in a particular financial year after taking into consideration the following factors:
i. Financial performance of the Company, including the Net Profit earned during the current and previous years and also the accumulated profit (loss) of the earlier years.
ii. Statutory requirements including the Taxation Laws and other applicable Securities Laws.
iii. The level of its liquid assets.
iv. Past Dividend trends of the Company.
v. Replacement of capital assets, expansion, diversification and modernization projects involving substantial capital expenditure.
vi. Required expenditure in R & D.
vii. Expectations of shareholders, who generally invest with the hope of getting a constant return.
viii. Obligations to Creditors, if any.
b) The Company may transfer any amount to General Reserve before the declaration of dividend in any financial year as may be decided by the Board. The Company may consider capitalization of profits or reserves of the Company for the purpose of issuing fully paid-up bonus shares, irrespective of declaration of dividend.
c) In the event of inadequacy of profits, the Board may decide not to declare dividends for that financial year or declare dividend out of free reserves, subject to the compliance of the Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
d) The Company presently has only one class of shares (Equity shares). Hence, parameters which are required to be adopted for various classes of shares do not apply to the Company.
e) The Company shall disclose the Dividend Distribution Policy in its Annual Report and shall also post it on the website of the Company. If the Company proposes to declare dividend on the basis of parameters in addition to those mentioned in the policy, it shall disclose such changes along with the rationale for the same in its Annual Report and on its website.
f) Appropriate Dividend Distribution Tax shall be paid before the dividend is distributed amongst the shareholders.
7. MANNER OF DIVIDEND PAYOUT
a) In case of final dividends
i. The Board shall recommend dividend to the shareholders, which shall be paid subject to approval of the shareholders at Annual General Meetings of the Company.
ii. Dividends shall be paid only out of current profits or past profits after providing for depreciation and setting off losses, if any.
iii. The amount of the dividend shall be deposited in a scheduled bank in separate account within 5 days from the declaration of dividend.
iv. The payment of dividends shall be made within 30 days from the date of declaration to the shareholders entitled to receive the dividend on the record date as per the applicable law.
b) In case of interim dividend
i. Interim dividend, if any, shall be declared by the Board.
ii. Before declaring interim dividend, the Board shall consider the financial position of the Company that allows the payment of such dividend.
iii. In case no final dividend is declared at the Annual General Meeting, interim-dividend will be considered as the final dividend of the Company.
c) Payment mode
Dividend shall be paid by cheque or warrant or in any electronic mode to the shareholders entitled to the payment of the dividend. The Dividend shall be delivered to the shareholders through ordinary post/Registered post/Speed post/courier.
8. UNPAID/UNCLAIMED DIVIDEND
a) Where a dividend has been declared by the Company but has not been paid or claimed within thirty days from the date of the declaration to any shareholder entitled to receive such dividend, the Company shall, within seven days from the date of expiry of the said period of thirty days, transfer the total amount of dividend which remains unpaid or unclaimed to a special account to be opened by the Company in any scheduled bank to be called as Unpaid Equity Dividend Account.
b) Any person claiming to be entitled to any money transferred to the Unpaid Dividend Account of the company may apply to the Company for payment of the money claimed.
c) Any money transferred to the Unpaid Equity Dividend Account of the Company which remains unpaid or unclaimed for a period of seven years from the date of such transfer shall be transferred by the Company to the Investor Education and Protection Fund (IEPF).
d) The Company shall inform at the latest available address, the shareholder concerned regarding transfer of shares to IEPF, three months before the due date of transfer of shares and also simultaneously publish a notice in the leading newspaper in English and regional language having wide circulation and on their website giving details of such shareholders and shares due for transfer.
e) Statement of amount of dividend credited to the IEPF, Statement of unclaimed and unpaid amounts due to be credited in coming years, Statement of shares transferred to the IEPF and Statement of shares and unclaimed and unpaid dividend not transferred to IEPF due to specific order of Statutory Authority, shall be filed with MCA in prescribed form.
9. CONCLUSION
The Company shall endeavour to maintain a consistency in dividend payout, every year. The Company may also declare special dividend as and when there are exceptional gains by the Company. The Board shall finalize the rate of such special dividend. The focus of the Company is to declare a Policy on distribution of dividend so that the investor may know as to when and how much dividend they may expect.
10. AMENDMENT
The Dividend Distribution Policy is subject to modification by the Board from time to time, to be in the line with the best industrial practices and to ensure conformity with the subsequent amendments in the Act, Rules, Regulations and Notifications issued by various Statutory Authorities, from time to time.
Annexure I
FORM NO. MGT - 9
EXTRACT OF ANNUAL RETURN Â as on the Financial Year ended on March 31, 2019
[Pursuant to Section 92(3) of the Companies Act, 2013, and Rule 12(1) of the Companies (Management and Administration) Rules, 2014]
I. REGISTRATION AND OTHER DETAILS
|
CIN |
L19201WB1931PLC007261 |
|
Registration Date |
December 23, 1931 |
|
Name of the Company |
Bata India Limited |
|
Category / Sub-Category of the Company |
Public Company-Limited by Shares |
|
Address of the Registered Office and contact details |
27B, Camac Street, 1st Floor, Kolkata - 700016, West Bengal Telephone: (033) 2301 4400 Fax: (033) 2289 5748 E-mail: corporate.relations@bata.com |
|
Whether Listed Company |
Yes |
|
Name, address and contact details of the Registrar and Transfer Agent |
M/s. R & D Infotech Private Limited 7A, Beltala Road, 1st Floor, Kolkata - 700026, West Bengal Telephone: (033)24192641 /2642 Fax: (033)24192642 E-mail: bata@rdinfotech.net/ info@rdinfotech.net |
II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY
|
SI. No. |
Name and Description of main Products / Services |
NIC Code of the Product / Service |
% to total turnover of the Company |
|
1. |
Footwear & Accessories â Retail |
47713 |
89.85 |
|
2. |
Footwear- Non Retail |
46413 |
10.15 |
II. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES
|
SI. No. |
Name and address of the Company |
CIN/GLN |
Holding / Subsidiary/ Associate |
% of Shares held |
Applicable Section |
|
1. |
Bata (BN) B.V. Europaplein 1, 5684 ZC Best, P.O. Box 990, 1000 AZ, Amsterdam, The Netherlands |
Company Registration No. 33038028 |
Holding |
52.96 |
2(46) |
|
2. |
Bata Properties Limited 6A, S. N. Banerjee Road, Kolkata -700013, West Bengal |
U70101WB1987PLC042839 |
Subsidiary |
100 |
2(87) |
|
3. |
Coastal Commercial & Exim Limited 16A, Shakespeare Sarani Kolkata -700071, West Bengal |
U51311WB1991PLC053364 |
Wholly-owned Subsidiary of Bata Properties Limited, as referred in SI. No. 2 above |
- |
2(87) |
|
4. |
Way Finders Brands Limited 204, Rashbehari Avenue, Kolkata - 700029, West Bengal |
U51909WB2014PLC204637 |
Subsidiary |
100 |
2(87) |
IV. SHAREHOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)
i) Category-wise Shareholding
|
Category of Shareholders |
No. of Shares held at the beginning of the year |
No. of Shares held at the end of the year |
% Change during the year |
||||||
|
Demat |
Physical |
Total |
% of Total Shares |
Demat |
Physical |
Total |
% of Total Shares |
||
|
A. Promoter |
 |
 |
 |
 |
 |
 |
 |
 |
 |
|
(1) Indian |
 |
 |
 |
 |
 |
 |
 |
 |
 |
|
a) Individual / HUF |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
b) Central Govt. |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
c) State Govt.(s) |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
d) Bodies Corporate |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
e) Banks / Fl |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
f) Any Other |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Sub-total (A)(1): |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
(2) Foreign |
 |
 |
 |
 |
 |
 |
 |
 |
 |
|
a) NRIs - Individuals |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
b) Other - Individuals |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
c) Bodies Corporate |
68065514 |
0 |
68065514 |
52.96 |
68065514 |
0 |
68065514 |
52.96 |
0.00 |
|
d) Banks / Fl |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
e) Any Other |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Sub-total (A)(2): |
68065514 |
0 |
68065514 |
52.96 |
68065514 |
0 |
68065514 |
52.96 |
0.00 |
|
Total Shareholding of Promoter (A) = (A)(1)+(A)(2) |
68065514 |
0 |
68065514 |
52.96 |
68065514 |
0 |
68065514 |
52.96 |
0.00 |
|
B. Public Shareholding |
 |
 |
 |
 |
 |
 |
 |
 |
 |
|
(1) Institutions |
 |
 |
 |
 |
 |
 |
 |
 |
 |
|
a) Mutual Funds / UTI |
22491559 |
600 |
22492159 |
17.50 |
21631176 |
800 |
21631976 |
16.83 |
-0.67 |
|
b) Banks / Fl |
494588 |
1680 |
496268 |
0.38 |
315643 |
1180 |
316823 |
0.25 |
-0.13 |
|
c) Central Govt. |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
d) State Govt.(s) |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
e) Venture Capital Funds |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
f) Insurance Companies |
9790775 |
300 |
9791075 |
7.62 |
5795951 |
300 |
5796251 |
4.51 |
-3.11 |
|
g) Flls |
7951267 |
100 |
7951367 |
6.19 |
14312818 |
0 |
14312818 |
11.13 |
4.94 |
|
h) Foreign Venture Capital Funds |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
i) Others |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Sub-total (B)(1): |
40728189 |
2680 |
40730869 |
31.69 |
42055588 |
2280 |
42057868 |
32.72 |
1.03 |
|
(2) Non-Institutions |
 |
 |
 |
 |
 |
 |
 |
 |
 |
|
a) Bodies Corporate |
 |
 |
 |
 |
 |
 |
 |
 |
 |
|
i) Indian |
3425719 |
10436 |
3436155 |
2.67 |
2359855 |
8400 |
2368255 |
1.84 |
-0.83 |
|
ii) Overseas |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
b) Individuals |
 |
 |
 |
 |
 |
 |
 |
 |
 |
|
i) Individual shareholders |
12783793 |
1515551 |
14299344 |
11.12 |
12981978 |
1197203 |
14179181 |
11.03 |
-0.09 |
|
holding nominal share capital upto Rs. 1 lakh |
 |
 |
 |
 |
 |
 |
 |
 |
 |
|
ii) Individual shareholders |
1295634 |
0 |
1295634 |
1.01 |
998699 |
0 |
998699 |
0.78 |
-0.23 |
|
holding nominal share capital in excess of Rs. 1 lakh |
 |
 |
 |
 |
 |
 |
 |
 |
 |
|
c) Others |
 |
 |
 |
 |
 |
 |
 |
 |
 |
|
Non Resident Individuals |
452234 |
7686 |
459920 |
0.36 |
592453 |
6486 |
598939 |
0.47 |
0.11 |
|
Directors and Relatives |
10156 |
0 |
10156 |
0.01 |
10156 |
0 |
10156 |
0.01 |
0.00 |
|
IEPF Authority |
229948 |
0 |
229948 |
0.18 |
248928 |
0 |
248928 |
0.19 |
0.01 |
|
Sub-total (B)(2): |
18197484 |
1533673 |
19731157 |
15.35 |
17192069 |
1212089 |
18404158 |
14.32 |
-1.03 |
|
Total Public Shareholding (B)= (B)(1)+(B)(2) |
58925673 |
1536353 |
60462026 |
47.04 |
59247657 |
1214369 |
60462026 |
47.04 |
0.00 |
|
C. Shares held by Custodian for GDRs & ADRs |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Grand Total (A+B+C) |
126991187 |
1536353 |
128527540 |
100.00 |
127313171 |
1214369 |
128527540 |
100.00 |
0.00 |
Shareholding of Promoters
|
 |
 |
Shareholding at the beginning of the year |
Shareholding at the end of the year |
% change in shareholding during the year |
||||
|
SI. No. |
Shareholder's Name |
No. of Shares |
% of total Shares of the Company |
% of Shares Pledged / encumbered to total shares |
No. of Shares |
% of total Shares of the Company |
% of Shares Pledged / encumbered to total shares |
|
|
1. |
BATA(BN)B.V. |
68065514 |
52.96 |
0.00 |
68065514 |
52.96 |
0.00 |
0.00 |
|
 |
Total |
68065514 |
52.96 |
0.00 |
68065514 |
52.96 |
0.00 |
0.00 |
iii) Change in Promoters' Shareholding:
There was no change in shareholding of Promoter during the financial year ended March 31, 2019.
iv) Shareholding Pattern of top ten Shareholders (Other than Directors, Promoters and Holders of GDRs and ADRs)
|
SI. No. |
For Each of the Top 10 Shareholders |
Shareholding at the beginning of the year |
Cumulative Shareholding during the year |
|||
|
No. of Shares |
% of total shares of the Company |
No. of Shares |
% of total shares of the Company |
|||
|
1 |
KOTAK FUNDS - INDIA MIDCAP FUND |
 |
||||
|
 |
At the beginning of the year |
3013172 |
2.34 |
 |
 |
|
|
 |
Date wise increase(+)/decrease(-) with reasons, during the year : |
|||||
|
 |
Date |
Reason |
 |
 |
 |
 |
|
 |
22-Jun-18 |
Sell |
(96000) |
-0.07 |
2917172 |
2.27 |
|
 |
06-Jul-18 |
Sell |
(5000) |
0.00 |
2912172 |
2.27 |
|
 |
24-Aug-18 |
Buy |
5762 |
0.00 |
2917934 |
2.27 |
|
 |
12-Oct-18 |
Buy |
8777 |
0.01 |
2926711 |
2.28 |
|
 |
21-Dec-18 |
Sell |
(26711) |
-0.02 |
2900000 |
2.26 |
|
 |
28-Dec-18 |
Sell |
(45000) |
-0.04 |
2855000 |
2.22 |
|
 |
01-Mar-19 |
Sell |
(9541) |
-0.01 |
2845459 |
2.21 |
|
 |
08-Mar-19 |
Sell |
(15459) |
-0.01 |
2830000 |
2.20 |
|
 |
15-Mar-19 |
Sell |
(5705) |
0.00 |
2824295 |
2.20 |
|
 |
At the end of the year |
 |
 |
2824295 |
2.20 |
|
|
2 |
LIFE INSURANCE CORPORATION OF INDIA |
 |
 |
 |
 |
|
|
 |
At the beginning of the year |
5983966 |
4.66 |
 |
 |
|
|
 |
Date wise increase(+)/decrease(-) with reasons, during the year : |
|||||
|
 |
Date |
Reason |
 |
 |
 |
 |
|
 |
11-May-18 |
Sell |
(385021) |
-0.30 |
5598945 |
4.36 |
|
 |
18-May-18 |
Sell |
(362798) |
-0.28 |
5236147 |
4.07 |
|
 |
25-May-18 |
Sell |
(327005) |
-0.25 |
4909142 |
3.82 |
|
 |
01-Jun-18 |
Sell |
(304176) |
-0.24 |
4604966 |
3.58 |
|
 |
08-Jun-18 |
Sell |
(335520) |
-0.26 |
4269446 |
3.32 |
|
 |
15-Jun-18 |
Sell |
(478888) |
-0.37 |
3790558 |
2.95 |
|
 |
22-Jun-18 |
Sell |
(206592) |
-0.16 |
3583966 |
2.79 |
|
 |
06-Jul-18 |
Sell |
(377584) |
-0.29 |
3206382 |
2.49 |
|
 |
13-Jul-18 |
Sell |
(406677) |
-0.32 |
2799705 |
2.18 |
|
 |
20-Jul-18 |
Sell |
(352085) |
-0.27 |
2447620 |
1.90 |
|
 |
03-Aug-18 |
Sell |
(63654) |
-0.05 |
2383966 |
1.85 |
|
 |
At the end of the year |
 |
 |
2383966 |
1.85 |
|
Â
|
SI. No. |
For Each of the Top 10 Shareholders |
Shareholding at the beginning of the year |
Cumulative Shareholding during the year |
|||
|
No. of Shares |
% of total shares of the Company |
No. of Shares |
% of total shares of the Company |
|||
|
3 |
KOTAK STANDARD MULTICAP FUND |
 |
 |
 |
 |
|
|
At the beginning of the year |
1800000 |
1.40 |
 |
 |
||
|
Date wise increase(+)/decrease(-) with reasons, during the year : |
||||||
|
Date |
Reason |
 |
 |
 |
 |
|
|
24-Aug-18 |
Sell |
(36300) |
-0.03 |
1763700 |
1.37 |
|
|
31-Aug-18 |
Buy |
36300 |
0.03 |
1800000 |
1.40 |
|
|
15-Feb-19 |
Sell |
(119900) |
-0.09 |
1680100 |
1.31 |
|
|
22-Feb-19 |
Sell |
(66000) |
-0.05 |
1614100 |
1.26 |
|
|
01-Mar-19 |
Buy |
185900 |
0.14 |
1800000 |
1.40 |
|
|
08-Mar-19 |
Sell |
(69850) |
-0.05 |
1730150 |
1.35 |
|
|
15-Mar-19 |
Buy |
69850 |
0.05 |
1800000 |
1.40 |
|
|
22-Mar-19 |
Sell |
(341550) |
-0.27 |
1458450 |
1.13 |
|
|
29-Mar-19 |
Buy |
191400 |
0.15 |
1649850 |
1.28 |
|
|
At the end of the year |
 |
 |
1649850 |
1.28 |
||
|
4 |
FRANKLIN TEMPLETON MUTUAL FUND A/C FRANKLIN INDIA EQUITY FUND |
 |
 |
 |
 |
|
|
At the beginning of the year |
2000000 |
1.56 |
 |
 |
||
|
Date wise increase(+)/decrease(-) with reasons, during the year : |
||||||
|
Date |
Reason |
 |
 |
 |
 |
|
|
13-Apr-18 |
Sell |
(10936) |
-0.01 |
1989064 |
1.55 |
|
|
20-Apr-18 |
Sell |
(2554) |
0.00 |
1986510 |
1.55 |
|
|
27-Apr-18 |
Sell |
(86510) |
-0.07 |
1900000 |
1.48 |
|
|
10-Aug-18 |
Sell |
(50000) |
-0.04 |
1850000 |
1.44 |
|
|
17-Aug-18 |
Sell |
(150000) |
-0.12 |
1700000 |
1.32 |
|
|
24-Aug-18 |
Sell |
(100000) |
-0.08 |
1600000 |
1.24 |
|
|
31-Aug-18 |
Sell |
(100000) |
-0.08 |
1500000 |
1.17 |
|
|
09-NOV-18 |
Sell |
(100000) |
-0.08 |
1400000 |
1.09 |
|
|
At the end of the year |
 |
 |
1400000 |
1.09 |
||
Â
Â
Â
Â
|
SI. No. |
For Each of the Top 10 Shareholders |
Shareholding at the beginning of the year |
Cumulative Shareholding during the year |
||||
|
No. of Shares |
% of total shares of the Company |
No. of Shares |
% of total shares of the Company |
||||
|
10 |
ADITYA BIRLA SUN LIFE TRUSTEE PRIVATE LIMITED A/C ADITYA BIRLA SUN LIFE MNC FUND |
 |
 |
 |
 |
||
|
At the beginning of the year |
1011489 |
0.79 |
 |
 |
|||
|
Date wise increase(+)/decrease(-) with reasons, during the year : |
0 |
0.00 |
0 |
0.00 |
|||
|
At the end of the year |
 |
 |
1011489 |
0.79 |
|||
|
11 |
FIL INVESTMENTS (MAURITIUS) LTD |
 |
 |
 |
 |
||
|
At the beginning of the year |
1979166 |
1.54 |
 |
 |
|||
|
Date wise increase(+)/decrease(-) with reasons, during the year : |
|||||||
|
Date |
Reason |
 |
 |
 |
 |
||
|
05-Oct-18 |
Sell |
(242158) |
-0.19 |
1737008 |
1.35 |
||
|
16-Nov-18 |
Sell |
(11937) |
-0.01 |
1725071 |
1.34 |
||
|
23-Nov-18 |
Sell |
(253867) |
-0.20 |
1471204 |
1.14 |
||
|
30-Nov-18 |
Sell |
(297633) |
-0.23 |
1173571 |
0.91 |
||
|
01-Mar-19 |
Sell |
(446687) |
-0.35 |
726884 |
0.57 |
||
|
Ceased to be part of top ten shareholders of the Company w.e.f. 01.03.2019 |
 |
726884 |
0.57 |
||||
|
At the end of the year |
 |
 |
N.A. |
N.A. |
|||
|
12 |
KOTAK EMERGING EQUITY SCHEME |
 |
 |
 |
 |
||
|
At the beginning of the year |
1124269 |
0.87 |
 |
 |
|||
|
Date wise increase(+)/decrease(-) with reasons, during the year : |
|||||||
|
Date |
Reason |
 |
 |
 |
 |
||
|
27-Apr-18 |
Sell |
(50000) |
-0.04 |
1074269 |
0.84 |
||
|
04-May-18 |
Sell |
(80293) |
-0.06 |
993976 |
0.77 |
||
|
29-Jun-18 |
Sell |
(65079) |
-0.05 |
928897 |
0.72 |
||
|
13-Jul-18 |
Sell |
(192088) |
-0.15 |
736809 |
0.57 |
||
|
20-Jul-18 |
Sell |
(68744) |
-0.05 |
668065 |
0.52 |
||
|
27-Jul-18 |
Sell |
(70000) |
-0.05 |
598065 |
0.47 |
||
|
03-Aug-18 |
Sell |
(35000) |
-0.03 |
563065 |
0.44 |
||
|
17-Aug-18 |
Sell |
(100000) |
-0.08 |
463065 |
0.36 |
||
|
02-Nov-18 |
Sell |
(18874) |
-0.01 |
444191 |
0.35 |
||
|
14-Dec-18 |
Sell |
(45000) |
-0.04 |
399191 |
0.31 |
||
|
28-Dec-18 |
Sell |
(15000) |
-0.01 |
384191 |
0.30 |
||
|
08-Feb-19 |
Sell |
(50000) |
-0.04 |
334191 |
0.26 |
||
|
15-Feb-19 |
Sell |
(15450) |
-0.01 |
318741 |
0.25 |
||
|
Ceased to be part of top ten shareholders of the Company w.e.f. 15.02.2019 |
 |
318741 |
0.25 |
||||
|
At the end of the year |
 |
 |
N.A. |
N.A. |
|||
|
 |
 |
 |
 |
 |
 |
 |
|
| Â | Â | Â | Â | Â | Â | Â | Â |
Â
|
SI. No. |
For Each of the Top 10 Shareholders |
Shareholding at the beginning of the year |
Cumulative Shareholding during the year |
|||
|
No. of Shares |
% of total shares of the Company |
No. of Shares |
% of total shares of the Company |
|||
|
13 |
FRANKLIN TEMPLETON MUTUAL FUND A/C FRANKLIN INDIA PRIMA FUND |
 |
 |
 |
 |
|
|
 |
At the beginning of the year |
1896063 |
1.48 |
 |
 |
|
|
 |
Date wise increase(+)/decrease(-) with reasons, during the year : |
|||||
|
 |
Date |
Reason |
 |
 |
 |
 |
|
 |
13-Apr-18 |
Sell |
(111861) |
-0.09 |
1784202 |
1.39 |
|
 |
20-Apr-18 |
Sell |
(1093) |
0.00 |
1783109 |
1.39 |
|
 |
27-Apr-18 |
Sell |
(37046) |
-0.03 |
1746063 |
1.36 |
|
 |
22-Jun-18 |
Sell |
(94161) |
-0.07 |
1651902 |
1.29 |
|
 |
29-Jun-18 |
Sell |
(299642) |
-0.23 |
1352260 |
1.05 |
|
 |
06-Jul-18 |
Sell |
(171197) |
-0.13 |
1181063 |
0.92 |
|
 |
13-Jul-18 |
Sell |
(97209) |
-0.08 |
1083854 |
0.84 |
|
 |
20-Jul-18 |
Sell |
(527320) |
-0.41 |
556534 |
0.43 |
|
 |
27-Jul-18 |
Sell |
(556534) |
-0.43 |
0 |
0.00 |
|
 |
Ceased to be part of top ten shareholders of the Company w.e.f. 27.07.2018. |
 |
0 |
0.00 |
||
|
 |
At the end of the year |
 |
 |
N.A. |
N.A. |
|
Note: The above information is based on download of beneficial ownership received from the Depositories, indicating change of name, if any, in comparison to beginning of the year.
* Ceased to be part of top 10 list of shareholders of the Company w.e.f. January 19, 2018 and became part of top 10 shareholders again during the financial year 2018-19.
v) Shareholding of Directors and Key Managerial Personnel:
|
SI. No. |
 |
Shareholding at the beginning of the year |
Cumulative Shareholding during the year |
||
|
For Each of the Directors and Key Managerial Personnel |
No. of Shares |
% of total Shares of the Company |
No. of Shares |
% of total Shares of the Company |
|
|
1. |
Mr. Uday Khanna, Chairman and Independent Director |
 |
 |
 |
 |
|
 |
At the beginning of the year |
10000 |
0.01 |
 |
 |
|
 |
Date wise increase (+) / decrease (-) with reasons, during the year |
0 |
0.00 |
0 |
0.00 |
|
 |
At the end of the year |
 |
 |
10000 |
0.01 |
|
2. |
Mr. Sandeep Kataria, Whole-time Director and Chief Executive Officer |
||||
|
 |
At the beginning of the year |
100 |
0.00 |
 |
 |
|
 |
Date wise increase (+) / decrease (-) with reasons, during the year |
0 |
0.00 |
0 |
0.00 |
|
 |
At the end of the year |
 |
 |
100 |
0.00 |
|
3. |
Mr. Ram Kumar Gupta, Director Finance and Chief Financial Officer |
||||
|
 |
At the beginning of the year |
56 |
0.00 |
 |
 |
|
 |
Date wise increase (+) / decrease (-) with reasons, during the year |
0 |
0.00 |
0 |
0.00 |
|
 |
At the end of the year |
 |
 |
56 |
0.00 |
Other than Mr. Uday Khanna, Mr. Sandeep Kataria and Mr. Ram Kumar Gupta, no other Director and Key Managerial Personnel hold any share in the Company either at the beginning of the financial year, during the financial year or as at the end of the financial year 2018-19.
V. INDEBTEDNESS
Indebtedness of the Company including interest outstanding / accrued but not due for payment relating to Secured Loans, Unsecured Loans and / or Deposits: NIL
VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
|
A. Remuneration to Managing Director, Whole-time Director(s) and / or Manager: |
(Rs. in Million) |
|||||
|
 |
 |
 |
Name of the Managing Director and Whole-time Directors |
 |
||
|
 |
SI. No. |
Particulars of Remuneration |
Mr. Rajeev Gopalakrishnan, Managing Director |
Mr. Sandeep Kataria, Whole-time Director and Chief Executive Officer |
Mr. Ram Kumar Gupta, Director Finance and Chief Financial Officer |
Total Amount |
|
 |
1. |
Gross Salary |
 |
 |
 |
 |
|
 |
 |
(a) Salary as per provisions contained in Section 17(1) of the Income-Tax Act, 1961. |
48.02 |
30.61 |
23.31 |
101.94 |
|
 |
 |
(b) Value of perquisites under Section 17(2) of the Income-Tax Act, 1961. |
0.60 |
1.36 |
0.04 |
2.00 |
|
 |
 |
(c) Profits in lieu of salary under Section 17(3) of the Income-Tax Act, 1961. |
- |
- |
- |
- |
|
 |
2. |
Stock Option |
- |
- |
- |
- |
|
 |
3. |
Sweat Equity |
- |
- |
- |
- |
|
 |
4. |
Commission |
 |
 |
 |
 |
|
 |
 |
- as % of profit |
- |
- |
- |
- |
|
 |
 |
- Others, specify |
- |
- |
- |
- |
|
 |
5. |
Others, please specify |
- |
- |
- |
- |
|
 |
Total |
(A) |
48.62 |
31.97 |
23.35 |
103.94 |
|
 |
Ceiling as per the Act |
(10% of Net Profits of the 198 of the Companies Act |
Company calculated ,2013) |
under Section |
490.46 |
|
B. Remuneration to other Directors:
(Rs. in Million)
|
Independent Directors |
|||||||
|
SI. No. |
Particulars of Remuneration |
Name of Directors |
Total Amount |
||||
|
Mr. Uday Khanna |
Mr. Akshay Chudasama |
Ms. Anjali Bansal |
Mr. Ravindra Dhariwal |
Mr. Ashok Kumar Barat* |
|||
|
1. |
⢠Fee for attending Board / Committee Meetings |
0.70 |
0.70 |
0.45 |
0.85 |
0.05 |
2.75 |
|
2. |
⢠Commission |
2.65 |
1.32 |
1.32 |
1.32 |
- |
6.61 |
|
3. |
⢠Others, please specify |
- |
- |
- |
- |
- |
- |
|
Total (B) |
3.35 |
2.02 |
1.77 |
2.17 |
0.05 |
9.36 |
|
|
Ceiling as per the Act |
(1 % of Net Profits of the Company calculated under Section 198 of the Companies Act, 2013) |
49.05 |
|||||
|
Total Managerial Remuneration [Total (A) + Total (B)] |
113.30 |
||||||
|
Overall ceiling as per the Act |
(11% of Net Profits of the Company calculated under Section 198 of the Companies Act, 2013) |
539.51 |
|||||
# Appointed as an Additional and Independent Director with effect from December 17, 2018.
Note: Mr. Alberto Michele Maria Toni and Mr. Shaibal Sinha, Non-Executive Directors of the Company do not accept sitting fees and / or Commission on the Net Profits of the Company. Mr. Toni was appointed as an Additional and Non-Executive Director with effect from February 12, 2019. Mr. Christopher MacDonald Kirk, Non-Executive Director resigned with effect from January 31, 2019.
C. Remuneration to Key Managerial Personnel other than MD / Manager / WTD:
(Rs. in Million)
|
SI.No. |
Particulars of Remuneration |
Mr. Arunito Ganguly, Assistant Vice President, Company Secretary & Compliance Officer |
|
1. |
Gross Salary |
 |
|
 |
(a) Salary as per provisions contained in Section 17(1) of the Income-Tax Act, 1961 |
2.32 |
|
(b) Value of perquisites under Section 17(2) of the Income-Tax Act, 1961 |
- |
|
|
(c) Profits in lieu of salary under Section 17(3) of the Income-Tax Act, 1961 |
- |
|
|
2. |
Stock Option |
- |
|
3. |
Sweat Equity |
- |
|
4. |
Commission |
 |
|
as % of profit |
- |
|
|
Others, specify |
- |
|
|
5. |
Others, please specify |
- |
|
Total |
2.32 |
|
VII. PENALTIES / PUNISHMENT / COMPOUNDING OF OFFENCES:
There were no penalties/punishments/compounding of offences for breach of any section of the Companies Act, 2013 against the Company, it's Directors or other officers in default, during the financial year ended March 31, 2019.
|
 |
For and on behalf of the Board of Directors |
|
 |
Uday Khanna |
|
Place : Gurugram |
Chairman |
|
Date : May 24, 2019 |
DIN: 00079129 |
Annexure II Form No. MR-3
SECRETARIAL AUDIT REPORT
FOR THE FINANCIAL YEAR ENDED MARCH 31, 2019
[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]
To,
The Members
BATA INDIA LIMITED
CIN : L19201WB1931PLC007261
We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by BATA INDIA LIMITED (hereinafter called the Company). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.
Based on our verification of the Company's books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorised representatives during the conduct of Secretarial Audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on March 31, 2019, complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter.
We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on March 31, 2019, according to the provisions of:
(i) The Companies Act, 2013 (the Act) and the rules made thereunder;
(ii) The Securities Contracts (Regulation) Act, 1956 (SCRA) and the rules made thereunder;
(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;
(iv) The Foreign Exchange Management Act, 1999 (FEMA) and the rules and regulations made thereunder to the extent of Foreign Direct Investment (FDI), Overseas Direct Investment (ODI) and External Commercial Borrowings (ECBs);
(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (SEBI Act):
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;
(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;
(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 / the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018;
(d) The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014;
(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;
(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client;
(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009;
(h) The Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1998 / the Securities and Exchange Board of India (Buy back of Securities) Regulations, 2018; and
(i) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
(vi) The Company belongs to the Footwear Industry. To the best of our knowledge and believe and as confirmed by the Management of the Company there is no specific law applicable to the Footwear Industry in India.
We have also examined compliance with the applicable clauses of the following:
(i) Secretarial Standards on Meetings of the Board of Directors (SS-1) and on General Meetings (SS-2) issued by The Institute of Company Secretaries of India.
(ii) The revised uniform Listing Agreement entered into by the Company on 18th February, 2016 with BSE Limited, National Stock Exchange of India Limited and The Calcutta Stock Exchange Limited.
During the year under review the Company has complied with the applicable provisions of the Acts, Rules, Regulations, Guidelines, Standards, etc. mentioned above. However, it is observed that the provisions of the FEMA and rules and regulations made thereunder to the extent of ODI and ECBs; and provisions of Regulations and Guidelines mentioned in (c), (d), (e), (g) and (h) under item no. (v) of para 3 above, were not applicable to the Company during the year under review.
We further report that
I. The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the year under review were carried out in compliance with the provisions of the Act.
II. Adequate notice is given to all Directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance; and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.
III. During the year under review, all the decisions at the meetings of the Board and Committees thereof, were carried out unanimously as the Minutes of these Meetings did not reveal any dissenting member's view.
We further report that there are adequate systems and processes in the Company, commensurate with the size and operations of the Company, to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
We further report that no specific event having a major bearing on the Company's affairs in pursuance of the above referred laws, rules, regulations, guidelines, standards, etc. has taken place during the year under review.
|
 |
For P. SARAWAGI & ASSOCIATES |
|
 |
Company Secretaries |
|
 |
(P. K. Sarawagi) |
|
 |
Proprietor |
|
Place : Kolkata |
Membership No. : FCS-3381 |
|
Date : May 24, 2019 |
C. P. No. : 4882 |
This Report is to be read with our letter of even date which is annexed to this Report as Annexure -A and forms integral part of this Report.
Annexure -A
To,
The Members
BATA INDIA LIMITED
CIN : L19201WB1931PLC007261
Our Report of even date is to be read along with this letter.
1. Maintenance of secretarial records is the responsibility of the Management of the Company. Our responsibility is to express an opinion on these secretarial records based on our Audit.
2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices, we followed, provide a reasonable basis for our opinion.
3. We have not verified the correctness and appropriateness of Financial Records and Books of Accounts of the Company.
4. The compliance of the provisions of corporate and other applicable laws, rules, regulations, standards is the responsibility of Management. Our examination was limited to the verification of procedures on test basis.
5. Wherever required, we have obtained the Management Representation about the compliance of laws, rules and regulations and happening of events etc.
6. The Secretarial Audit Report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the Management has conducted the affairs of the Company.
|
 |
For P. SARAWAGI & ASSOCIATES |
|
 |
Company Secretaries |
|
 |
(P. K. Sarawagi) |
|
 |
Proprietor |
|
Place : Kolkata |
Membership No. : FCS-3381 |
|
Date : May 24, 2019 |
C. P. No. : 4882 |
Annexure III
Information pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 forming part of the Board's Report for the financial year ended March 31, 2019
(A) CONSERVATION OF ENERGY
i. The steps taken or impact on conservation of energy:
a) Installed more power efficient new integrated panel system.
b) Installed translucent sheets & natural air driven turbo fans on roof for working in shop floor with day light & natural ventilation.
c) Installed energy efficient LED lights by replacing high energy consuming lights.
d) Installed Variable Frequency Drive (VFD) in air compressor to save energy.
e) Installed steam recovery system unit to save more power and re-insulation of steam line to prevent heat loss.
f) Reduction of contract demand from electricity board.
g) Installed sensor drive power control system for light and water at washing room. h) Installed GA90 energy efficient screw conveyor.
ii. The steps taken by the Company for utilizing alternate sources of energy:
Introduction of "Solar Energy" is under evaluation. iii. The capital investment on energy conservation equipments:
|
Financial Year |
2018-19 |
2017-18 |
2016-17 |
|
Amount (Rs. in Million) |
7.13 |
5.52 |
0.55 |
(B) TECHNOLOGY ABSORPTION
i. The efforts made towards technology absorption:
a) Material Development
b) Process Development
c) Product Development
d) Footwear Moulds
e) Waste Utilization
f) Energy Savings
g) Enhancing of Safe Work Environment
h) Cater to Export Specification Requirement ii. The benefits derived like product improvement, cost reduction, product development or import substitution:
1. Developed & introduced aroma scented PVC Sole compound for BBG DIP Sandal / Shoes across Bata India Manufacturing Units to eliminate bad smell of PVC which resulted in value addition of the product.
2. Developed & introduced life natural anti-microbial socks across Bata India Manufacturing Units to protect feet from gram positive & gram-negative bacteria & reduce odour inside shoes.
3. Developed high abrasion resistance rubber sole & molded sole as per TBU guideline for Tennis & bestselling jogger shoes by Bata India Manufacturing Units.
4. Introduced value added power sports shoe with knitted KPU upper, finch& Luke article with phylon sole with ortholite socks by Bata India Manufacturing Units.
5. Developed antistatic rubber out sole for Bi-density safety boot as a special feature by Bata India Manufacturing Units.
6. Introduced Winson topcoat EVA ink binder on screen printed EVA Hawai for better durability & improve aesthetic look by Bata India Manufacturing Units.
7. Developed low density PU Sandal with lighter weight & better physical properties with annual saving of Rs 4.40 Million by Bata India Manufacturing Units.
8. Developed & introduced colour fastness proof lining textile material for Daisy Canvas Shoes by Bata India Manufacturing Units.
9. Developed shoe flex tester which is used for determination of the ability of the full shoe to withstand the effect of flexing stresses produced on the different parts of the shoes.
10. Developed new PU black jersey backing insole cover material from local supplier with same finish to replace PU Jersey backing (beige B160922110) from China as import substitution.
11. Developed 0.85 mm raised back black PU lining material from local supplier and replaced imported 1 mm black raised back PU material from China.
12. Developed single component aroma scented compound instead of mix compound for all BBG articles.
iii. In case of imported technology (imported during the last three years reckoned from the beginning of the financial year): NIL
a. the details of technology imported;
b. the year of import;
c. whether the technology been fully absorbed; and
d. if not fully absorbed, areas where absorption has not taken place, and the reasons thereof.
iv. Expenditure incurred on Research and Development:
|
 |
Capital |
: Rs. 0.99 Million |
|
 |
Recurring |
: Rs. 65.32 Million |
|
 |
Total |
: Rs. 66.31 Million |
|
(C) |
FOREIGN EXCHANGE EARNINGS AND OUTGO |
 |
|
 |
Activities relating to export |
: Rs. 109.84 Million |
|
 |
Total Foreign exchange used |
: Rs. 3,419.92 Million |
|
 |
Total Foreign exchange earned |
: Rs. 129.82 Million |
Â
|
 |
For and on behalf of the Board of Directors |
|
 |
 |
|
 |
UDAY KHANNA |
|
Place : Gurugram |
Chairman |
|
Date : May 24, 2019 |
DIN: 00079129 |
Annexure IV
ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES
[Pursuant to Section 135 of the Companies Act, 2013 and Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014]
Corporate Social Responsibility of the Company and its Policy
Your Company works on the belief that organizations should exist to serve a social purpose and enhance the lives of people connected through business. Your Company has a CSR policy in place which aims to ensure that we continue to operate our business in an economically, socially and environmentally sustainable manner, while recognizing the interests of all stakeholders. Your Company plans to take up CSR programme, which benefits the communities in and around the vicinity of its operational presence and over a period of time, resulting in enhancing the quality of life of the people in these areas.
During the financial year ended March 31, 2019, your Company focused on the following programmes: Model Schools under Bata Children's Programme (BCP)
We worked with more than 3,000 school children at 6 schools adopted under Bata Children's Programme (BCP) near our factories and Head Office. BCP is a global programme which aims to work for the children from underprivileged backgrounds and is operational in 30 countries wherever Bata is operational. The focus has been to undertake various initiatives at schools to convert them into Model Schools. A holistic programme across these schools is being implemented focusing on infrastructure upgradation, STEM programme by setting up science and computer labs, life skills programme, improving overall health of the children through regular health checkup camps and awareness sessions, sports activities, etc. Especially designed programmes on female adolescent healthcare, health & sanitation, life skills, sports and sessions on female centered issues have been given a priority for the girl child population at the schools. Separate sessions have been held with parents to encourage the education of the girl child and various other issues relevant to the overall development of their children.
Through our concentrated initiatives and extra-curricular activities, there has been an overall development of the children through a period of time. Children have become more regular in attending school. There has been an increase of 12.50 % in the attendance of children attending the Computer Classes. At one school, after Bata's support, the number of children at the school increased from 90 to 214, dropout rate reduced from 38% to 2%, teachers are able to use child friendly teaching learning pedagogy which leads to better learning environment. With implementation of better teaching methodology, nutritious meals and better facilities, the academic performance amongst the children also improved. Through our library programme, 74% of students drastically improved in their reading skills and 67% of the students in their writing skills. As a result of the Science Centres established at the schools along with science workshops, children have improved in their ability to understand scientific concepts and application of the learned concepts; they have become more aware and curious to understand alternative methods of learning. There was also an improvement in knowledge and awareness levels of children on issues of well-being, hygiene, sanitation and substance abuse.
Girl Child Empowerment through Project Nanhi Kali
In association with K. C. Mahindra Education Trust, your Company supported the education of 92 underprivileged girls under project Nanhi Kali. These girls go to Nanhi Kali academic support centres after school hours, where trained tutors engage the girls in concept based learning, focusing on Mathematics and English. Regular assessments and evaluation of these girls' learning levels is an integral part of the project along with efficient tracking of attendance. A school kit is provided to every girl annually, thereby allowing her to attend school with dignity. This kit consists of personal clothing, notebooks, stationery, a school bag, shoes, socks, a raincoat/pullover and feminine hygiene material. The Nanhi Kali team works extensively with parents and communities to sensitize them to become collective guardian of the girls.
Happy Steps Programme
As part of Preventive Healthcare, under the Happy Steps Programme of your Company, we engaged with 11956 school children across Chennai, Bengaluru and Hyderabad to conduct foot care awareness workshops. Through activities, presentations and demonstration, children were made aware on the importance of a healthy feet as the foundation of our body, on how to take care of the feet in our daily lives, foot hygiene, foot exercises, dealing with sports injuries, various foot diseases and how can we prevent them, dealing with diabetic feet, etc. A customized Bata school kit comprising of school socks, polish, laces, brush along with instructions to keep the feet healthy and clean were also distributed amongst children during the workshops.
Stride with Pride
A consumer engagement programme named 'Stride with Pride', was also introduced, wherein customers were encouraged to donate their pair of old footwear across Bata stores at selected cities. For every pair of old footwear received, Bata donated a new pair to a needy child. In order to reduce inequalities faced by socially & economically backward groups, your Company donated about 85,000 pairs of footwear to underprivileged children.
Disaster Relief & Rehabilitation
During Kerala floods, your Company, as part of the disaster relief and rehabilitation initiative, contributed to help the people in need of the hour. Rapid response teams of employees at respective regions were formed who travelled to relief camps, distributed basic essentials and footwear. Around 8,400 pairs of footwear were donated to the affected people in Kerala and at Coorg in Karnataka. Employees came forward to donate their one day's basic salary. Your Company matched the employee donation and contributed around Rs.1.40 Million to Kerala Chief Minister's Distress Relief Fund. In association with partners, your Company held medical camps in the affected regions to provide immediate and basic health services to the affected population and also focus on the prevention of epidemics in the region. With support from Global BCP Foundation, your Company is in the process to renovate 4 schools which got affected during the Kerala floods.
The CSR Policy of your Company elucidates the responsibilities of the Board of Directors and the CSR Committee thereof as well as implementation and monitoring process towards achieving the Company's CSR goals. The CSR Policy of your Company has been uploaded on the website of the Company at www.bata.in and is available at the link https://bata.in/0/pdf/CorporateSocialResponsibilityPolicy.pdf.
CSR Committee
The Board of Directors of your Company has constituted a CSR Committee of Directors in terms of the requirements of Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014 to identify, approve and monitor proper execution and implementation of the CSR Projects and CSR Activities undertaken by the Company.
Composition of CSR Committee
The Composition of the CSR Committee along with the Name and Designation of Directors as Members are detailed below. The Company Secretary acts as the Secretary to the Committee.
|
SI. No. |
Name of the Director |
Designation |
|
1. |
Mr. Akshay Chudasama |
Independent Director, Chairman of the Committee |
|
2. |
Mr. Ravindra Dhariwal |
Independent Director, Member |
|
3. |
Mr. Rajeev Gopalakrishnan |
Managing Director, Member |
|
4. |
Mr. Ram Kumar Gupta |
Director Finance and Chief Financial Officer, Member |
Details of CSR Expenditures
|
Particulars |
Amount (Rs. in Million) |
Amount (Rs. in Million) |
|
A. Net Profits of the Company for the: |
 |
 |
|
⢠financial year ended March 31, 2016 |
2,728.24 |
 |
|
⢠financial year ended March 31 , 2017 |
2,552.44 |
 |
|
⢠financial year ended March 31 , 2018 |
3,430.17 |
 |
|
B. Aggregate Net Profits of the Company for the last three financial years |
 |
8,710.85 |
|
C. Average Net Profits of the Company for the last three financial years |
 |
2,903.62 |
|
D. Prescribed CSR Expenditure (2% of amount stated in Item no. C above) |
 |
58.07 |
|
E. Details of CSR Expenditure during the financial year : |
 |
 |
|
â¢Amount spent |
 |
64.24 |
|
â¢Amount unspent |
 |
NIL |
F. Manner in which the amount spent during the financial year is detailed below:
|
SI. No. |
CSR Project /Activity identified |
Sector in which the Project is covered |
Projects or Programs (1) Local area or other (2) Specify the state and district where Projects or Programs was undertaken |
Amount Outlay (budget) Project or Programs wise (Rs. in Million) |
Amount spent on the Projects or Programs Sub-heads: (1) Direct expenditure on Projects or Programs (2) Overheads (Rs. in Million) |
Cumulative Expenditure upto the reporting period (Rs. in Million) |
Amount spent: Direct or through implementing agency |
|
1. |
Promotion of quality education in the schools: ⢠Infrastructural upgrade ⢠Celebrating Special days and events â¢Awareness workshops, health check-up camps ⢠Computer classes ⢠Science labs ⢠Sports classes ⢠Girl child education |
Promotion of Education |
Batanagar, Kolkata, West Bengal; Gurugram, Haryana; Patna, Digha, Bihar |
25.84 |
25.84 |
25.84 |
Direct |
|
Agencies: NGO - SHARP, NGO - NIIT Foundation, NGO - Katha, NGO - Rishi Chaitanya Trust (Shakti Vidya Nidhi Kosh), NGO-Agastya International Foundation, NGO - Sugam |
|||||||
|
2. |
Conducting employment enhancement vocational skills amongst underprivileged youth |
Skill Development |
Bengaluru, Karnataka; Coimbatore, Tamil Nadu |
0.71 |
0.71 |
0.71 |
Agencies: NGO - Sambhav Foundation, NGO - Centum Foundation |
|
3. |
Girl Child Education-Nanhi Kali |
Promotion of Education |
South West Delhi, South Delhi, West Delhi, New Delhi |
0.33 |
0.33 |
0.33 |
NGO-K.C. Mahindra Education Trust |
|
4. |
Happy Steps Programme-Foot Care Awareness Workshops and Activities for school children |
Preventive Healthcare, Promotion of Education |
Chennai, Tamil Nadu; Hyderabad, Telangana; Bengaluru, Karnataka; New Delhi; Kolkata, West Bengal; Patna, Bihar |
1.87 |
1.87 |
1.87 |
NGO - SHARP |
|
5. |
Stride with Pride campaign-Donation of shoes to the underprivileged children and communities at large |
Eradicating poverty & reducing inequalities faced by socially & economically backward groups, Preventive Healthcare |
Pune, Maharashtra; Bengaluru, Karnataka; Haryana; New Delhi; Kolkata, West Bengal |
32.74 |
32.74 |
32.74 |
Agencies: NGO - Sambhav Foundation, NGO- Concern India Foundation, NGO - SHARP, NGO- Indian Council for Child Welfare (ICCW), NGO - CORD NGO - Railway Children NGO-Sanshil Foundation |
|
6. |
Public toilets at metro stations |
Promoting preventive healthcare and sanitation |
South West Delhi, South Delhi, West Delhi, New Delhi |
1.34 |
1.34 |
1.34 |
Agencies: NGO - Sulabh Sanitation Mission Foundation |
|
7. |
Promotion of Sports amongst the youth from the community near our area of operations |
Community Development |
Gurugram, Haryana |
0.20 |
0.20 |
0.20 |
Agencies: District Amateur Body Building Federation |
|
8. |
Kerala Flood Relief & Rehabilitation |
Disaster relief and rehabilitation |
Wayanad, Chennganur, Thrissur, Alwaye, Kerala |
1.21 |
1.21 |
1.21 |
Agency: SEEDS (Sustainable Environment and Ecological Development Society) |
|
 |
Total |
 |
 |
64.24 |
64.24 |
64.24 |
 |
Â
Details of Implementing Agencies:
Your Company has partnered with various non-profit organizations in order to leverage upon the collective expertise, to implement CSR programmes.
a) School Health Annual Report Programme (SHARP) - Your Company partnered with them on taking up various educational health awareness workshops at schools adopted under BCP. It is registered under the Societies Registration Act, 1860 and it works with an objective of providing healthy and a hygienic environment to Government and private school children and reaches out to the community health interventions as well. SHARP being the premier NGO in the field of school health has been working in the schools, hospitals and the community for the last 15 years and has established itself as the largest School Health NGO in the country.
b) Sambhav Foundation -Your Company partnered with them to impart training on retail sales to the underprivileged youth at Bengaluru. It is registered under the Indian Trust Act, 1882 and it works towards skill development of the underprivileged youth in the communities through its NSDC (National Skills Development Corporation) certified implementing partner. It also works on the issues of prevention of disability.
c) Centum Foundation - Your Company partnered with them to impart training on retail sales to the youth at Coimbatore. It is registered under the provisions of the Societies Registration Act, 1860 and is engaged in the activities of vocational training and implementing other projects of social importance and committed to build an empowered India by providing skills for employability through Centum WorkSkills India (Centum WSI), NSDC certified implementing partner.
d) Sulabh Sanitation Mission Foundation (SSMF) - Your Company partnered with them to build public toilets at metro stations in Delhi. It is registered under the Societies Registration Act, 1860 and has been a pioneer organization to work on providing health & sanitation facilities to the communities.
e) Delhi Metro Rail Corporation (DMRC) - Your Company partnered with them to build public toilets at metro stations in Delhi. The Delhi Metro has been instrumental in ushering in a new era in the sphere of mass urban transportation in India. The Delhi Metro Rail Corporation Limited (DMRC) was registered on 3rd May, 1995 under the Companies Act, 1956 with equal equity participation of the Government of the National Capital Territory of Delhi (GNCTD) and the Central Government to implement the dream of construction and operation of a world-class Mass Rapid Transport System (MRTS).
f) NIIT Foundation - Your Company partnered with them to implement computer project for the children in the schools. It is registered organisation under the Societies Registration Act, 1860 and is a pioneer in IT Education.
g) Sugam NGO - Your Company partnered with them to support a non-formal school for the underprivileged children in a slum area in Gurgaon. Sugam NGO is a non-profit registered under the Societies Registration Act, 1860.
h) Rishi Chaitanya Trust (Project- Shakti Vidya Nidhi Kosh) - Your Company partnered with them to support education for the girl child and donation of shoes to underprivileged girls. It is registered under the Indian Trust Act, 1882. The project for which the support has been provided during the year is called Shakti Vidya Nidhi Kosh, which works for empowerment of girl child at a Pan India level by running schools for them, imparting training on various vocational skills, sponsoring marriage of orphan girls, etc.
i) Agastya International Foundation - Your Company partnered with them to set up science centres in the schools. It is a registered Trust founded in April 1999 that runs one of the world's largest mobile hands-on science education programme for economically disadvantaged children and Government school teachers. Through all its programmes, Agastya has reached over 10 million children and 2,50,000 teachers in 18 states across India.
j) Sustainable Environment and Ecological Development Society (SEEDS) - Your Company collaborated with them to hold medical camps in flood affected areas in Kerala and footwear donation. Your Company is also renovating 4 schools at Kerala with the expertise of SEEDS. The organization is registered under the Societies Registration Act, 1860 and a humanitarian non-profit organization working to make vulnerable communities resilient to disasters. SEEDS is the first and the only NGO in India, working in humanitarian response, to be certified by Geneva based Humanitarian Accountability Partnership (HAP) and is signatory to the Code of Conduct for the International Red Cross and Red Crescent Societies.
k) Katha -Your Company partnered with them to set up libraries at schools in order to enhance the reading and writing skills amongst the school children. It is registered under the Societies Registration Act, 1860. An innovative programme to help India's underserved children stay in school and complete their education by making learning fun, training teachers to be more engaging, and transforming schools. In 2013, Katha was awarded the Millennium Alliance Award for innovative programme by USAID and the Government of India.
I) K. C. Mahindra Education Trust - Your Company partnered with them to support project Nanhi Kali- education of underprivileged girl child. It is registered under Bombay Public Trusts Act, 1950. It has transformed the destinies of over 3,50,000 underprivileged girls in some of the most deprived rural, tribal and urban poor areas across India. Project Nanhi Kali is jointly managed by K. C. Mahindra Education Trust and Naandi Foundation.
m) Ingenuity EduLabs LLP - Your Company partnered with them to conduct creative science workshops across schools. Under the programme, "I Love Science" a unique science education model conceptualized and designed to help children develop interest in science while having fun; the main focus is to allow hands on science experiments for children, using low cost material.
G. Responsibility Statement
On behalf of the CSR Committee, we hereby affirm that the implementation and monitoring of CSR Policy is in compliance with the CSR objectives and Policy of the Company.
|
 |
RAJEEV GOPALAKRISHNAN |
AKSHAY CHUDASAMA |
|
Place : Gurugram |
Managing Director |
Independent Director & Chairman - CSR Committee |
|
Date : May 24, 2019 |
DIN: 03438046 |
DIN: 00010630 |
Annexure V
Information pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
(i) The ratio of the remuneration of each Executive Director to the median remuneration of the employees of the Company for the financial year 2018-19 along with the percentage increase in Remuneration of each Executive Director and Key Managerial Personnel (KMP) during the financial year 2018-19:
|
SI. No. |
Name of Director and KMP |
Designation |
Ratio of remuneration of each Director / KMP to the Median Remuneration of Employees |
Percentage increase in Remuneration |
|
1. |
Mr. Rajeev Gopalakrishnan* |
Managing Director |
63.02 |
2.42% |
|
2. |
Mr. Sandeep Kataria* |
Whole-time Director and Chief Executive Officer |
51.75 |
1.72% |
|
3. |
Mr. Ram Kumar Gupta* |
Director Finance and Chief Financial Officer |
32.25 |
15.05% |
|
4. |
Mr. Arunito Ganguly* |
Assistant Vice President, Company Secretary & Compliance Officer |
3.90 |
0% |
* Mr. Arunito Ganguly was appointed with effect from December 15, 2017 and there was no subsequent increase in his remuneration during the financial year 2018-19.
* Increased remuneration of Mr. Rajeev Gopalakrishnan, Mr. Sandeep Kataria and Mr. Ram Kumar Gupta are effective from January 1, 2018.
Notes:
a) The Independent Directors of the Company are entitled to sitting fee and commission on Net Profits as per statutory provisions of the Companies Act, 2013 and as per terms approved by the Members of the Company. The details of remuneration of the Independent Directors of the Company have been provided in the Corporate Governance Report. The ratio of remuneration and percentage increase for the Independent Directors' Remuneration is, therefore, not considered for the purpose above.
b) Percentage increase in remuneration indicates annual total compensation increase, as recommended by the Nomination and Remuneration Committee and duly approved by the Board of Directors of the Company.
c) Employees for the purpose above include all employees excluding employees governed under collective bargaining process.
(ii) The percentage increase in the median remuneration of employees in the financial year 2018-19 was 11.49%. (iii) There were 4,890 permanent employees on the rolls of the Company as on March 31, 2019.
(iv) Average percentage increase made in the salaries of employees other than the KMP in the previous financial year was 11.38%, whereas the average percentage increase in remuneration of the KMP was 4.56%. The average increase of remuneration every year is an outcome of the Company's market competitiveness as against similar Companies. The increase of remuneration this year is a reflection of the compensation philosophy of the Company and in line with the benchmarking results.
(v) It is hereby affirmed that the remuneration paid to all the Directors, KMP, Senior Managerial Personnel and all other employees of the Company during the financial year ended March 31, 2019, were as per the Nomination and Remuneration Policy of the Company.
|
 |
For and on behalf of the Board of Directors |
|
 |
UDAY KHANNA |
|
Place : Gurugram |
Chairman |
|
Date : May 24, 2019 |
DIN: 00079129 |
Annexure VI
Statement of particulars of Employees pursuant to the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment  and Remuneration of Managerial Personnel) Rules, 2014 for the year ended March 31, 2019
Top 10 Employees including those Employed throughout the financial year under review and were in receipt of remuneration aggregating not less than Rs. 1,02,00,000 per annum
|
SI. No. |
Name |
Designation |
Nature of Employment, whether contractual or otherwise |
Qualification |
Age (in years) |
Date of Appointment |
Experience - No. of years including previous employment |
Remuneration (Rs. in Million) |
Last Employment-Designation |
|
1. |
Rajeev Gopalakrishnan |
Managing Director |
Permanent |
B. Tech.- Mechanical Engineering |
54 |
31-01-2011 |
28 |
53.22 |
Bata Bangladesh Ltd. -Managing Director |
|
2. |
Sandeep Kataria |
Whole-time Director and Chief Executive Officer |
Permanent |
B. Tech. - Chemical Engineering, PG Diploma in Business Management |
49 |
01-08-2017 |
28 |
33.90 |
Chief Commercial Officer -Vodafone |
|
3. |
Ram Kumar Gupta |
Director Finance and Chief Financial Officer |
Permanent |
B. Com.(Hons.), FCA |
60 |
01-07-2015 |
39 |
24.92 |
Bata Shoe Company (Kenya) Ltd. - Director Finance |
|
4. |
Matteo Lambert |
Chief Collection Manager |
Permanent |
Bachelor Degree in Literature and Social Studies |
47 |
06-06-2013 |
20 |
21.65 |
ARTSANA- Purchase Manager |
|
5. |
Sanjay Kanth |
Sr. Vice President -Manufacturing & Sourcing |
Permanent |
B.A. - Economics, Diploma in Marketing Mgmt, MBA-Operations, MDP |
57 |
02-07-2012 |
34 |
17.19 |
Adidas Technical Services Pvt. Ltd. - Head of Operations |
|
6. |
Rossano Fogarin |
Head - Product Development |
Permanent |
Diploma Course in Shoes Designing, Diploma Course in Planning - CAD / CAM |
58 |
22-01-2018 |
37 |
14.30 |
Product development & Technical Manager - PT. Sepatu Bata Tbk. |
|
7. |
Anand Narang |
Vice President-Marketing & Customer Services |
Permanent |
B.E. - Electronics & Electrical Engineering, PG. Diploma in Mgmt - Marketing & International Business |
46 |
01-06-2016 |
25 |
13.54 |
Reliance JIO (INDIA) |
|
8. |
Kumar Sambhav Verma |
Head of Omni Channel -Asia |
Permanent |
B.Com., PG Diploma in Marketing Management |
39 |
08-03-2010 |
20 |
10.04 |
Home Shops 18 -Senior Manager - Marketing (Category) |
|
9. |
Vikas Baijal |
Senior Vice President- HR |
Permanent |
B. Sc., Master of Social Work |
51 |
13-01-2014 |
29 |
8.98 |
Bharat Hotel Ltd - Vice President -HR |
|
10. |
Raman Krishnamoorthy |
Vice President - IT |
Permanent |
B.Com., ICWAI |
55 |
25-09-2013 |
31 |
8.84 |
Vesuvius India Ltd. -Regional PM-APAC IT |
Employees those Employed for part of the financial year under review and were in receipt of remuneration not less than Rs. 8,50,000 per month.
|
SI. No. |
Name |
Designation |
Nature of Employment, whether contractual or otherwise |
Qualification |
Age (in years) |
Date of Appointment / Resignation |
Experience -No. of years including previous employment |
Remuneration (Rs. in Million) |
Last Employment -Designation |
|
1. |
Bishwanath Ganguly |
Senior Vice President -Brands |
Permanent |
B. Sc., PG Diploma in Business Management-Marketing, PG Diploma Programme in Garment Manufacturing Technology |
46 |
19-03-2019 |
19 |
4.57 |
Country Manager-Forever New Apparels Pvt. Ltd. |
Notes:
1. Remuneration as shown above includes, inter alia, Company's contribution to provident funds, pension funds, house rent allowance, leave travel facility, medical insurance premium and taxable value of perquisites.
2. None of the employees mentioned above is a relative of any Director of the Company.
3. None of the employees has drawn in excess of remuneration drawn by MD / WTD and holds along with spouse and dependent children not less than 2% of the Equity Shares of the Company as on March 31, 2019.
|
 |
For and on behalf of the Board of Directors |
|
 |
UDAY KHANNA |
|
Place : Gurugram |
Chairman |
|
Date : May 24, 2019 |
DIN: 00079129 |
Annexure VII
BUSINESS RESPONSIBILITY REPORT SECTION
A: GENERAL INFORMATION ABOUT THE COMPANY
|
1. |
Corporate Identity Number (CIN) of the Company: |
L19201WB1931PLC007261 |
|
2. |
Name of the Company: |
Bata India Limited |
|
3. |
Registered address: |
27B, Camac Street, 1st Floor, Kolkata - 700016, West Bengal |
|
4. |
Website: |
www.bata.in |
|
5. |
E-mail id: |
corporate.relations@bata.com |
|
6. |
Financial Year reported: |
April 1, 2018 -March 31, 2019 |
|
7. |
Sector(s) that the Company is engaged in (industrial activity code-wise): |
Footwear & Accessories: NIC Code -47713 Footwear- Non Retail: NIC Code -46413 |
|
8. |
List three key products / services that the Company manufactures / provides (as in balance sheet): |
Footwear & Accessories |
|
9. |
Total number of locations where business activity is undertaken by the Company: |
 |
|
a. |
Number of International Locations: |
None |
|
b. |
Number of National Locations: |
The Company has 4 operational manufacturing units located at (i) Batanagar, Kolkata, West Bengal, (ii) Bataganj - Patna, Bihar, (iii) Peenaya Industrial Area, Bengaluru, Karnataka (iv) Batashatak, Hosur, Tamil Nadu and also operates through more than 1400 retail stores across cities /towns in India. |
|
10. |
Markets served by the Company: |
The Company has its retail presence mainly in the Metro cities, A-1 cities, Tier I, Tier II and Tier III cities across India. For non-urban areas, the Company sells its footwear through its network of more than 325 distributors. |
SECTION B: FINANCIAL DETAILS OF THE COMPANY
|
1. |
Paid-up Capital: |
Rs. 642.64 Million |
|
2. |
Total Turnover: |
Rs. 29,284.44 Million |
|
3. |
Total profit after taxes: |
Rs. 3,296.60 Million |
|
4. |
Total Spending on Corporate Social Responsibility (CSR) as percentage of profit after tax (%): |
Rs. 64.24 Million, i.e., 2% of profit after tax |
|
5. |
List of activities in which CSR expenditures have been incurred: |
The details of CSR activities undertaken by the Company and CSR expenditures incurred thereon during the financial year 2018-19 by the Company have been provided in page no 23 of the Board's Report and also in the 'Annual Report on CSR Activities', annexed to the Board's Report marked as Annexure IV. |
SECTION C: OTHER DETAILS
|
1. |
Does the Company have any Subsidiary Company / Companies? |
Yes. The Company has three Wholly Owned Subsidiaries (WOSs) as on March 31, 2019, viz., (i) Bata Properties Limited; (ii) Coastal Commercial & Exim Limited; and (iii) Way Finders Brands Limited. |
|
2. |
Do the Subsidiary Company / Companies participate in the BR Initiatives of the parent Company? |
The operations of these WOSs being insignificant, presently there is no direct participation by these WOSs in the BR initiatives of the parent Company. |
|
3. |
Do any other entity / entities (suppliers, distributors, etc.) that the Company does business with, participate in the BR initiatives of the Company? If yes, then indicate the percentage of such entity / entities? [Less than 30%, 30 - 60%, More than 60%] |
Yes. The Company actively supports and encourages its suppliers and other stakeholders to participate in the BR initiatives of the Company. The Company ensures prohibition of child labour and forced labour in its workplaces and refrain itself from engaging with such vendors, suppliers and distributors who engage child labour or forced labour in their business operations. At present the Company does not have any established mechanism to ascertain the level of participation of the vendors, suppliers, distributors, etc. in various BR initiatives of the Company. Hence, it is difficult to quantify the percentage of such entities for disclosure purposes. |
SECTION D: BR INFORMATION
|
1. |
Details of Director responsible for BR: |
 |
|
(a) |
Details of the Director responsible for implementation of the BR policies: |
|
|
1. DIN: |
03438046 |
|
|
2. Name: |
Mr. Rajeev Gopalakrishnan |
|
|
3. Designation: |
Managing Director |
|
Â
|
(b) |
Details of the BR Head: |
 |
|
SI. No. |
Particulars |
Details |
|
1. |
DIN: |
03438046 |
|
2. |
Name: |
Mr. Rajeev Gopalakrishnan |
|
3. |
Designation: |
Managing Director |
|
4. |
Telephone Number: |
(0124)3990100 |
|
5. |
E-mail id: |
head.brinitiatives@bata.com |
2. Principle-wise (as per NVGs) BR policies
(a) Details of compliance (Reply in Y / N)
|
 |
 |
Business Ethics |
Product Responsibility |
Wellbeing of Employees |
Stakeholder's Engagement & CSR |
Human Rights |
Environment |
Public Policy |
CSR |
Customer Relation |
|
SI. No. |
Questions |
P |
P |
P |
P |
P |
P |
P |
P |
P |
|
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
||
|
1. |
Do you have policy/policies for....? |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
|
2. |
Has the policy being formulated in consultation with the relevant stakeholders? |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
|
3. |
Does the policy conform to any national / international standards? If yes, specify? (50 words) |
The policies of the Company generally conform to the principles of the National Voluntary Guidelines (NVGs) on Social, Environmental and Economic Responsibilities of Business, issued by the Ministry of Corporate Affairs (MCA), Government of India. |
||||||||
|
4. |
Has the policy being approved by the Board? If yes, has it been signed by MD / owner / CEO / appropriate Board Director ? |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
|
5. |
Does the Company have a specified committee of the Board / Director / Official to oversee the implementation of the policy? |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
|
6. |
Indicate the link for the policy to be viewed online? |
The policies which are mandatorily required to be uploaded on the website of the Company have been uploaded on www.bata.in and are available at the link https://bata.in/bataindia/a-31_s-181_c-42/investor-relations.html under the "Investor Relations" category. |
||||||||
|
7. |
Has the policy been formally communicated to all relevant internal and external stakeholders? |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
|
8. |
Does the Company have in- house structure to implement the policy/ policies?* |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
|
9. |
Does the Company have a grievance redressal mechanism related to the policy / policies to address stakeholders' grievances related to the policy / policies? |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
|
10. |
Has the Company carried out independent audit / evaluation of the working of this policy by an internal or external agency?** |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
Y |
* The Company also takes inputs / support from outside agencies, whenever considered necessary, in preparation and implementation of respective Policies in order to adopt the best industry practices. ** Audit / evaluation of the working of these Policies had been conducted by the Internal Audit Team of the Company.
(b) If answer to the question at serial number 1 against any principle, is 'No', please explain why:
Not Applicable.
3. Governance related to BR
|
a. |
Indicate the frequency with which the Board of Directors, Committee of the Board or CEO to assess the BR performance of the Company. Within 3 months, 3-6 months, Annually, More than 1 year. |
The Board of Directors of the Company has constituted a 'Business Responsibility Committee' to access the BR performance on an on-going basis and BR Head updates the committee. A detailed presentation is made before the Board of Directors on an annual basis. |
|
b. |
Does the Company publish a BR or a Sustainability Report? What is the hyperlink for viewing this report? How frequently is it published? |
This is the third BR Report of the Company for publication. The BR Reports may be viewed on the website of the Company www.bata.in and the same is available at the link https://bata.in/bataindia/a-29_s-181_c-42/investorrelations.html. The Company is publishing the BR Report annually. |
SECTION E: PRINCIPLE-WISE PERFORMANCE
PRINCIPLE 1: BUSINESS SHOULD CONDUCT AND GOVERN THEMSELVES WITH ETHICS, TRANSPARENCY AND ACCOUNTABILITY
1. Does the policy relating to ethics, bribery and corruption cover only the Company? Yes / No. Does it extend to the Group / Joint Ventures / Suppliers / Contractors / NGOs / Others?
The Company considers Corporate Governance as an integral part which leads to increase in operational efficiencies and sustained long term value creation for all the stakeholders. The Board of Directors of the Company has adopted a Code of Conduct and Business Ethics (along with Anti-Bribery and Anti-Corruption Directives). The Company has introduced a vigil mechanism system across all its functions and establishments through a Whistle Blower Policy as approved by the Board of Directors of the Company and has uploaded the Whistle Blower Policy on the website of the Company i.e., www.bata.in. The Code of Conduct is applicable to the Board of Directors and all employees of the Company and its subsidiaries. An annual affirmation on compliance and adherence to the Code of Conduct and Business Ethics is obtained from the Directors and Senior Managerial Personnel including Functional Heads. The Anti-Bribery and Corruption Directive and the Ethical View Reporting Policy also extends to the Company's business partners, e.g., suppliers, vendors, distributors, contractors, etc.
2. How many stakeholder complaints have been received in the past financial year and what percentage was satisfactorily resolved by the management? If so, provide details thereof, in about 50 words or so.
In addition to the introduction of vigil mechanism to enable all stakeholders to freely communicate their grievances, the Company has also implemented its Policy under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and uploaded the same on the website of the Company, www.bata.in. The Company has also created an exclusive e-mail id: share.dept@bata.com, to enable the Members / Investors of the Company to communicate their grievances directly.
The details of investor's complaints received and resolved during the year under review have been provided in the Corporate Governance Report which forms part of this Annual Report.
PRINCIPLE 2: BUSINESS SHOULD PROVIDE GOODS AND SERVICES THAT ARE SAFE AND CONTRIBUTE TO SUSTAINABILITY THROUGHOUT THEIR LIFECYCLE
1. List up to 3 of your products or services whose design has incorporated social or environmental concerns, risks and / or opportunities.
i. The Company is manufacturing Safety Shoes for the end consumers of various organizations where it is sold.
ii. The Company has also replaced Natural Rubber & Leather with synthetic EVA (Ethylene Vinyl Acetate) in sole making & PU coated PVC in shoe upper making respectively, thereby contributing towards natural resource conservation.
iii. The Company has also introduced usages of recycled waste rubber from tyre Industries for rubber outsole making in collaboration with Austin Rubber, U.S.A.
iv. The Company has also replaced Natural Fossil Fuel by eco-friendly Bio-Mass waste materials for operation of Boiler.
2. For each such product, provide the following details in respect of resource use (energy, water, raw material etc.) per unit of product (optional):
(a) Reduction during sourcing / production / distribution achieved since the previous year throughout the value chain?
|
Consumption per unit of Production* |
Current Financial Year 2018-19 |
Previous Financial Year 2017-18 |
|
Electrical Energy (Kwh per pair of Shoes) |
0.58 |
0.56 |
|
Thermal Energy (Equivalent kwh per pair of shoes) |
0.49 |
0.48 |
|
CO2 Emission (Kg CO2 per pair of Shoes) [consider : 0.537 kg CO2/1 kwh Grid electricity & 0.268 kg CO2/ kwh fuel oil] |
0.44 |
0.43 |
* Consumption per unit has marginally increased during the year under review due to ongoing modernisation / renovation work at the factories.
(b) Reduction during usage by consumers (energy, water) has been achieved since the previous year?
Although the shoe manufacturing process does not have broad based impact on energy, yet the Company continuously takes appropriate measures to reduce the consumption of thermal, electrical energy and water. The Company has installed modern and efficient machineries across its manufacturing units and has been able to save energy and water. The Company has initiated installation of LED lights, automatic power sensors, continued usage of recycled treated water from sewage treatment plant for sanitation thus resulting in reduction of water consumption. Further, Turbo Ventilators, Steam Recovery System, installation of Capacitors in HT Panel is in the process of implementation along with solar energy at Batanagar unit. The Company also continuously encourages its employees to save the natural resources wherever possible.
3. Does the Company have procedures in place for sustainable sourcing (including transportation) ?
If yes, what percentage of your inputs was sourced sustainably? Also, provide details thereof, in about 50 words or so.
Yes. The Company has established an internal mechanism for continual improvement process towards sustainable excellence and has taken adequate steps for safe transportation and optimization of logistics, which in turn is improving the Company's manufacturing system, creating a safe work place and offering opportunities to our employees to excel and explore their potential and also mitigating the impact on climate. The use of appropriate mode of transportation is a continuous part of effective supply-chain mechanism and the Company's endeavor to reduce transport related environmental impact is an ongoing process.
Major associates of the Company, who are engaged in supplying of maximum level of raw materials for shoe manufacturing process in all manufacturing units across India, are located nearby to the respective units. This helps the Company to minimize its transportation cost and environmental impact.
4. Has the Company taken any steps to procure goods and services from local& small producers, including communities surrounding their place of work ?
If yes, what steps have been taken to improve their capacity and capability of local and small vendors ?
Yes. The Company has taken necessary steps to procure goods and services from the local and small producers surrounding its manufacturing units and enhancing their capabilities for a sustainable growth. The Company always prefers to procure goods and services, e.g., Finished Goods Supplies, Security / Housekeeping / loading-unloading  operations, etc. from nearby suitable source of supply. The Company has worked out Individual Development Plan of all Units which is being continuously monitored to improve capacity, capability& quality of the products of all local & small producers.
5. Does the Company have a mechanism to recycle products and waste? If yes what is the percentage of recycling of products and waste (separately as< 5%, 5-10%, >10%). Also, provide details thereof, in about 50 words or so.
Yes. The Company has introduced the mechanism to recycle its products to reduce waste. Such initiatives of the Company include, the following:
⢠The wastes - EVA packing bags are now recycled during EVA mixing process.
⢠Rubber/ PVC / EVA wastes are recycled during mastication process.
⢠Waste water after STP at Company's Bataganj Factory is being used for gardening and road washing purposes.
⢠Used / waste oil generated from different machines in manufacturing units are sold only to the agencies approved by the Central Pollution Control Board for recycling and re-using elsewhere in other allied industries.
⢠Different scrap materials, e.g., leather cuttings / waste papers / metallic parts, etc. are being sold to the outside agencies for their uses elsewhere in other industries.
PRINCIPLE 3: BUSINESS SHOULD PROMOTE THE WELL BEING OF ALL EMPLOYEES
1. Please indicate the Total number of employees.
|
SI. No. |
Category of Manpower |
No. of employees |
|
1. |
Managerial staff |
1071 |
|
2. |
Non-managerial staff in manufacturing |
2096 |
|
3. |
Managers + Permanent employees in stores |
1723 |
|
4. |
Contracted and Third Party employees |
5406 |
|
 |
Total |
10296 |
2. Please indicate the Total number of employees hired on temporary / contractual / casual basis.
Out of the above, 5,406 persons were hired on temporary / contractual / casual basis.
3. Please indicate the Number of permanent women employees.
There are 290 permanent women employees.
4. Please indicate the Number of permanent employees with disabilities.
There are 7 permanent employees with disabilities.
5. Do you have an employee association that is recognized by management.
Yes, there are recognized trade unions in the manufacturing units of the Company as recognized by its management. These trade unions are affiliated to various central trade union bodies.
6. What percentage of your permanent employees are members of this recognized employee association?
55.64% of the Company's permanent employees are members of recognized employee associations.
7. Please indicate the Number of complaints relating to child labour, forced labour, involuntary labour, sexual harassment in the last financial year and pending, as on the end of the financial year.
During the financial year ended March 31, 2019, there were two cases reported and were dealt satisfactorily towards sexual harassment under the Policy on Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and were dealt satisfactorily. There was no pending complaints as on March 31, 2019. The Company did not receive any complaints relating to child labour, forced labour, involuntary labour.
8. What percentage of your under mentioned employees were given safety & skill up-gradation training in the last year?
(a) Permanent Employees: 83%
(b) Permanent Women Employees: 92%
(c) Casual / Temporary / Contractual Employees: 76%
(d) Employees with Disabilities: 0.0006%
PRINCIPLE 4: BUSINESS SHOULD RESPECT THE INTERESTS OF AND BE RESPONSIVE TOWARDS ALL STAKEHOLDERS, ESPECIALLY THOSE WHO ARE DISADVANTAGED, VULNERABLE AND MARGINALIZED
1. Has the Company mapped its internal and external stakeholders?
The Company understands the requirements of its various stakeholders. However, the Company is in the process of formal mapping of its key internal and external stakeholders for a better understanding of their concerns and expectations.
2. Out of the above, has the Company identified the disadvantaged, vulnerable & marginalized stakeholders.
Once the mapping is finalized, the Company will be able to identify its various categories of stakeholders and include them in the business process accordingly.
3. Are there any special initiatives taken by the Company to engage with the disadvantaged, vulnerable and marginalized stakeholders. If so, provide details thereof, in about 50 words or so.
The CSR programmes of the Company has been designed in such a manner that it ensures benefits to the poor, needy, underprivileged, deserving and the socio-economic backward communities of the society at large. The Company has been actively associated with the Bata Children's Programme (BCP) initiatives of Bata Shoe Organization (BSO) globally, towards improving the lives of the underprivileged children, especially the girl child.
PRINCIPLE 5: BUSINESS SHOULD RESPECT AND PROMOTE HUMAN RIGHTS
1. Does the policy of the Company on human rights cover only the Company or extend to the Group / Joint Ventures / Suppliers / Contractors / NGOs / Others?
Yes. The Company's Code of Ethics covers the aspects of Human Rights and is made applicable to all stakeholders including its Suppliers and Contractors by making them to sign the Code of Ethics and Code of Conduct.
2. How many stakeholder complaints have been received in the past financial year and what percent was satisfactorily resolved by the management?
During the year under review, no complaints relating to human rights violation were received by the Company.
PRINCIPLE 6: BUSINESS SHOULD RESPECT, PROTECT AND MAKE EFFORTS TO RESTORE THE ENVIRONMENT
1. Does the policy related to Principle 6 cover only the Company or extends to the Group/Joint Ventures/Suppliers / Contractors / NGOs / others.
The Company's Environment, Health & Safety (EHS) Policy extends to cover the Company and all its relevant Stakeholders, viz, Suppliers & Contractors near its operational area.
2. Does the Company have strategies / initiatives to address global environmental issues such as climate change, global warming, etc.? Y / N. If yes, please give hyperlink for webpage etc.
The Company has taken necessary steps towards reduction of GHGs emission in its manufacturing process and to reduce the concerns relating to the global warming.
3. Does the Company identify and assess potential environmental risks? Y/N
The Company has identified potential environmental risks in its manufacturing units across India through monitoring system. Required necessary steps and safeguarding measures have been taken by the Company to reduce its impact on the environment.
4. Does the Company have any project related to Clean Development Mechanism? If so, provide details thereof, in about 50 words or so. Also, if Yes, whether any environmental compliance report is filed?
No.
5. Has the Company undertaken any other initiatives on - clean technology, energy efficiency, renewable energy, etc. Y/N. If yes, please give hyperlink for web page etc.
The Company is conscious and committed to maintain environmental and ecological balances of this planet and makes its conduct subject to environment audit practices. Across all manufacturing units, sewage treatment plants are working effectively and efficiently. Since Batanagar and Bataganj factories are located on the bank of River Ganga, water discharge in the River Ganga meets the norms of the "Clean Ganga" initiatives of the Central Government. At Bataganj unit, "Zero Effluent Discharge" vision is implemented by utilizing treated effluent water for gardening & washrooms. All the factories are complying with stack emission qualities and ambient air qualities. Special thrusts are given on waste management, conservation of energy and water and natural resources.
On Water Conservation initiatives, Rain Water Harvesting Plant was established at our Peenya Industrial Area, Bengaluru, Karnataka factory during the year 2010 and it is working efficiently and effectively towards utilization of rain water. On Energy Conservation initiatives, at Batanagar factory bio-fuel based Briquette fired boiler is running efficiently & effectively by replacing fossil fuel oil fired boiler and also introduced various low energy sensitive equipments by replacing high energy consuming devices. Further, in all factories, the Company has moved to Water Based (WB) adhesives from Petroleum Solvent Based (PSB) adhesives. At Batanagar, asbestos roof are being replaced by metallic sheets in phased manner and same will be done for other manufacturing units also in near future in phases.
6. Are the Emissions / Waste generated by the Company within the permissible limits given by CPCB/SPCB for the financial year being reported?
Yes, emission / waste generated by the Company are within the permissible limits prescribed by CPCB / SPCB.
7. Number of show cause / legal notices received from CPCB / SPCB which are pending (i.e. not resolved to satisfaction) as on end of Financial Year.
The Company did not receive any show cause / legal notice from CPCB / SPCB during the financial year ended March 31, 2019 and no show cause / legal notice related to CPCB / SPCB are pending with the Company as on the end of the financial year.
PRINCIPLE 7: BUSINESS WHEN ENGAGED IN INFLUENCING PUBLIC AND REGULATORY POLICY, SHOULD DO SO IN A RESPONSIBLE MANNER
1. Is your Company a member of any trade and chamber or association? If Yes, Name only those major ones that your business deals with:
The Company believes that conducting business as a good corporate citizen of the Country enhances brand value and leads to a sustainable growth. The Company is associated with Retailers Association of India (RAI).
2. Have you advocated / lobbied through above associations for the advancement or improvement of public good? Yes / No; if yes specify the broad areas (drop box: Governance and Administration, Economic Reforms,
Inclusive Development Policies, Energy security, Water, Food Security, Sustainable Business Principles, Others)
Yes, the Company has worked with the organization in the following areas:
a. Structural changes in policies to boost growth of the footwear industry.
b. Sustainable practices in disposal of hazardous waste and on different EHS practices.
c. Elimination of unfair labour practices including child labour in the footwear industry.
PRINCIPLE 8: BUSINESS SHOULD SUPPORT INCLUSIVE GROWTH AND EQUITABLE DEVELOPMENT
1. Does the Company have specified programmes / initiatives / projects in pursuit of the policy related to Principle 8? If yes, details thereof.
The Company from its very inception, has been involved with charities and a host of philanthropic and social activities. Recognizing communities and employees as the key success factors for business prosperity, the Company remains committed to their development. The CSR initiatives of the Company ensures its commitment to operate in an economically, socially and environmentally sustainable manner, in the best interest of all the stakeholders.
Model Schools - During the financial year ended March 31, 2019, the Company focused on 6 schools, touching over 3,000 children, adopted near its areas of operations under the Company's global programme called Bata Children's Programme (BCP). In its endeavor to develop these schools into model schools in a phase wise manner, it undertook various initiatives related to infrastructure upgradation, STEM programme by setting up science and computer labs, life skills programme, improving overall health of the children through regular health checkup camps and awareness sessions, sports activities, etc. Especially designed programme on female adolescent healthcare, health & sanitation, life skills, sports and sessions on female centered issues have been given a priority for the girl child population at these schools. Separate sessions have been held with the parents to encourage the education of girl child and various other issues relevant to the overall development of their children.
Girl Child Empowerment through Project Nanhi Kali - In association with K. C. Mahindra Education Trust, the Company supported education of 92 underprivileged girls under project Nanhi Kali. These girls go to Nanhi Kali academic support centres after school hours, where trained tutors engage these girls in concept based learning, focusing on Mathematics and English. Regular assessments and evaluation of these girls' learning levels is an integral part of the project along with efficient tracking of attendance. A school kit is provided to every girl annually, thereby allowing her to attend school with dignity. This kit consists of personal clothing, notebooks, stationery, a school bag, shoes, socks, a raincoat/pullover and feminine hygiene material. The team works extensively with parents and communities to sensitize them to become collective guardians of the girls.
Happy Steps Programme for School Children -As part of Preventive Healthcare, under the Happy Steps Programme of your Company, we are engaged with 11956 school children across Chennai, Bengaluru and Hyderabad to conduct foot care awareness workshops. Through activities, presentations and demonstrations, children were made aware on the importance of a healthy feet as the foundation of our body, on how to take care of the feet in our daily lives, foot hygiene, foot exercises, dealing with sports injuries, various foot diseases and how can we prevent them, dealing with diabetic feet, etc. A customized Bata school kit comprising of school socks, polish, laces, brush along with instructions to keep the feet healthy and clean were also distributed amongst the children during the workshops.
Stride with Pride - A consumer engagement programme named 'Stride with Pride', was also introduced, wherein customers were encouraged to donate their pair of old footwear across Bata stores at selected cities. For every pair of old footwear received, Bata donated a new pair to a needy child. The campaign covered 70 schools and 27 Bata stores in couple of cities through which we have received 20,634 old footwear. In order to reduce inequalities faced by socially & economically backward groups and as part of the preventive healthcare, your Company donated more than 85,000 pairs of footwear to the underprivileged children.
Disaster Relief & Rehabilitation - During Kerala floods, the Company, as part of the disaster relief and rehabilitation initiative, contributed generously to help the people in need of the hour. Rapid response teams of employees at respective regions were formed who travelled to relief camps, distributed basic essentials and footwear. Around 8,400 footwear were donated to the affected people in Kerala and at Coorg in Karnataka. Employees came forward to donate their one day's basic salary. The Company matched the employees donation and contributed around Rs.1.40 Million to Kerala Chief Minister's Distress Relief Fund. In association with NGO partners, the Company held medical camps in the affected regions to provide immediate and basic health services to the affected population and also focused on the prevention of epidemics in the region. With support from Global BCP Foundation, the Company is in the process to renovate 4 schools which got affected during Kerala floods.
2. Are the programmes/projects undertaken through in-house team/own foundation/external NGO/government structures / any other organization?
The Company's CSR activities are undertaken by an internal dedicated team. The Company partners with Non-Governmental Organizations (NGOs), Government Institutions and well known Corporate Bodies for design and implementation of selected projects.
3. Have you done any impact assessment of your initiative?
The Company conducts periodic assessments for its projects under the CSR programmes. This includes baseline assessment and end-line surveys by the end of the project to assess the overall impact of the project. Continuous Monitoring and Evaluation (M &E) of the programmes take place throughout the year, which helps to improve the quality of the project and achieve maximum results to ensure benefits to the stakeholders.
For instance, in our school programmes, through our concentrated initiatives and extra-curricular activities, there has been an overall development of the children over a period of time. Children have become more regular to the school. There has been an increase of 12.50 % in the attendance of children attending the Computer Classes. At one school, after Bata's support, the number of children at the school increased from 90 to 214, dropout rate reduced from 38% to 2%, teachers are able to use child friendly teaching learning pedagogy which leads to better learning environment. With introduction of better teaching methodology, nutritious meals and better facilities, the academic performance amongst the children also improved noticeably.
Through our library programme, 74% of the students drastically improved in their reading skills and 67% of the students in their writing skills. As a result of the Science Centres established at the schools along with science workshops, children have improved in the ability to understand scientific concepts and application of the learned concepts; they have become more aware and curious to understand alternative methods of learning. There was also an improvement in the knowledge and awareness levels of the children on the issues of well-being, hygiene, sanitation, substance abuse, etc.
In the Nanhi Kali programme too, regular assessments and evaluation of the girls' learning levels is an integral part of the project along with efficient tracking of attendance. A school kit is provided to every girl annually, thereby allowing her to attend school with dignity. This kit consists of personal clothing, notebooks, stationery, a school bag, shoes, socks, a raincoat/pullover and feminine hygiene material. The Nanhi Kali team works extensively with parents and communities to sensitize them to become collective guardians of the girls.
4. What is your Company's direct contribution to community development projects and the details of the projects undertaken:
During the financial year ended March 31, 2019, the Company has spent a total amount of Rs. 64.24 Million towards various CSR projects as against the allocated budget of Rs. 58.07 Million. The details thereof have been provided in the "Annual Report on CSR Activities" as attached to the Board's Report. A brief summary thereof is as under:
|
SI. No. |
Focus Area |
Amount (Rs. in Million) |
|
1. |
Promotion of education in schools |
25.84 |
|
2. |
Nanhi Kali - Girl Child Education |
0.33 |
|
3. |
Happy Steps Programme - Foot care awareness |
1.87 |
|
4. |
Stride with Pride campaign |
32.74 |
|
5. |
Promotion of Sports amongst the Youth |
0.20 |
|
6. |
Promotion of preventive healthcare and sanitation |
1.34 |
|
7. |
Promotion of employment enhancement skill development |
0.71 |
|
8. |
Disaster relief and rehabilitation during Kerala floods |
1.21 |
|
 |
Total |
64.24 |
Â
Have you taken steps to ensure that this community development initiative is successfully adopted by the community? Please explain in 50 words, or so.
Before initiating a community development project, a comprehensive base line survey is conducted to identify the local needs, stakeholder commitments and it also helps in creating a buy-in from the local communities. The Company believes in participatory approach while planning and implementing the community development initiatives. The Company's CSR projects at several locations are developed in consultation and participation with various stakeholders including the local communities. Each location has an independent programme implementation committee which ensures planning and implementation of projects, periodic reviews and information sharing with stakeholders. The local committees work under the overall guidance and framework defined by the corporate CSR Team of the Company.
PRINCIPLE 9: BUSINESS SHOULD ENGAGE WITH AND PROVIDE VALUE TO THEIR CUSTOMERS AND CONSUMERS IN A RESPONSIBLE MANNER
1. What percentage of customer complaints / consumer cases are pending as on the end of financial year.
During the year under review, the Company has ensured to address and resolve customer complaints / consumer cases amicably and has further strengthened its Customer Care Team and improvised the complaints redressal processes for speedy resolution of customer complaints. The Company has received 97822 customer / consumer complaints during the year under review and have resolved 97815 complaints amicably during the financial year 2018-19. Remaining 7 (0.01%) complaints lying pending at the end of financial year has since been resolved.
2. Does the Company display product information on the product label, over and above what is mandated as per local laws? Yes / No / N.A. / Remarks (additional information)
Considering the nature of product manufactured and sold by the Company, it is not necessary to display additional product information on the product labels.
3. Is there any case filed by any stakeholder against the Company regarding unfair trade practices, irresponsible advertising and / or anti-competitive behaviour during the last five years and pending as on end of financial year. If so, provide details thereof, in about 50 words or so.
No.
4. Did your Company carry out any consumer survey / consumer satisfaction trends?
Yes, the Company has introduced a strong Customer Feedback Mechanism to capture the feedback about Customers' Shopping Experience (Net Promoter Score) through its various key retail stores, franchisee stores and e-commerce shopping experience.Â
Mar 31, 2018
BOARD''S REPORT TO THE MEMBERS
The Directors are pleased to present the 85th Annual Report covering the operational and financial performance of your Company along with the Audited Financial Statements for the financial year ended March 31, 2018.
FINANCIAL HIGHLIGHTS
(Rs. in Million)
|
Particulars |
Financial Year ended on March 31, 2018 |
Financial Year ended on March 31, 2017 |
|
(Audited) |
(Audited) |
|
|
Revenue from operations |
26363.18 |
24972.41 |
|
Other Income |
508.44 |
466.46 |
|
Total |
26871.62 |
25438.87 |
|
Profit / (Loss) before Exceptional items and Taxation |
3400.14 |
2552.44 |
|
Exceptional items- Income / (Loss) |
- |
(216.69) |
|
Profit / (Loss) before Taxation |
3400.14 |
2335.75 |
|
Provision for Taxation |
1164.36 |
748.27 |
|
Net Profit |
2235.78 |
1587.48 |
|
Other Comprehensive Income / (Loss) (net of tax) |
(160.03) |
(14.10) |
|
Total Comprehensive Income |
2075.75 |
1573.38 |
Your Company has prepared the Financial Statements for the financial year ended March 31, 2018 under Sections 129, 133 and Schedule II to the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.
During the financial year ended March 31, 2018, your Company recorded a turnover of Rs. 26363.18 Million as compared to the turnover of Rs. 24972.41 Million recorded during the previous financial year ended March 31, 2017. Revenue from operations for the year ended March 31, 2018 has increased by 6% over the corresponding period last year. The numbers are however not comparable consequent to implementation of Goods and Services Tax (GST). The Net Profit of your Company for the financial year ended March 31, 2018 stood at Rs. 2235.78 Million as against the Net Profit of Rs.1587.48 Million for the financial year ended March 31, 2017. Accordingly, the Profit before Exceptional Items and Tax for the financial year ended March 31, 2018 reflects a growth of 33% over the corresponding Profit for the financial year ended March 31, 2017. Details of the Exceptional Items for both the aforesaid financial years have been mentioned in Note No. 26 of the Notes to the Financial Statements in this Annual Report.
On a consolidated basis, your Company recorded a turnover of Rs. 26412.16 Million during the financial year ended March 31, 2018 and achieved consolidated Net Profit of Rs. 2205.13 Million for the said financial year.
Your Company continued to be India''s leading and most preferred footwear brand by developing and implementing a strong marketing strategy to support its new image and position. Last year your Company has invested in understanding consumer needs through intensive consumer interactions and research and used that knowledge in effectively delivering consumer need based solutions. We continue to build our strengths in the Comfort and Quality parameters while bringing world''s best technologies coupled with global design trends to the market.
During the year under review, your Company carefully re-engineered key touch points in the consumer journey thereby stepping up the focus on Visual Merchandising via breath taking store windows, crating a shopping conducive playlist for in store music, refreshing the store decor to highlight different brands / features and employing trained stylists to better serve our discerning customer in our top stores in Metro''s and to be gradually extended across all stores.
With a view to bring back the swagger to Bata, your Company launched its internationally developed ''Red Angela Store Concept'' in Kolkata and Delhi. This concept is aesthetically designed and offers clutter-free shopping experience through merchandise focal points (in red & white) and exudes a premium look that adds up to a ''wow'' feel.
A key focus for your Company this year has been to build the brand among the youth of the country especially the millennial. The online marketing initiative, social media presence, blogs and advertisements along with two youthful brand ambassadors Smriti Mandhana and Kriti Sanon have helped strengthen your Company''s connect among the younger consumers. With the introduction of new collections in Power, a fashion forward collection under Bata Red Label and a contemporary range of casuals for both men & women, we have seen more and more young Indians come back to our stores. Your Company is also leveraging brand North Star to connect with the youngsters in the country with very encouraging response.
Your Company''s brand popularity and consumer initiatives were recognized as ''Bata'' was conferred the IMAGES - Most Admired Footwear Brand of the Year 2017 at the 18th Annual IMAGES Fashion Awards. The brand was also featured amongst India''s buzziest brands at AFAQ''S 2017 (online portal for the marketing, advertising and media news).
SHARE CAPITAL
The Authorized Share Capital of your Company as on March 31, 2018 stands at Rs. 700,000,000/- divided into 140,000,000 equity shares of Rs. 5/- each. The Issued Share Capital of your Company is Rs. 642,850,000/divided into 128,570,000 equity shares of Rs. 5/- each and the Subscribed and Paid-up Share Capital is Rs. 642,637,700/- divided into 128,527,540 equity shares of Rs. 5/- each, fully paid-up.
DIVIDEND
Your Board recommends a dividend of Rs. 4/- per Equity Share of Rs. 5/- each (i.e. 80%) for the financial year ended March 31, 2018. The dividend, if declared, by the Members at the forthcoming Annual General Meeting (AGM) shall be paid to the eligible Members of the Company from Thursday, August 2, 2018 onwards. The total payout of aforesaid dividend would be approximately Rs. 514.11 Million, excluding the corporate dividend distribution tax, as applicable.
The recommendation of aforesaid dividend is in line with the Dividend Distribution Policy of the Company approved by your Board. The said Dividend Distribution Policy has been uploaded on the website of the Company at www.bata.in and is available at the link https://bata.in/0/pdf/DividendDistributionPolicy-BIL.pdf,
GENERAL RESERVE
The Company has not transferred any amount to the General Reserve during the financial year ended March 31, 2018.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN END OF THE FINANCIAL YEAR AND THE DATE OF REPORT
Subsequent to the end of the financial year on March 31, 2018 till date, there has been no material change and / or commitment which may affect the financial position of the Company.
CREDIT RATING
During the year under review, ICRA Limited (ICRA) has reaffirmed the Credit Rating of ''[ICRA] AA â (pronounced as ICRA double A plus) for the Non-Fund Based Facilities of your Company. The outlook on the Long Term Rating is ''Stable''.
DEPOSITS
Your Company has no unclaimed / unpaid matured deposit or interest due thereon since December 31, 2013. Your Company has not accepted any deposits covered under ''Chapter V - Acceptance of Deposits by Companiesâ under the Companies Act, 2013 during the financial year ended March 31, 2018.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
In terms of Section 186 of the Companies Act, 2013 and Rules framed there under, details of the Loans given and Investments made by your Company have been disclosed in Note No. 5 of the Notes to Financial Statements for the year ended March 31, 2018, which forms part of this Annual Report. Your Company has not given any guarantee or provided any security during the year under review.
RELATED PARTY TRANSACTIONS
During the financial year ended March 31, 2018, all transactions with the Related Parties as defined under the Companies Act, 2013 read with Rules framed there under were in the ''ordinary course of business'' and ''at arm''s lengthâ basis. Your Company does not have a ''Material Subsidiaryâ as defined under Regulation 16(1)(c) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 [''Listing Regulations'']. Your Board shall formulate a Policy to determine Material Subsidiary as and when considered appropriate in the future.
During the year under review, your Company did not enter into any Related Party Transactions which require prior approval of the Members. All Related Party Transactions of your Company had prior approval of the Audit Committee and the Board of Directors, as required under the Listing Regulations. Subsequently, the Audit Committee and the Board have reviewed the Related Party Transactions on a quarterly basis. Your Company has an internal mechanism for the purpose of identification and monitoring of Related Party Transactions.
During the year under review, there has been no materially significant Related Party Transactions having potential conflict with the interest of the Company.
Since all Related Party Transactions entered into by your Company were in the ordinary course of business and also on an arm''s length basis, therefore details required to be provided in the prescribed Form AOC - 2 is not applicable to the Company. Necessary disclosures required under the Ind AS 24 have been made in Note No. 37 of the Notes to the Financial Statements for the year ended March 31, 2018.
SUBSIDIARIES
The Company has three wholly owned subsidiaries viz., Bata Properties Limited, Coastal Commercial & Exim Limited and Way Finders Brands Limited.
The Annual Reports of these Subsidiaries will be made available for inspection by the Members of the Company at the Registered Office of your Company at 27B, Camac Street, 1st Floor, Kolkata - 700016, West Bengal between 11:00 a.m. and 1:00 p.m. on any working day upto the date of AGM. Annual Reports along with the Audited Financial Statements of each of the Subsidiaries of your Company are also available on the website of the Company at www.bata.in. The Annual Reports of the aforesaid Subsidiaries for the financial year ended March 31, 2018 shall be provided to the Members of the Company upon receipt of written request from them.
Pursuant to the provisions of Section 129(3) of the Companies Act, 2013 read with Rule 5 of Companies (Accounts) Rules, 2014, a statement containing salient features of Financial Statements of the aforesaid Subsidiaries has been provided in Form No. AOC-1 and included in this Annual Report.
The Audited Consolidated Financial Statements (CFS) of your Company for the financial year ended March 31, 2018, prepared in compliance with the provisions of Ind AS 27 issued by the Institute of Chartered Accountants of India (ICAI) and notified by the Ministry of Corporate Affairs (MCA), Government of India also forms part of this Annual Report.
EXTRACT OF ANNUAL RETURN
The extract of Annual Return in the Form No. MGT-9 as on March 31, 2018 is annexed to this Board''s Report and marked as Annexure I.
AUDIT AND AUDITORS
In terms of the provisions of Section 139 of the Companies Act, 2013 read with provisions of the Companies (Audit and Auditors) Rules, 2014 as amended, M/s. B S R & Co. LLP, Chartered Accountants (ICAI Firm Registration No. 101248W/W-100022) was appointed as the Auditors of the Company for a consecutive period of 5 years from conclusion of the 84th AGM held in the year 2017 until conclusion of the 89th AGM of the Company scheduled to be held in the year 2022.
The Members may note that consequent to the changes made in the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014 by the Ministry of Corporate Affairs (MCA) vide notification dated May 7, 2018, the proviso to Section 139(1) of the Companies Act, 2013 read with explanation to sub-rule 7 of Rule 3 of the Companies (Audit and Auditors) Rules, 2014, the requirement of ratification of appointment of Auditors by the Members at every AGM has been done away with. Therefore, the Company is not seeking any ratification of appointment of M/s. B S R & Co. LLP, Chartered Accountants as the Auditors of the Company, by the Members at the ensuing AGM.
Your Company has received a certificate from M/s. B S R & Co. LLP, Chartered Accountants confirming their eligibility to continue as Auditors of the Company in terms of the provisions of Section 141 of the Companies Act, 2013 and the Rules framed there under. They have also confirmed that they hold a valid certificate issued by the Peer Review Board of the ICAI as required under the provisions of Regulation 33 of the Listing Regulations.
Secretarial Auditor
In terms of the provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Board at its meeting held on February 9, 2018 appointed M/s. P. Sarawagi & Associates, Company Secretaries, 27, Brabourne Road, Kolkata - 700001, as the Secretarial Auditor of the Company, to conduct the Secretarial Audit for the financial year ended March 31, 2018 and to submit Secretarial Audit Report in Form No. MR-3.
A copy of the Secretarial Audit Report received from M/s. P. Sarawagi & Associates in the prescribed Form No. MR-3 is annexed to this Board''s Report and marked as Annexure II.
Qualification, reservation or adverse remark in the Auditor''s Reports and Secretarial Audit Report
There is no qualification, reservation or adverse remark made by the Auditors in their Reports to the Financial Statements (both Standalone and Consolidated) or by the Secretarial Auditor in his Secretarial Audit Report for the financial year ended March 31, 2018.
SIGNIFICANT AND MATERIAL LITIGATIONS / ORDERS
During the year under review, there were no significant material orders passed by the Regulators / Courts and no litigation was outstanding as on March 31, 2018, which would impact the going concern status and future operations of your Company. The details of litigation on tax matters are disclosed in the Auditor''s Report and Financial Statements which forms part of this Annual Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
In compliance with the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, a statement containing information on conservation of energy, technology absorption, foreign exchange earnings and outgo of the Company, in the prescribed format, is annexed to this Board''s Report and marked as Annexure III.
RESEARCH AND DEVELOPMENT ACTIVITIES AND ENERGY CONSERVATION
Research and Development activities during the year under review continued to emphasize on creating a pollution-free and a safe work environment. Technological improvement in product development, material development, introduction of new footwear moulds, process improvement, etc. were the key focus area to improve quality of footwear and productivity in manufacturing. During the year under review, an expenditure of Rs. 57.93 Million was incurred on Research and Development (including product development initiatives), as against Rs. 59.60 Million during the financial year 2016-17. Research and Development Centres at Batanagar, Batagunj & Bata Shatak manufacturing units across India, are approved by the Department of Science & Technology, Government of India.
The Company has adopted a series of energy conservation measures like continuously replacing conventional tubes with energy efficient LED lights, installation of energy efficient Variable Frequency Drive (VFD) motors in conveyors etc. at its Manufacturing Units across India. Such energy saving measures led to a saving of energy cost worth approx. Rs. 3.64 Million during the year under review. Your Company shall continue to invest on Research and Development activities and energy saving measures in its manufacturing units in the future as well.
CORPORATE SOCIAL RESPONSIBILITY
Your Board has constituted a Corporate Social Responsibility (CSR) Committee of the Board under the Chairmanship of an Independent Director. A CSR sub-committee comprising of Senior Executives of the Company and a dedicated CSR team undertake and monitor all CSR projects of your Company. Compositions of CSR Committee of your Company and other relevant details have been provided in the Corporate Governance Report which forms part of this Annual Report.
The Company works on the belief of its founding family members that Companies should exist to serve a social purpose and enhance the quality of lives of people connected through the business. The Company has a CSR Policy in place which aims to ensure that the Company continues to operate its business in an economically, socially and environmentally sustainable manner, while recognizing the interests of all its stakeholders. It takes up CSR programmes, which benefit the communities in and around the vicinity of its operational presence resulting in enhancing the quality of lives of the people in those areas. The said CSR Policy has been uploaded on the website of the Company at www.bata.in and is available at the link https://bata.in/0/pdf/CorporateSocialResponsibilityPolicy.pdf.
In line with the Company''s value of ''Improving Lives'', it focussed on working with schools to improve quality of education, trained underprivileged youth in retail sales to enhance their employability skills, conducted foot care awareness workshops with school children and donated shoes to the underprivileged communities.
Your Company spent an amount of Rs. 71.14 Million during the financial year 2017-18 as against its 2% obligation amounting to Rs. 55.80 Million, thereby exceeding its entire CSR obligation. Your Company made significant strides to harness all its resources towards successful execution of the CSR projects across all locations.
Schools - Bata Children''s Programme (BCP)
During the year, the Company worked with around 3,000 children in 6 schools across the country near its area of business operations. With the focus on promotion of girl child education, programmes were formulated and implemented towards development of the girl child.
The Company upgraded infrastructure in schools through classroom renovation, providing classroom furniture, and promoting STEM (Science, Technology, Engineering and Math) education by setting up computer and science labs. The Company also partnered with an organization on the project ''I Love Science'' which conducts creative science workshops with the children to remove the fear of science and make it interesting for them using custom Science Kits. In schools, as part of the preventive healthcare programme and promotion of life skills, the Company conducted workshops for the children like menstrual hygiene and good touch bad touch for girl child, personal hygiene, substance abuse, nutrition, etc. The Company also sponsored health checkup camps in various schools as part of the preventive healthcare programme.
Your Company believes that education should be holistic and integral touching upon physical, emotional and aesthetic development in addition to academics. Thus, while working on improving academics, the Company also focuses on the overall development of the child by providing opportunities to get involved in extra-curricular activities like sports, arts and crafts, competitions, educational tours, etc. Children were also involved in self-defence classes.
Empowering the girl child through specially designed Ballerinas
Continuing its commitment towards the betterment of the society, the Company launched its unique CSR campaign the ''Ballerina Project'' at the Bata Store in South City Mall, Kolkata in March 2018. Focussed on girl child empowerment, the Ballerina Project by Bata aims to create a substantial positive effect for social and economic fabric. The project will be initiated first in India in association with Project Nanhi Kali, an initiative which is jointly managed by the K.C. Mahindra Education Trust and Naandi Foundation.
Employability Training
Bata India''s vocational skills project is in line with Hon''ble Prime Minister''s ''Skill India Campaign'' and is based on the belief of empowering youth from the underprivileged community. Through this project, the Company aims to develop employability skills of the underprivileged youth to enable them to find good jobs, which would lead to better living standards and economic growth. The Company is in the process to train 200 youths in retail sales at Bengaluru, Coimbatore and Hyderabad.
Bata Happy Steps Programme
We worry about our teeth, eyes, and other parts of the body. We learn washing, brushing, and grooming. But we ignore our developing feet which have to carry the entire weight of the body throughout the lifetime. Just like adults, foot care for children is vital to their health and well-being. But caring for kids'' feet isn''t exactly the same as caring for our own feet. Their delicate toes and soles are still growing and therefore require special attention and proper shoes.
Child''s foot health plays an important role in ensuring proper progression into adulthood. If a child has a foot deformity or is experiencing foot pain, it is important to seek treatment from a medical professional as soon as possible. To address this need, Bata conducted awareness workshops across school children on foot care and hygiene and also provided shoes to the underprivileged communities.
CSR Partners
In our endeavor to deliver the best outcomes, we partnered with specialist organizations who are experts in their field.
|
Partner |
Specialization |
Project |
|
SHARP (School Health Annual Report Programme) |
School health programme |
BCC (Behaviour Change Communication) workshops for school children. |
|
HLFPPT (Hindustan Latex Family Planning Promotion Trust) |
School health programme |
BCC (Behaviour Change Communication) workshops for school children. |
|
NIIT Foundation |
Computer education |
''Hole in the Wall'' computer project in schools. |
|
Ingenuity EduLabs LLP |
Creative science workshops |
Science workshops with school kids |
|
Sambhav Foundation |
Vocational skills |
Training partner for retail sales |
|
Centum Foundation |
Vocational skills |
Training partner for retail sales |
|
Agastya International Foundation |
Science labs |
Science labs in schools |
Pursuant to the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 as amended, the Annual Report on CSR Activities has been annexed to this Board''s Report and marked as Annexure IV.
SUPPORT FROM BATA SHOE ORGANIZATION
Your Company continues to receive support from the Holding Company - Bata (BN) BV., Amsterdam, The Netherlands and also from Bata Shoe Organization (BSO). Your Company also enjoys the benefits of technical research through Global Footwear Services Pte. Ltd., Singapore (GFS). Your Company has renewed the Technical Collaboration Agreement with GFS with effect from January 1, 2011 for a period of ten years. In terms of the said Technical Collaboration Agreement, your Company receives guidance, training of personnel and services from GFS in connection with research & development, marketing, brand development, footwear technology, testing & quality control, store location, layout & design, environment, health & safety, risk & insurance management, etc. Your Company continues to obtain expertise and experience from the personnel of GFS and other BSO group Companies to improve its product range and operational processes throughout the year. In terms of the renewed Agreement as aforesaid, your Company has paid a technical services fee of Rs. 255.04 Million to GFS during the financial year ended March 31, 2018, which is around 1% of the Turnover of your Company.
BOARD OF DIRECTORS, BOARD MEETINGS AND KEY MANAGERIAL PERSONNEL
Your Company''s Board is duly constituted and is in compliance with the requirements of the Companies Act, 2013, the Listing Regulations and provisions of the Articles of Association of the Company. Your Board has been constituted with requisite diversity, wisdom and experience commensurate to the scale of operations of your Company.
During the year under review, a total of four Meetings of the Board of Directors of the Company were held, i.e., on May 15, 2017; August 2, 2017; November 14, 2017 and February 9, 2018. Details of Board composition and Board Meetings held during the financial year 2017-18 have been provided in the Corporate Governance Report which forms part of this Annual Report.
During the year under review, Mr. Shaibal Sinha (DIN: 00082504), who retired at the 84th AGM, was re-appointed as a Director of the Company. The Board has appointed Mr. Sandeep Kataria (DIN: 05183714) as an Additional Director of the Company with effect from November 14, 2017 to hold office upto the date of the forthcoming AGM. At the said Board Meeting, Mr. Sandeep Kataria has also been appointed as the Whole-time Director and Chief Executive Officer of the Company for a period of five years with effect from November 14, 2017, subject to approval of the Members at the forthcoming AGM. In terms of Section 152(6) of the Companies Act, 2013 read with the Articles of Association of the Company, Mr. Kataria shall be liable to retire by rotation. Being a Whole-time Director and Chief Executive Officer of the Company, Mr. Kataria is also a Key Managerial Person (KMP) of the Company in terms of the provisions of Sections 2(51) and 203 of the Companies Act, 2013.
The Company has received Notice under Section 160 of the Companies Act, 2013 from a Member of the Company signifying the candidature of Mr. Sandeep Kataria (DIN: 05183714) for his appointment as a Director of the Company at the forthcoming AGM. A brief profile along with necessary disclosures of Mr. Kataria has been annexed to the Notice convening the ensuing AGM and forms an integral part of this Annual Report. Your Board recommends appointment of Mr. Kataria as a Director and also the Whole-time Director and Chief Executive Officer of the Company.
Mr. Christopher MacDonald Kirk (DIN: 07425236), Non-Executive Director is due to retire by rotation at the ensuing AGM and being eligible, offers himself for re-appointment. A brief profile along with necessary disclosures of Mr. Christopher MacDonald Kirk has been annexed to the Notice convening the ensuing AGM and forms an integral part of this Annual Report. Your Board recommends re-appointment of Mr. Christopher MacDonald Kirk as a Director of the Company, liable to retire by rotation.
Mr. Uday Khanna, Mr. Ravindra Dhariwal, Mr. Akshay Chudasama and Ms. Anjali Bansal, Independent Directors of your Company have declared to the Board of Directors that they meet the criteria of Independence as laid down in Sections 149(6) and 149(7) of the Companies Act, 2013 and Regulation 16(1)(b) of the Listing Regulations and there is no change in their status of Independence. Your Board places on records its deep appreciation for their continuous guidance, support and contribution to the Management of the Company in its pursuit to achieve greater heights.
During the year under review, Mr. Maloy Kumar Gupta, Company Secretary & Compliance Officer, resigned from the Company with effect from October 31, 2017 and Mr. Arunito Ganguly has been appointed in his place as the Assistant Vice President, Company Secretary & Compliance Officer, with effect from December 15, 2017.
Mr. Rajeev Gopalakrishnan, Managing Director, Mr. Sandeep Kataria, Whole-time Director and Chief Executive Officer, Mr. Ram Kumar Gupta, Director Finance and Chief Financial Officer and Mr. Arunito Ganguly, Assistant Vice President, Company Secretary & Compliance Officer are the Key Managerial Personnel (KMP) of your Company.
AUDIT COMMITTEE
The Board of Directors of your Company has a duly constituted Audit Committee in terms of the provisions of Section 177 of the Companies Act, 2013 read with the Rules framed there under and Regulation 18 of the Listing Regulations. The terms of reference of the Audit Committee has been approved by the Board of Directors. Composition of the Audit Committee, number of meetings held during the year under review, brief terms of reference and other requisite details have been provided in the Corporate Governance Report which forms part of this Annual Report. Recommendations made by the Audit Committee are accepted by your Board.
NOMINATION AND REMUNERATION POLICY
Your Board has adopted a Remuneration Policy for identification, selection and appointment of Directors, Key Managerial Personnel (KMPs) and Senior Management Personnel (SMPs) of your Company. The Policy provides criteria for fixing remuneration of the Directors, KMPs, SMPs as well as other employees of the Company. The Policy enumerates the powers, roles and responsibilities of the Nomination and Remuneration Committee.
Your Board, on the recommendations of the Nomination and Remuneration Committee, appoints Director(s) of the Company based on his / her eligibility, experience and qualifications and such appointment is approved by the Members of the Company at General Meetings. Generally, the Managing Director and Whole-time Directors (Executive Directors) are appointed for a period of five years. Independent Directors of the Company are appointed to hold their office for a term of upto five consecutive years on the Board of your Company. Based on their eligibility for re-appointment, the outcome of their performance evaluation and the recommendation by the Nomination and Remuneration Committee, the Independent Directors may be re-appointed by the Board for another term of five consecutive years, subject to approval of the Members of the Company. The Directors, KMPs and SMPs shall retire as per the applicable provisions of the Companies Act, 2013 and the policy of the Company. While determining remuneration of the Directors, KMPs, SMPs and other employees, the Nomination and Remuneration Committee ensures that the level and composition of remuneration are reasonable and sufficient to attract, retain and motivate them and ensure the quality required to run the Company successfully. The relationship of remuneration to performance is clear and meets appropriate performance benchmarks and such remuneration comprises a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the Company and its goals. The Company follows a compensation mix of fixed pay, benefits, allowances, perquisites, performance linked incentives and retirement benefits for its Executive Directors, KMPs, SMPs and other employees. Performance Linked Incentive is determined by overall business performance of your Company. Annual increments are decided by the Nomination and Remuneration Committee within the salary scale approved by the Board of Directors and Members of the Company. The Company pays remuneration to Independent Directors by way of sitting fees and commission on the net profits of the Company. Non-Executive Non-Independent Directors of your Company do not accept any sitting fees / commission. Remuneration to Directors is paid within the limits as prescribed under the Companies Act, 2013 and the limits as approved by the Members of the Company, from time to time.
The aforesaid Nomination and Remuneration Policy has been uploaded on the website of the Company at www.bata.in and is available at the link https://bata.in/0/pdf/Remuneration-Policy_2015.pdf. Your Company conducts a Board Evaluation process for the Board of Directors as a whole, Board Committees and also for the Directors individually through self-assessment and peer assessment. The details of Board evaluation for the financial year 2017-18 have been provided in the Corporate Governance Report which forms part of this Annual Report.
DISCLOSURES ON REMUNERATION OF DIRECTORS AND EMPLOYEES OF THE COMPANY
Information as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, and subsequent amendments thereto, is annexed to this Board''s Report and marked as Annexure V.
A statement containing the information of top ten employees in terms of remuneration drawn and particulars of every employee of the Company, who was in receipt of remuneration not less than the limits specified under Section 197(12) of the Companies Act, 2013 read with Rules 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and subsequent amendments thereto, is annexed to this Board''s Report and marked as Annexure VI.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to provisions of Section 134 of the Companies Act, 2013, the Directors, to the best of their knowledge and belief, hereby confirm that:
(a) in the preparation of the annual accounts, the applicable accounting standards had been followed;
(b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2018 and of the profit of the Company for that period;
(c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) they have prepared the annual accounts on a going concern basis;
(e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
(f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.
WHISTLE BLOWER POLICY / VIGIL MECHANISM
In terms of provisions of Section 177 of the Companies Act, 2013 and Rules framed there under read with Regulation 22 of the Listing Regulations, your Company has a vigil mechanism in place for the Directors and Employees of the Company through which genuine concerns regarding various issues relating to inappropriate functioning of the organization can be communicated. For this purpose, your Board adopted a Whistle Blower Policy which has been uploaded on the website of the Company at www.bata.in and is available at the link https://bata.in/0/pdf/Bata-WhistleBlowerPolicy,pdf, A Vigil Mechanism Committee under the Chairmanship of the Audit Committee Chairman has been constituted. The Policy provides access to the Legal Head of the Company and to the Chairman of the Audit Committee.
No person has been denied an opportunity to have access to the Vigil Mechanism Committee and the Audit Committee Chairman.
POLICY ON PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company has adopted a Policy under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed there under. Your Company is committed to provide a safe and secure environment to its women employees across its functions and other women stakeholders, as they are considered as integral and important part of the Organization.
An Internal Complaints Committee (ICC) with requisite number of representatives has been set up to redress complaints relating to sexual harassment, if any, received from women employees and other women associates. All employees (permanent, contractual, temporary, trainees) are covered under this policy, which also extends to cover all women stakeholders of the Company.
The following is a summary of sexual harassment complaints received and disposed off satisfactorily during the financial year ended March 31, 2018:
- No. of Complaints received : 2
- No. of Complaints disposed off : 2
Your Company has been conducting awareness campaign across all its manufacturing units, warehouses, retail stores and office premises to encourage its employees to be more responsible and alert while discharging their duties.
RISK MANAGEMENT AND ADEQUACY OF INTERNAL FINANCIAL CONTROLS
Your Companyâs internal financial control ensures that all assets of the Company are safeguarded and protected, proper prevention and detection of frauds and errors and all transactions are authorized, recorded and reported appropriately. Your Company operates through definitive Chart of Authorities (COAs) and Standard Operating Procedures (SOPs) in respect of its operations including financial transactions. Such COAs and SOPs are regularly monitored and if required, modified from time to time depending on business requirements.
Your Company has an adequate system of internal financial controls commensurate with its size and scale of operations, procedures and policies, ensuring orderly and efficient conduct of its business, including adherence to the Company''s policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records, and timely preparation of reliable financial information.
Such practice provides reasonable assurance that transactions are recorded as necessary to permit preparation of Financial Statements in accordance with the applicable legislations and that the same are well within the COAs and SOPs, without exception. Your Company also monitors through its Internal Audit Team the requirements of processes in order to prevent or timely detect unauthorized acquisition, use or disposition of the Company''s Assets which could have a material effect on the Financial Statements of the Company. The Internal Audit function is responsible to assist the Audit Committee and Risk Management Committee on an independent basis with a complete review of the risk assessments and associated management action plans.
Risk Management is embedded in the Company''s operating framework. Your Company believes that risk resilience is key to achieving higher growth. To this effect, there is a robust process in place to identify key risks across the Company and prioritize relevant action plans to mitigate these risks. Risk Management framework is reviewed periodically by the Board and the Audit Committee and Risk Management Committee, which includes discussing the management submissions on risks, prioritizing key risks and approving action plans to mitigate such risks.
The Internal Audit Report and Risk Inventory Report are reviewed periodically by the Audit Committee of the Board of Directors. The Chief Internal Auditor is a permanent invitee to the Audit Committee Meetings. The Audit Committee advises on various risk mitigation exercises on a regular basis. Your Company has been maintaining a separate Internal Audit Team headed by the Chief Internal Auditor appointed by the Audit Committee of your Board.
Your Board has also constituted a Risk Management Committee comprising of the Directors and Senior Executives of the Company under the Chairmanship of the Managing Director of the Company. The Terms of Reference of the Risk Management Committee and a Risk Management Policy of the Company have also been approved and adopted.
Your Board is of the opinion that the Internal Financial Controls, affecting the Financial Statements of your Company are adequate and are operating effectively.
COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS
During the year under review, the Company has duly complied with the applicable provisions of the Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) issued by The Institute of Company Secretaries of India (ICSI).
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Industry structure and developments
The financial year 2017-18 was an eventful year with the adoption of GST. While there were some initial hiccups that were to be expected, the implementation of the GST will act as a boon in the long term for the organized manufacturing industry across the country.
The Indian footwear industry is currently under transformation phase and moving from a traditionally labour-intensive industry to a more technological and innovation driven industry. The footwear industry in India employs over 1.1 million workers, making it one of the top employment generating industry in the country. The footwear production in India is over 22 billion pairs annually, which is approximately 9.6% of the total global annual footwear output. India is the second largest global producer of footwear after China and also the worldâs third-largest footwear consumer after China and the USA. Almost 90% of the footwear manufactured in India is sold in the domestic market. Today, India is already among the world''s top 10 footwear exporters, and its share is growing. The organized footwear market in India is still dominated by men''s footwear which contributes around 58% of the total retail footwear market and is expected to grow at a CAGR of around 10% by 2020. The women''s footwear segment, however, is projected to grow at a much faster CAGR of around 20%. In terms of the product type, casual footwear is the largest product segment in the Indian footwear market and contributes to approximately 67% of the total retail footwear market. The footwear industry is dominated by the unorganized domestic footwear manufacturers but with the fast changing consumer behavior, growing Indian fashion and lifestyle market, increase in disposable income of middle class, awareness of fitness among youth, urbanization and demographic changes, the organized sector footwear brands are likely to witness higher growth in the near future.
The Indian footwear industry, is in a confident phase with growth in online shopping, fitness awareness, latest style, fashion trends and consciousness among consumers. With the growing health and fitness awareness amongst urban Indians, demand for fitness footwear has increased manifold and is expected to continue for several years to come. Rapid growth was also registered in Internet retailing in India, which recorded double-digit value share in overall footwear sales in 2017. It is expected that around 11% of total revenue in the Indian footwear market will be generated through online sales by 2021. Due to rapidly increasing urbanization, there is a also an opportunity in Tier II and Tier III cities across India.
The Government of India recently approved special package of Rs 2600 crore for leather and footwear sector which also includes measures for simplification of labour laws. The package involves implementation of central scheme ''Indian Footwear, Leather & Accessories Development Programme'' with an approved expenditure of Rs. 2600 crore over the three financial years from 2017-18 to 2019-20. The package would lead to development of infrastructure for the leather sector, address environmental concerns specific to the leather sector, facilitate additional investments, employment generation and increase in production.
Opportunities and Threats
Being aware of the changes in the external business environment coupled with growing competition both from domestic and foreign players in the industry your Company is making constant endeavors to manufacture better quality, comfortable and durable products. With an eye to improve customer shopping experience your Company is focusing on larger format stores combined with better visual merchandising with continuous focus on operational cost efficiency so that its able to retain its market share and grow further. The online marketing initiatives using digital influencers have already proved to be successful mainly among the younger consumers. With the infusion of new lines in men''s and women''s contemporary collection along with exciting and colorful range for teenage consumers and a range of offerings for the sports & fitness lovers the footfalls at stores are increasing. A range of products in the casual and lifestyle offering especially for working women are expected to create a sustained demand for the future.
The competition is expected to intensify in the coming years with more and more organized players entering the market with a range of offerings in formal and fashion segment. The brick and mortar retail industry is also expected to witness intense competition from the innovative digital platforms.
Segment wise or product wise performance
Your Company operates in Footwear & Accessories Segment only and performances of major business categories and key brands of your Company during the financial year ended March 31, 2018 are highlighted below:
Retail Business
Your Company has followed a strategy of driving same store growth while adding new retail stores in Malls and High Street locations to enhance its Retail footprint. During the twelve month period ended March 31, 2018, your Company added over 100 new retail stores, 31 franchisee stores & renovated more than 90 stores across India. These spacious new stores are located in the growing markets of the country and are based on global design, making them look enticing with contemporary display of the products. Your Company shall continue to make investment on renovating existing stores hence creating a delightful shopping experience for the customers by improving store layouts on the lines of new ''Red Angela Store Concept'' and creating an emphasis on key products within the retail stores. Your Company plans to focus on building the Bata Brand and attract more footfalls in the retail stores through breathtaking windows, in-stores activities and amplify various new launches of products and collections. Your Company is also focused on improving customer service at stores through regular training of store staff.
With the relaunch of Power range - ''XO Riseâ Genesis, Glide Vapor & Speedy your Company is confident of attracting teenagers and youth in a big way. As a step to building the brand âPowerâ your Company has opened its first stand-alone Power store in Noida and plan to open more exclusive stores next year.
Your Company also opened the first Bata Women Store in India in Bengaluru focused on catering to footwear & accessories needs of woman consumers.
Digital Multi-Channel Business
Your Company''s online business has recorded a remarkable growth during the year under review. Your Company sold more than 8.9 lac pairs of footwear through online channels and achieved a turnover of Rs. 879 Million. Your Company''s e-commerce presence has penetrated in 1000 cities and towns across India.
During the financial year, your Companyâs e-commerce division worked on opportunities to diversify brand reach in the existing online business models. Your Company further continued to strengthen its online customer database by reaching out to the leading telecom, airline and banking players in association with affiliated partners. There were continuous efforts to retain the loyalty database by reaching out to them through SMS on a week-on-week basis. Your Company''s online business with partners like Amazon, Flip kart etc. has grown across all portals - with a steep increase in secondary sales through competitive product offerings, creation of interactive brand stores and rigorous marketing campaigns which in turn resulted better secondary sales on these platforms. Various market expansion strategies were put in place like increase of brand presence through marketplace model by listing products on high-traffic generating websites including Tata Cliq, Shop Clues, GoFynd and Limeroad.
Your Company''s e-commerce website www.bata.in migrated to a secure AWS server for enhanced performance that includes features like auto scaling and elastic load balancing. The website of your Company has been further enhanced to a better UX / UI which is simple, user friendly and high on fashion quotient. Your Company has further upgraded its Mobile Application with interactive user-interface leading to an increase in registered mobile users. With the launch of Bata Home Delivery your Company has also embarked on a journey towards being a truly omni-channel organization where consumers can view and buy our products from any platform and use our stores as a point of service. Going forward your Company will use digital devices in our stores to show a wider range of products to the consumers thereby improving the overall conversion of our stores.
Hush Puppies
The financial year 2017-18 saw various new initiatives for Hush Puppies - your Companyâs international brand known for comfort, quality and style. Launching of new ''Signature Collection'' across its exclusive stores, marking a new tradition of contemporary and fashionable shoes for the new younger generation, etc. were the major highlights for the brand. Apart from this, an increased focus on womens footwear as a premium comfort category has been introduced in the new and refreshing lines of ''The Body Shoe'' for women and the new successful sporty casual collection. In addition to being available through the retail stores, wholesale network and e-commerce channel of the Company, the brand has now expanded its presence through 90 exclusive stores and 60 shop-in-shops in premium departmental stores. During the year under review, Hush Puppies continues to strongly reposition itself as a Premium Lifestyle Casual Footwear brand. Your Company shall continue to focus on offering new and unique products under this brand, with increased focus on comfort, contemporary fashion and style making ''Hush Puppies'' the most desired lifestyle footwear brand in India.
Children''s Footwear
In order to cater to the children''s ever changing footwear demand, your Company has been introducing many new designs and innovative footwear. Through ''Bubble gummers'' brand of footwear, your Company has always been striving to make quality shoes with uncompromising comfort and features that safeguard their little feet. Bubble gummers is retailed through all Bata stores across the Country and has been the first point of contact to start our consumersâ journey to establish long term association with Bata. With 18% of the Country''s population below the age of 10 years, potential to grow in the children category of footwear is huge which makes this category as one of the key focus areas for your Company.
Your Company has opened its first Bubble gummers Store in Bengaluru which provide a unique shopping experience to shoppers with great collection of shoes and accessories.
Your Company has further established an association with The Walt Disney Company India Pvt. Ltd. and working with a set of designers from Disney, to create a complete collection covering all types of footwear ranging from casual shoes, canvas shoes and Ballerinas to everyday-wear sandals and chappals. Your
Company has created exclusive ''Disney Corners'' in some of its key retail stores across major cities in India to highlight the collection and add value to the children category of footwear range.
Non-Retail Business
Your Company''s non-retail business division comprises of urban wholesale, industrial and institutional business divisions. The urban wholesale business of your Company has been endeavoring to penetrate the markets through a wide network of approximately 350 distributors across India. During the year under review, the wholesale trade across India witnessed a slowdown as the business has been impacted by some external factors like GST implementation. Your Company is strengthening its urban wholesale business, monitoring team and efforts are being made to increase its market share in the wholesale footwear business.
Customer Care Initiatives
Your Company has a dedicated customer service team to ensure customers don''t face any inconvenience and their queries and concerns get addressed in an amicable way. A toll free customer support number is there in place so that customer can reach directly to the Company along with other channels like e-mail, Face book, Twitter etc. Your Company provides the best in class services to the customers, all the concerns are being resolved within minimum timelines ensuring complete transparency. Your Company''s loyalty programme âBata Clubâ has increased its reach by registering over 19 Million members. The programme ensures continuous engagement with members and rewards them special benefits upon purchase. These customer engagement programmes are conducted throughout the year to drive increased footfalls and improved conversion in both retail stores and on digital multi-channel platforms. Your Company has also started collecting customer feedback about their shopping experience and measuring it as per the global standard tool âNPSâ (Net Promoter Score) since January 2018.
Outlook
Your Company has an established leadership position in the industry and is the most trusted name in branded footwear and accessories. With the change in customer preferences, shoes have become a style statement especially among the teenagers, youth and the affluent working class. The domestic demand for footwear is projected to grow at a fast pace. The inclination towards purchase of products manufactured by established brands is increasing. The digital platform, presence in social media, blogs and advertisements are fast catching up with the brick and mortar sales model. Your Company is proactively engaged in taking appropriate steps to tap these opportunities in order to improve its market share and retain its leadership position in the organized footwear and accessories sector of the industry.
Risks and concerns and Contingent Liabilities
Your Company acknowledges the fact that competition from both domestic and international players is increasing by every passing day. In addition to increasing competition the changing customer behavior and impact of online marketing initiatives have an effect on your Company''s performance since your Company has a huge network of retail stores Pan India. With the opportunity for employment gradually increasing people/ talent retention is considered as a challenge. Your Company also realizes that modernization of I.T. systems along with having suitable protection from risk of loss / theft of data is one of the major areas of concern globally. Your Company monitors its major risks and concerns at regular intervals. Appropriate steps are taken in consultation with all concerned including the Risk Management Committee and the Audit Committee of the Board to identify and mitigate suck risks.
During the normal course of its business operations, your Company has been subjected to litigations in connection with or incidental thereto. These litigations include civil cases, excise and customs related cases, etc. filed by and against the Company. These cases are being pursued with due importance and in consultation with legal experts in respective areas. Your Board believes that the outcome of these cases are unlikely to cause a materially adverse effect on the Companyâs profitability or business performance. Your Company has a Contingent Liability of Rs. 460.54 Million as on March 31, 2018 as compared to Rs. 576.97 Million as on March 31, 2017. Attention is drawn to the explanations mentioned in Note No. 32 of the Notes to Financial Statements for the financial year ended March 31, 2018. In view of the present status and based on legal advice obtained from time to time, your Board is of the opinion that no provision is required to be made against these Contingent Liabilities.
Internal control systems and their adequacy
A separate paragraph on internal control systems and their adequacy has been provided elsewhere in the Board''s Report.
Discussion on financial performance
Your Company has been able to achieve profitable growth and believes that this is sustainable, barring unforeseen circumstances.
The Earnings per Share (EPS) (Basic and Diluted) of your Company for the financial year ended March 31, 2018 was at Rs. 17.40. The EPS for the previous financial year ended March 31, 2017 was Rs. 12.35, which was lower primarily due to one-time exceptional expenses. Excluding such exceptional items, the EPS of your Company for the financial year ended March 31, 2017 was Rs.14.04. Your Company recorded EBITDA margin of 13.40% during the financial year under review as compared to 11.10% during the financial year 2016-17.
Your Company does not have any Bank Borrowings and the entire capital expenditure has been funded through internal sources.
The Capital Expenditure incurred during the year under review amounted to Rs. 930.77 Million as compared to Rs. 386.79 Million in the previous year.
Material developments in human resource / industrial relations front, including number of people employed
Your Company has been continuously working to improve human resources skills, competencies and capabilities in the Company, which is critical to achieve desired results in lines with its strategic business ambitions. Some key initiatives have been taken during the financial year 2017-18 in this direction are summarized below:
- Execution of Long Term Agreement (LTA) for settlement of dues with the Worker''s Union at the manufacturing units of the Company at Batanagar, Kolkata.
- Industrial relations at all the manufacturing units of your Company have been harmonious and peaceful with active involvement of the employees in the collective bargaining process. Your Company has also encouraged wholehearted participation of the employees and union in improving productivity as well as quality of its products.
- The Retail Training Academy of your Company imparted training to 412 District Managers and Store Managers for 10 - 12 weeks duration. During the year, 2091 Sales Promoters were trained on product as well as customer service in our stores.
- As part of continuous learning initiative, your Company implemented online learning modules accessible on mobile as well as tabs for its store staff. Each of the modules is supported by video content, presentations as well as assessments. The completion of these modules leads to certification which is in turn mapped to the career map for different roles.
- In order to retain good talent within the organization, your Company has strengthened the goal setting and measurement process during the year supported with structured development plans for high potential people to move into different roles. This has resulted in higher retention levels across the organization.
As on March 31, 2018, there were 4,698 permanent employees on the rolls of your Company.
CAUTIONARY STATEMENT
There are certain Statements which have been made in the Management Discussion and Analysis Report describing the estimates, expectations or predictions, may be read as ''forward-looking statements'' within the meaning of applicable laws and regulations. The actual results may differ materially from those expressed or implied. The important factors that would make a difference to the Company''s operations include demand-supply conditions, raw material prices, changes in Government Policies, Governing Laws, Tax regimes, global economic developments and other factors such as litigation and labour negotiations.
CORPORATE GOVERNANCE
In compliance with the provisions of Regulation 34 of the Listing Regulations read with Schedule V to the said Regulations, the Corporate Governance Report of your Company for the financial year ended March 31, 2018 and a Certificate from M/s. B S R & Co., LLP, Chartered Accountants, the Auditors, on compliance with the provisions of Corporate Governance requirements as prescribed under the Listing Regulations, are annexed and forms part of this Annual Report.
BUSINESS RESPONSIBILITY REPORT (BRR)
In compliance with the provisions of Regulation 34(2)(f) of the Listing Regulations read with the SEBI Circular No. CiR/CFD/CMD/10/2015 dated November 4, 2015, your Company has prepared a BRR in the prescribed format for the financial year ended March 31, 2018 describing initiatives undertaken by it from an environment, social and governance perspective in the format as specified by the SEBI which is annexed to the Boardâs Report and marked as Annexure VII. The BRR has been uploaded on the website of the Company at www.bata.in and is available at the link https://bata.in/bataindia/a-29_s-181_c-42/investor-relations.html.
ACKNOWLEDGEMENTS
Your Board is grateful for the continuous patronage of the valued customers of the Company and remains committed to delivering more style and comfort at every step. Your Board acknowledges and appreciates the relentless efforts of the employees, workmen and staff including the management team headed by the Executive Directors who always lead from the front in achieving a commendable business performance year on year despite a challenging business environment.
Your Board is indebted for the unstinted support and trust reposed by you, the Members and also remains thankful to Bata Shoe Organization (BSO) for their ongoing support and guidance.
Your Board wishes to place on record its deep appreciation of the Independent Directors and the Non-Executive Directors of the Company for their immense contribution by way of strategic guidance, sharing of knowledge, experience and wisdom, which helps your Company to take right decisions in achieving its business goals.
Your Board acknowledges the support and co-operation received from all regulatory authorities of the Central Government and all State Governments in India. Your Board takes this opportunity to thank all its vendors, suppliers, dealers, banks and other stakeholders as it considers them essential partners in progress.
For and on behalf of the Board of Directors
UDAY KHANNA
Place : Gurugram Chairman
Date : May 22, 2018 DIN: 00079129
Mar 31, 2017
TO THE MEMBERS
The Directors are pleased to present the 84th Annual Report covering the operational and financial performance of your Company along with the Audited Financial Statements for the financial year ended March 31,2017.
FINANCIAL HIGHLIGHTS
(Rs. in Million)
|
Particulars |
Year ended on March 31, 2017 |
Year ended on March 31, 2016 |
|
(Audited) |
(Audited) |
|
|
Revenue from operations |
24,972.41 |
24,485.97 |
|
Other Income |
466.46 |
267.18 |
|
Total |
25,438.87 |
24,753.15 |
|
Profit / (Loss) before Exceptional items and Taxation |
2,552.44 |
2,219.42 |
|
Exceptional items- Income / (Loss) |
(216.69) |
747.07 |
|
Profit / (Loss) before Taxation |
2,335.75 |
2,966.49 |
|
Provision for Taxation |
748.27 |
790.54 |
|
Net Profit |
1,587.48 |
2,175.95 |
|
Other Comprehensive lncome/(Loss) (net of tax) |
14.10 |
11.56 |
|
Total Comprehensive Income |
1,573.38 |
2,164.39 |
Your Company has prepared the Financial Statements for the financial year ended March 31, 2017 under Section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015 and has recast the Financial Statements relating to the previous financial year ended March 31, 2016 in order to make them comparable.
During the financial year ended March 31, 2017, your Company recorded a turnover of Rs.24,972.4 Million as compared to the turnover of Rs.24,485.9 Million recorded during the previous financial year ended March 31, 2016. The Net Profit of your Company for the financial year ended March 31, 2017 stood at Rs.1,587.5 Million as against the Net Profit of Rs.2,175.9 Million for the financial year ended March 31, 2016. However, the Net Profit for the financial year ended March 31, 2017 included one-time Exceptional expense of Rs.216.7 Million, whereas, the Net Profit for the financial year ended March 31, 2016 included one-time Exceptional income of Rs.747.1 Million. Accordingly, the Profit before Exceptional Items and Tax for the financial year ended March 31,2017 reflects a growth of 15% over the corresponding Profit for the financial year ended March 31, 2016. Details of the Exceptional Items for both the aforesaid financial years have been mentioned in Note No.26 of the Notes to the Financial Statements in this Annual Report.
On a consolidated basis, your Company recorded a turnover of Rs.25,043.4 Million during the financial year ended March 31, 2017 and achieved consolidated Net Profits of Rs.1,589.5 Million for the said financial year.
Your Company has been the leading footwear brand of choice for its style, comfort and quality at affordable price. During the year under review, your Company endeavored to maintain the stature with an added focus to tap the fashion conscious youth, working women and children through introduction of newer and trendier styles of footwear and has also launched premium collections of footwear for men and women. Over the past couple of years there have been considerable changes in customersâ shopping preferences. Technological advancements and availability of smart phones have resulted in exponential growth of online businesses, especially in retail segment. Your Companyâs e-commerce website had witnessed a great response as it caters to evolving shopping habits of the consumers who look for ease and convenience. Your Company being the market leader in the organized footwear sector over the past several decades always endeavors to meet the expectations of its stakeholders and takes all steps possible to enhance the Bata brand value.
SHARE CAPITAL
The Authorized Share Capital of your Company as on March 31, 2017 stands at Rs. 700,000,000/- divided into 140,000,000 equity shares of Rs. 5/- each. The Issued Share Capital of your Company is Rs. 642,850,000/- divided into 128,570,000 equity shares of Rs. 5/- each and the Subscribed and Paid-up Share Capital is Rs. 642,637,700/- divided into 128,527,540 equity shares of Rs. 5/- each, fully paid-up.
DIVIDEND
Your Board has recommended a dividend of Rs.3.50 per share on an Equity Share of Rs. 5/- each (i.e. 70%) for the financial year ended March 31, 2017. The dividend, if declared, by the Members at the forthcoming Annual General Meeting (AGM) shall be paid to the eligible Members of the Company from Friday, July 28, 2017 onwards. The total payout of aforesaid dividend would be approximately Rs.450 Million, excluding the corporate dividend distribution tax, as applicable.
The recommendation of aforesaid dividend is in line with the Dividend Distribution Policy of the Company approved by your Board. The said Dividend Distribution Policy has been uploaded on the website of your Company www.bata.in and is available at the link http://bata.in/0/pdf/DividendDistributionPolicy-BILpdf,
GENERAL RESERVE
The Company has not transferred any amount to the General Reserve during the financial year ended March 31,2017.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN END OF THE FINANCIAL YEAR AND DATE OF REPORT
Subsequent to the end of the financial year on March 31, 2017 till date, there has been no material change and/or commitment which may affect the financial position of the Company.
CREDIT RATING
During the year under review, ICRA Limited (ICRA) has reaffirmed the Credit Rating of â[ICRA]AA â (pronounced as ICRA double A plus) for the Non-Fund Based Facilities of your Company. The outlook on the Long Term Rating is âStableâ.
DEPOSITS
Your Company has no unclaimed / unpaid matured deposit or interest due thereon since December 31, 2013. Your Company has not accepted any deposits covered under âChapter V - Acceptance of Deposits by Companiesâ under the Companies Act, 2013during the financial year ended March 31,2017.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
In terms of Section 186 of the Companies Act, 2013 and Rules framed thereunder, details of the Loans given and Investments made by your Company have been disclosed in Note No. 5 of the Notes to Financial Statements for the year ended March 31, 2017, which forms part of this Annual Report. Your Company has not given any guarantee or provided any security during the year under review.
RELATED PARTY TRANSACTIONS
During the financial year ended March 31, 2017, all transactions with the Related Parties as defined under the Companies Act, 2013 read with Rules framed thereunder were in the âordinary course of businessâ and âat armâs lengthâ basis. Your Company does not have a âMaterial Unlisted Subsidiaryâ as defined under Regulation 16(1)(c) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 [âListing Regulationsâ]. Your Board shall formulate a Policy to determine Material Unlisted Subsidiary as and when considered appropriate in the future.
During the year under review, your Company did not have any Related Party Transaction which required prior approval of the Members. All Related Party Transactions of your Company had prior approval of the Audit Committee and the Board of Directors. Subsequently, the Audit Committee and the Board have reviewed the Related Party Transactions on quarterly basis. Your Company has an internal mechanism for the purpose of identification and monitoring of Related Party Transactions.
There has been no materially significant Related Party Transactions during the year under review, having potential conflict with the interest of the Company. Necessary disclosures required under the Ind AS-24 have been made in the Note No. 38 of the Notes to the Financial Statements for the year ended March 31, 2017.
SUBSIDIARIES
Your Company has three Subsidiaries. Bata Properties Limited and Way Finders Brands Limited continue to be wholly-owned subsidiaries of your Company, whereas Coastal Commercial & Exim Limited continues to be the step down wholly-owned subsidiary of your Company.
The Annual Reports of these Subsidiaries will be made available for inspection by the Members of the Company at the Registered Office of the respective subsidiary Companies and at the Registered Office of your Company at 27B, Camac Street, 1st Floor, Kolkata - 700016 between 11:00 a.m. and 1:00 p.m. on any working day. Annual Reports along with the Audited Financial Statements of each of the Subsidiaries of your Company are also available on the website of the Company at www.bata.in. The Annual Reports of the abovementioned Subsidiaries for the financial year ended March 31, 2017 shall be provided to the Members of the Company upon receipt of written requests from them.
Pursuant to the provisions of Section 129(3) of the Companies Act, 2013 read with Rule 5 of Companies (Accounts of Companies) Rules, 2014, a statement containing salient features of financial statements of the aforesaid Subsidiaries has been provided in Form No. AOC-1 and included in this Annual Report.
The Audited Consolidated Financial Statements (CFS) of your Company for the financial year ended March 31, 2017, as prepared in compliance with the provisions of Ind AS-27 issued by the Institute of Chartered Accountants of India, are also forming part of this Annual Report.
EXTRACT OF ANNUAL RETURN
The extract of Annual Return in the Form No. MGT-9 as on March 31, 2017 is annexed to this Boardâs Report and marked as Annexure I.
AUDIT AND AUDITORS
(i) Change in Auditors
In terms of the provisions of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, M/s. S. R. Batliboi & Co. LLP, Chartered Accountants (ICAI Firm Registration No. 301003-E / E-300005), the Auditors of your Company shall hold office till the conclusion of the ensuing AGM and they shall not be eligible for re-appointment due to expiry of the maximum permissible tenure as the Auditors of your Company. Your Board places on record its deep appreciation for the valuable contributions of the Auditors during their long association since the inception of your Company and wishes them success in the future.
Based on the recommendation of the Audit Committee, your Board at its meeting held on February 9, 2017, appointed M/s. B S R & Co. LLP, Chartered Accountants (ICAI Firm Registration No. 101248-W / W-100022), as the Auditors of the Company, in place of the retiring auditors M/s. S. R. Batliboi & Co. LLP, Chartered Accountants, to hold office from the conclusion of the ensuing 84th AGM until conclusion of the 89th AGM of your Company to be held in the year 2022, subject to approval of the Members of the Company at the ensuing AGM and ratification by the Members of the Company every year thereafter, if required.
Your Company has received a certificate from M/s. BSR & Co. LLP, Chartered Accountants confirming their eligibility to be appointed as Auditors of the Company in terms of the provisions of Section 141 of the Companies Act, 2013 and Rules framed thereunder. They have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India (ICAI) as required under the provisions of Regulation 33 of the Listing Regulations. The proposal for their appointment has been included in the Notice convening the 84th AGM for obtaining approval of the Members of the Company.
(ii) Secretarial Auditor
In terms of the provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Board at its meeting held on February 9, 2017 appointed M/s. P Sarawagi & Associates, Company Secretaries, 27, Brabourne Road, Kolkata - 700001 as the Secretarial Auditors of the Company, to conduct the Secretarial Audit for the financial year ended March 31, 2017 and to submit Secretarial Audit Report in Form No. MR-3.
A copy of the Secretarial Audit Report received from M/s. P Sarawagi & Associates in the prescribed Form No. MR-3 is annexed to this Boardâs Report and marked as Annexure II.
(iii) Qualification, reservation or adverse remark in the Auditorsâ Reports and Secretarial Audit Report
There is no qualification, reservation or adverse remark made by the Auditors in their Auditorsâ Reports to the Financial Statements (Standalone and Consolidated) or by the Secretarial Auditor in their Secretarial Audit Report for the financial year ended March 31, 2017.
SIGNIFICANT AND MATERIAL LITIGATIONS / ORDERS
During the year under review, there were no significant material orders passed by the Regulators / Courts and no litigation was outstanding as on March 31, 2017, which would impact the going concern status and future operations of your Company. The details of litigation on tax matters are disclosed in the Auditorsâ Report and Financial Statements which forms part of this Annual Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
In compliance with the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, a statement containing information on conservation of energy, technology absorption, foreign exchange earnings and outgo of the Company, in the prescribed format, is annexed to this Boardâs Report and marked as Annexure III.
RESEARCH & DEVELOPMENT ACTIVITIES AND ENERGY CONSERVATION
During the year under review, your Companyâs Research & Development activities included technological improvement of the products, introduction of advanced footwear moulds and improvement in manufacturing processes. Such activities resulted in improving the quality of footwear and productivity in manufacturing. Your Company incurred an expenditure of approx. Rs.59.6 Million on Research & Development (including product development initiatives), as against Rs.62 Million spent during the year 2015-16. Your Company has adopted a series of energy conservation measures like replacing conventional tubes with energy efficient LED lights, installation of energy efficient screw compressors, etc. at its Manufacturing Units across India. Such energy saving measures led to a savings of energy cost worth approx. Rs. 7.4 Million during the year under review. Your Company shall continue to invest on Research & Development activities and energy saving measures in its manufacturing units in the future as well. Your Company continued to emphasize on creating a pollution-free and a safe work environment for its employees.
CORPORATE SOCIAL RESPONSIBILITY
Your Board has constituted a Corporate Social Responsibility (CSR) Committee of the Board under the Chairmanship of an Independent Director. A CSR sub-committee comprising of Senior Executives of the Company and a dedicated CSR team undertake and monitor all CSR projects of your Company. Compositions of CSR Committee of your Company and other relevant details have been provided in the Corporate Governance Report which forms part of this Annual Report.
During the year under review, as part of its CSR activities your Company focused on promotion of educational initiatives by supporting the schools near its area of operations. Your Company contributed to the âPrime Ministerâs Swachh Bharat Abhiyanâ by building toilets and facilities for drinking water and hand wash in the semi urban and rural schools. It also participated in the âPrime Ministerâs Skill India campaignâ by enhancing employability skills of the underprivileged youth. In addition to such core CSR areas, your Company has always remained sensitive to the underprivileged people of the society and support them in improving their lives with the aim to eradicate poverty, promote preventive healthcare and promote education. Further, your Company also donated shoes to the affected people in areas hit by natural calamities/ disasters and also to the underprivileged children under its campaign âNo child should walk barefootâ. Your Company spent over Rs.60 Million, i.e., more than 2% of the average net profits for the past three years, towards various CSR activities during the financial year ended March 31, 2017.
Pursuant to the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Annual Report on CSR Activities has been annexed to this Boardâs Report and marked as Annexure IV.
SUPPORT FROM BATA SHOE ORGANIZATION
Your Company continues to receive supports from the Holding Company - Bata (BN) BV., Amsterdam, The Netherlands and also from Bata Shoe Organization (BSO). Your Company also enjoys the benefits of technical research through Global Footwear Services Pte. Ltd., Singapore (GFS). Your Company has renewed the Technical Collaboration Agreement with GFS with effect from January 1, 2011 for a period of ten years. In terms of the said Technical Collaboration Agreement, your Company receives guidance, training of personnel and services from GFS in connection with research & development, marketing, brand development, footwear technology, testing & quality control, store location, layout & design, environment, health & safety, risk & insurance management, etc. Your Company continues to obtain expertise and experience from the personnel of GFS and other BSO group Companies to improve its product range and operational processes throughout the year. In terms of the renewed Agreement as aforesaid, your Company has paid a technical services fee of Rs. 233.5 Million to GFS during the financial year ended March 31, 2017, which is less than 1% of the Turnover of your Company.
BOARD OF DIRECTORS AND BOARD MEETINGS
Your Companyâs Board is duly constituted which is in compliance with the requirements of the Companies Act, 2013, the Listing Regulations and provisions of the Articles of Association of the Company. Your Board has been constituted with requisite diversity, wisdom and experience commensurate to the scale of operations of your Company.
During the year under review, a total of five Meetings of your Board of Directors was held, i.e., on May 30, 2016; August 3, 2016; November 25, 2016; December 21, 2016 and February 9, 2017. Details of Board composition and Board Meetings held during the financial year2016-17 have been provided in the Corporate Governance Report which forms part of this Annual Report.
During the year under review there has been no change in the Board of Directors of your Company, which indicates continuity of your Board. At the 83rd AGM your Company held on August 4, 2016, approval of the Members was obtained to the re-appointment of Mr. Rajeev Gopalakrishnan as the Managing Director of your Company and appointment of Mr. Ram Kumar Gupta as the Director Finance, for a period of five years from the date of their respective appointments on your Board. Your Board is of the opinion that continuous association of Mr. Rajeev Gopalakrishnan and Mr. Ram Kumar Gupta with the Board shall be beneficial to your Company and help it achieve its desired business goals. At the aforesaid AGM, the Members also approved the appointment of Mr. Christopher Kirk as a Director of your Company, liable to retire by rotation.
Mr. Shaibal Sinha, Non-Executive Director is due to retire by rotation at the ensuing AGM and being eligible, offers himself for re-appointment. A brief profile along with necessary disclosures of Mr. Shaibal Sinha has been annexed to the Notice convening the ensuing AGM and forms an integral part of this Annual Report. Your Board recommends re-appointment of Mr. Shaibal Sinha as a Director of the Company, liable to retire by rotation.
Mr. Uday Khanna, Mr. Ravindra Dhariwal, Mr. Akshay Chudasama and Ms. Anjali Bansal, Independent Directors of your Company have declared to the Board of Directors that they meet the criteria of Independence as laid down in Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the Listing Regulations and there is no change in their status of Independence. Your Board places on records its deep appreciation for their continuous guidance, support and contribution to the Management of the Company in its pursuit to achieve greater heights.
Mr. Rajeev Gopalakrishnan, Managing Director & Chief Executive Officer, Mr. Ram Kumar Gupta, Director Finance & Chief Financial Officer and Mr. Maloy Kumar Gupta, Company Secretary & Compliance Officer continue to be the Key Managerial Personnel of your Company.
AUDIT COMMITTEE
The Board of Directors of your Company has a duly constituted Audit Committee in terms of the provisions of Section 177 of the Companies Act, 2013 read with the Rules framed thereunder and Regulation 18 of the Listing Regulations. The terms of reference of the Audit Committee has been approved by the Board of Directors. Composition of the Audit Committee, number of meetings held during the year under review, brief terms of reference and other details have been provided in the Corporate Governance Report which forms part of this Annual Report. Recommendations made by the Audit Committee are generally accepted by your Board.
NOMINATION AND REMUNERATION POLICY
Your Board has adopted a Remuneration Policy for identification, selection and appointment of Directors, Key Managerial Personnel (KMPs) and Senior Management Personnel (SMPs) of your Company. The Policy provides for criteria for fixing remuneration ofthe Directors, KMPs, SMPs as well as other employees ofthe Company. The Policy enumerates the powers, roles and responsibilities of the Nomination and Remuneration Committee.
Your Board, on the recommendations of the Nomination and Remuneration Committee, appoints Director(s) of the Company based on his / her eligibility, experience and qualifications and such appointment is approved by the Members of the Company at General Meetings. Generally, the Managing Director and Whole-time Directors (Executive Directors) are appointed for a period of five years. Independent Directors of the Company are appointed to hold their office for a term up to five consecutive years on the Board of your Company. Based on their eligibility for re-appointment, the outcome of their performance evaluation and based on the recommendation by the Nomination and Remuneration Committee, the Independent Directors may be re-appointed by the Board for another term of five consecutive years, subject to approval of the Members of your Company. The Directors, KMPs and SMPs shall retire as per the applicable provisions of the Companies Act, 2013 and the policy of the Company. While determining remuneration of the Directors, KMPs, SMPs and other employees, the Nomination and Remuneration Committee ensures that the level and composition of remuneration are reasonable and sufficient to attract, retain and motivate them and insure the quality required to run the Company successfully, the relationship of remuneration to performance is clear and meets appropriate performance benchmarks and such remuneration comprises a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the Company and its goals. The Company follows a compensation mix of fixed pay, benefits, allowances, perquisites, performance linked incentives and retirement benefits for its Executive Directors, KMPs, SMPs and other employees. Performance Linked Incentive is determined by overall business performance of your Company. Annual increments are decided by the Nomination and Remuneration Committee within the salary scale approved by the Board and Members of the Company. The Company pays remuneration to Independent Directors by way of sitting fees and commission on the net profits of the Company. Non-Executive Directors of your Company do not accept any sitting fees / commission on the net profits from the Company. Remuneration to Directors is paid within the limits as prescribed under the Companies Act, 2013 and the limits as approved by the Members of the Company, from time to time.
The aforesaid Nomination and Remuneration Policy has been uploaded on the website of your Company www.bata.in and is available at the link: http://bata.in/0/pdf/Remuneration-Policy_2015.pdf. Your Company conducts a Board Evaluation process for the Board of Directors as a whole, Board Committees and also for the Directors individually through self-assessment and peer assessment. The details of Board evaluation for the year 2016-17 have been provided in the Corporate Governance Report which forms part of this Annual Report.
DISCLOSURES ON REMUNERATION OF DIRECTORS AND EMPLOYEES OF THE COMPANY
Information as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, and subsequent amendments thereto, is annexed to this Boardâs Report and marked as Annexure V.
A statement containing the Information of top ten employees in terms of remuneration drawn and particulars of every employee of the Company, who was in receipt of remuneration not less than the limits specified under Section 197(12) of the Companies Act, 2013 read with Rules 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and subsequent amendments thereto, is annexed to this Boardâs Report and marked as Annexure VI.
DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to provisions of Section 134 of the Companies Act, 2013, the Directors, to the best of their knowledge and belief, hereby confirm that:
(a) in the preparation of the annual accounts, the applicable accounting standards had been followed;
(b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2017 and of the profit of the Company for that period;
(c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) they have prepared the annual accounts on a going concern basis;
(e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
(f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.
WHISTLE BLOWER POLICY / VIGIL MECHANISM
In terms of provisions of Section 177 of the Companies Act, 2013 and Rules framed thereunder read with Regulation 22 of the Listing Regulations, your Company has a vigil mechanism in place for the Directors and Employees of the Company through which genuine concerns regarding various issues relating to inappropriate functioning of the organization can be communicated. For this purpose, your Board has a Whistle Blower Policy and has been uploaded on the website of the Company at www.bata.in and the same is available at the link http://bata.in/0/pdf/Whistle-Blower-Policy,pdf. A Vigil Mechanism Committee under the Chairmanship of the Audit Committee Chairman has been constituted. The Policy provides access to the Head of Legal Department of the Company and to the Chairman of the Audit Committee in certain circumstances.
No person has been denied an opportunity to have access to the Vigil Mechanism Committee including the Audit Committee Chairman. During the year under review, there has been no incidence reported which requires action by the Vigil Mechanism Committee.
POLICY ON PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company has adopted a Policy under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed thereunder. Your Company is committed to provide a safe and secure environment to its women employees across its functions and other women stakeholders, as they are considered as integral and important part of the Organization.
An Internal Complaints Committee (ICC) with requisite number of representatives has been set up to redress complaints relating to sexual harassment, if any, received from women employees and other women associates. All employees (permanent, contractual, temporary, trainees) are covered under this policy, which also extends to cover all women stakeholders of the Company.
The following is a summary of sexual harassment complaints received and disposed off during the financial year ended March 31, 2017:
- No. of Complaints received : NIL
- No. of Complaints disposed off : Not Applicable
Your Company has been conducting awareness campaign across all its manufacturing units, warehouses, retails stores and office premises to encourage its employees to be more responsible and alert while discharging their duties.
RISK MANAGEMENT AND ADEQUACY OF INTERNAL FINANCIAL CONTROLS
Your Companyâs internal financial control ensures that all assets of the Company are safeguarded and protected, proper prevention and detection of frauds and errors and all transactions are authorized, recorded and reported appropriately. Your Company operates through definitive Chart of Authorities (COAs) and Standard Operating Procedures (SOPs) in respect of its operations including financial transactions. Such COAs and SOPs are regularly monitored and if required, modified from time to time depending on business requirements.
Your Company has an adequate system of internal financial controls commensurate with its size and scale of operations which includes policies and procedures pertaining to maintenance of records containing reasonable details, accurate and fair reflections of financial transactions and dispositions of the assets of the Company.
Such practice provides reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with the applicable legislations and that the same are well within the COAs and SOPs, without exception. Your Company also monitors through its Internal Audit Team the requirements of processes in order to prevent or timely detect unauthorized acquisition, use or disposition of the Companyâs Assets which could have a material effect on the Financial Statements of the Company.
The Audit Committee of your Board has devised a Risk Management Policy, approved by your Board, which outlines the risk management framework for the functions involved within your Company. As per the said Policy, Risk Management Committee of your Board has been entrusted with the role and responsibilities to formulate, monitor and review risk management plans of your Company.
The Internal Audit Report and Risk Inventory Report are reviewed periodically by the Audit Committee of the Board of Directors. The Chief Internal Auditor is a permanent invitee to the Audit Committee Meetings. The Audit Committee advises on various risk mitigation exercises on a regular basis. Your Company has been maintaining a separate Internal Audit Team headed by the Chief Internal Auditor appointed by the Audit Committee of your Board.
Your Board has also constituted a Risk Management Committee comprising of the Directors and Senior Executives of the Company under the chairmanship of the Managing Director of the Company. The Terms of Reference of the Risk Management Committee and a Risk Management Policy of the Company have also been approved and adopted.
Your Board is of the opinion that the Internal Financial Controls, affecting the Financial Statements of your Company are adequate and are operating effectively.
CORPORATE GOVERNANCE
In compliance with the provisions of Regulation 34 of the Listing Regulations read with Schedule V to the said Regulations, the Corporate Governance Report of your Company for the financial year ended March 31, 2017 and a Certificate from M/s. S. R. Batliboi & Co., LLP, Chartered Accountants, the Statutory Auditors, on compliance with the provisions of Corporate Governance requirements as prescribed under the Listing Regulations, are annexed and forms part of this Annual Report.
BUSINESS RESPONSIBILITY REPORT (BRR)
In compliance with the provisions of Regulation 34(2)(f) of the Listing Regulations read with the SEBI Circular No. CIR/CFD/CMD/10/2015 dated November 4, 2015, your Company has prepared a BRR in the prescribed format for the financial year ended March 31, 2017, describing initiatives undertaken by it from an environment, social and governance perspective in the format as specified by the SEBI which is annexed to the Boardâs Report and marked as Annexure VII. The BRR has been uploaded on the website of the Company www.bata.in and is available at the link http://bata.in/bataindia/sc-181_cat-42/investor-relations.html.
ACKNOWLEDGEMENTS
Your Board is grateful for continuous patronage of the valued customers of your Company and for the unstinted support and trust reposed by the dear shareholders and expects continuity of the same in the future. Your Board continues to remain thankful to Bata Shoe Organization (BSO) for their continuous support and guidance.
Your Board wishes to place on record its deep appreciation of the Independent Directors and the Non-Executive Directors of your Company for their immense contribution by way of strategic guidance, sharing of knowledge, experience and wisdom, which help your Company take right decisions in achieving its business goals. Your Board appreciates the relentless efforts of the employees, workmen and staff including the Management Team headed by the Managing Director, who always leads from the front in achieving excellent business performance year-on-year under a challenging business environment.
Your Board acknowledges the support and co-operation received from all regulatory authorities of the Central Government and all State Governments in India. Your Board takes this opportunity to thank all its vendors, suppliers, dealers, banks and other stakeholders as it considers them essential partners in progress.
For and on behalf of the Board of Directors
UDAY KHANNA
Place : Gurgaon Chairman
Date : May 15, 2017 (DIN: 00079129)
Dec 31, 2013
The Directors have pleasure to present the 81st Annual Report of your
Company covering the operating and financial performance for the year
ended December 31, 2013.
FINANCIAL REVIEW
2013 2012
(in Rs.
millions) (in Rs.
millions)
Gross Turnover 20,984.06 18,717.54
Less: Excise Duty on Turnover 332.32 293.01
Net Turnover 20,651.74 18,424.53
Other Income 313.48 299.52
Total 20,965.22 18,724.05
Profit/(Loss) before Depreciation and
Taxation 3,418.21 3,033.39
Less: Depreciation 591.97 513.75
Profit / (Loss) before Taxation 2,826.24 2,519.64
Provision for Taxation:
- Current Tax 1,156.01 908.43
- Deferred Tax Charge/ (Credit) (Net) (237.20) (101.44)
- Income Tax for earlier year - (3.38)
Net Profit 1,907.43 1,716.03
Profit available for Appropriation 6,576.46 5,288.76
OPERATIONS
For the first time in its history, your Company''s Turnover crossed the
coveted mark of Rs. 20,000 Million. During the year 2013, your Company
achieved a total turnover of Rs.20,984.1 Million as compared to the
Turnover of Rs.18,717.5 Million in the year 2012 - reflecting a growth
of approx. 12.1%. Your Company recorded a Net Profit of Rs.1,907.4
Million for the year 2013, which was 11.2% higher than the Net Profit
of Rs.1,716.0 Million for the year 2012.
Your Company has witnessed constant growth over the past few years,
which endorses its strong understanding of the consumer needs and
lifestyle. Your Company has been relentlessly working on improving its
product offerings through constant research and development. The
footwear collection has vastly improved over the years and many
contemporary and fashionable designs of footwear have been launched.
The new designs have helped your Company to constantly increase its
customer base while meeting the changing lifestyle needs of the loyal
customers.
During the year under review, the manufacturing facilities of your
Company have also been upgraded with introduction of improved quality,
better technology and materials for producing footwear with a more
trendy look and comfort to meet the ever-changing market requirements.
In order to meet its demand for footwear, your Company has also tied up
with various manufacturers to produce shoes as per its own designs and
quality standards. Modernization of factories is an on-going process in
your Company and the same shall continue in the future.
In its strategic pursuit, your Company continues to open approx. 100
new retail stores every year across India and shut down or relocate
unviable stores. Most of the new stores are of large format having
space of more than 3,000 sq. ft. and delicately designed to display
each category of footwear and accessories. These large format stores
provide an excellent ambience and delightful shopping experience to the
customers. During the year under review, your Company opened 95 new
stores, including the largest footwear store in India at Viviana Mall,
Mumbai, covering an area of approx. 28,000 sq. ft. Your Company is
accelerating its growth focusing on tier II and tier III cities where
the potential for growth is significant.
The improved performance of your Company over the past few years is a
testimony to the fact that the Company is moving in the right direction
and has adopted the right model of growing its business. The Indian
market offers great opportunities and challenges as well. As the Indian
consumers become more and more demanding in their choices, preferences
and tastes, your Company will also gear up to seize these opportunities
and face the challenges with appropriate strategies. Key Priorities of
your Company for the year 2014 shall be to expand its presence in
existing markets as well as in tier II and tier III cities in India.
Footwear offerings shall continue to focus on the latest fashion and
trend at affordable prices to attract and serve the younger generation
of customers.
TRANSFER TO RESERVES
Your Company has transferred a sum of 190.7 Million to General Reserve
against Rs.171.6 Million transferred last year.
DIVIDEND
The Board of Directors have recommended a final dividend of Rs 6.50 per
share (i.e., 65% on an equity share of Rs.10/- each) for the year ended
December 31, 2013, as against Rs.6.00 (i.e.,60% on an equity share of
Rs.10/- each) paid last year. The payment of aforesaid dividend is
subject to approval of the shareholders at the ensuing Annual General
Meeting of the Company and if declared, shall be paid to the
shareholders from June 04, 2014 onwards.
FIXED DEPOSIT
During the year under review, your Company has transferred to the
Investor Education & Protection Fund (IEPF) of the Central Government
the entire amount of Rs. 306,808/- as matured fixed deposits and
interest accrued thereon, which remained unclaimed/unpaid for a period
of more than seven years, despite several reminders and communications
from the Company. Accordingly, your Company has no unclaimed/unpaid
matured deposits or interest thereon as on December 31, 2013. Presently
the Company is not accepting any fixed deposits.
CREDIT RATINGS
During the year under review, ICRA Limited has reaffirmed the rating of
[ICRA] A1 (pronounced as ''ICRA A one plus'') to your Company for its
Commercial Paper (CP) programme. This is the highest-credit quality
rating assigned by ICRA Limited to short term debt instruments. ICRA
Limited has also reaffirmed the rating of [ICRA] AA (pronounced as
''ICRA double A'') to your Company for its Line of Credit (LOC) limits of
fund based/non-fund based facilities sanctioned by the Banks. The
outlook on the assigned rating is ''Positive.''
AWARDS AND RECOGNITION
Your Directors are pleased to inform that your Company continues to
maintain its leadership position in the organized footwear industry in
India. Your Company has been the recipient of several awards and
recognitions. During the year under review, your Company received the
following Awards and Recognitions:
(i) Brand Equity - The Most Trusted Brand of 2013:
''BATA'' has bagged the No. 1 position in the FOOTWEAR category - This is
the second consecutive year that your Company bagged the No.1 spot. The
brand BATA was catapulted in ranking from 27th position in 2012 to 16th
position in 2013 - an improvement of 11 positions in overall ranking
amongst the top 100 brands in India.
(ii) Images Shoes & Accessories Award- 2013:
Bata India has been awarded Images Most Admired National Footwear
Retail Chain of the Year.
(iii) India''s Most Attractive Brand 2013:
Bata India has been ranked at the 11th position by DNA Newspaper on the
basis of a survey conducted by research firm TRA amongst the top Brands
in India.
CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility (CSR) is a continuous commitment of
your Company for overall economic development and well being of the
Country. CSR plays an important role in sustainable growth of your
Company and ensures that your Company discharges its duties towards
development of the society. As a good corporate citizen in India, your
Company participates in initiatives that preserves and protects the
environment and natural resources. Your Company is one of the leading
Members of the Bata Children''s Program (BCP) of Bata Shoe Organization,
which contributes immensely to the development and well being of
under-privileged and differently-abled children, specially the girls,
across the World.
Your Company has been engaged in various CSR activities throughout the
year. During the year 2013, CSR activities undertaken by your Company
included the following:
1. Arranged for relief material & assistance for the flood-hit victims
at Uttarakhand. Approx. 15 tons of relief material including food,
utensils, warm clothes and blankets were distributed amongst the
survivors of disaster victims at villages in Haridwar and Dehradun.
2. Organized Blood Donation Camps at the corporate office at Gurgaon
and at manufacturing units. General Health Check-up was conducted for
underprivileged children at various schools at Gurgaon and Batanagar.
3. Organized Self-Defense Training for underprivileged school girls in
Gurgaon. These underprivileged girls learnt easy self-defense tricks
through the volunteers to handle difficulties with simulations on
managing untoward situations. The training workshop boosted the
confidence of these girls and shall help them fight against various
odds and challenges that they face in their daily lives.
4. Conducted Hepatitis-B Vaccination Campaigns at Jharsa Village,
Gurgaon. More than 280 kids were vaccinated against Hepatitis-B which
is a serious disease caused by a highly infectious virus that attacks
the liver which can lead to severe illness, liver damage, etc.
5. Organized a Tree Plantation Drive at Aravalli Bio Diversity Park,
Gurgaon. Approx. 700 trees were planted by the volunteers along with
enthusiastic school children who were introduced to the wonders of
nature and respect for sustainable resource management. Your company
had also organized ''Bata Walks Green'' Campaign in manufacturing units.
Our volunteers planted saplings across our factories to spread
awareness about environment protection, sustenance, and eco-conscious
growth.
6. Govt. Girls Primary School, Gurgaon and Primary & KG School at
Batanagar were renovated. A multi-purpose Auditorium and a new Computer
lab had been introduced to the students of Batanagar Primary & KG
School. The renovation at Govt. Girls Primary School included hygienic
classroom, safe & comfortable furniture, neat and clean classrooms with
cartoon characters painted and educational messages written on walls by
the volunteers.
7. Under the BCP India initiatives, successfully launched a
sustainable employee volunteering initiative - "Each One Teach One
Campaign" to create awareness on the rights of a girl child, moral
values, co-curriculum and sport activities. 30 employees of the Company
are volunteering 1 hour weekly to teach underprivileged girls in a
Primary School in Gurgaon.
8. Rain Water Harvesting projects of your Company continued near Bata
House, Gurgaon and at its Hosur Unit, where rain water collected from
the plot is being used for recharging of borewell and rain water
collected from the roof is being used for washrooms and in lawns and
gardens.
Your Board is aware that the Government of India has included Section
135 under the new Companies Act, 2013, encouraging certain class of
companies in India to spend 2% of average net profits of three years
towards CSR. The provisions of the new Act are yet to be notified. Your
Company will take appropriate steps to meet the requirements under the
Companies Act, 2013 in due course.
RETAIL
The process of opening large format stores and renovating the existing
stores to foster contemporary appeal continued during the year 2013.
Your Company has opened 95 large format stores (approx. 3000 sq. ft. or
more) and renovated/ relocated / closed unviable retail stores across
India. The strategy adopted by your Company has resulted in higher
sales and profitability year-on-year as demonstrated in financial
results of the Company.
Your Company continues to introduce contemporary and fashionable
designs in its product range. Special attention has been provided to
improve the quality and style of footwear in each category. In every
season throughout the year 2013, your Company improved its footwear
collections in stores to suit the needs and desires of the customers.
An exclusive range of ladies footwear and a variety of products for the
kids and children were launched, which have been well accepted by the
customers. Your Company continued to be the market leader in Men''s
formal footwear, with Ambassador, Comfit, Moccasino - all brands
recording a high growth. In ladies segment, Marie Claire and Sundrop
brands of footwear have recorded a good growth. Your Company''s footwear
range for the children - Bubblegummer and Angry Birds continued to be
the most favourite brands in India. Evergreen brands of your Company,
viz., Power, North Star, Scholl and Weinbrenner - all have registered
growth in volume in the year 2013 as compared to the previous year
2012.
HUSH PUPPIES
Your Company''s premium Brand - Hush Puppies has been expanding in line
with the overall retail expansion program and continues to open
exclusive stores and shop-in-shop stores in premium departmental
stores. At the end of year 2013, Hush Puppies had 34 exclusive stores
and 37 shop-in-shops. Hush Puppies lives the brand vision of "Treating
the World to their favorite shoes" with exclusive retail stores, unique
products and exciting brand image. Hush Puppies range of footwear shall
continue to focus on comfort with contemporary styling, to attract
younger consumers to the brand. Your Company shall invest in various
marketing plans to re-position the brand in the minds of consumer as
international premium lifestyle casual footwear brand in India.
FOOTIN
Your Company''s new retail concept - FOOTIN offers a new range of
footwear focusing on affordable fashion and trendy styles. In FOOTIN
stores, customers can get fashionable, young looking and affordable
footwear presented through a high-density display concept. It is one of
the new business models with a different approach to improve volume
growth of your Company. During the year under review, your Company has
opened 8 new FOOTIN stores across India, with a new range of footwear
for both men and women focusing on fashionable and trendy styles at an
affordable price. These stores are unique in terms of display and
ambience and different from other footwear retail stores in India.
E-COMMERCE
The year 2013, certainly would be counted among the most active years
for E-commerce division of your Company. Your Company generated a
volume growth of almost 100% in on-line business during the year 2013
as compared to the previous year 2012. Your Company''s E-Commerce
business reached approx. 750 cities across India with its shipments. In
order to attract more e-customers, new partnerships have been entered
into by tying up with leading on-line players e.g., Flipkart, Jabong,
E-bay, HomeShop18, Myntra, Rediff, Indiatimes, etc. As a part of the
strategy, Cash on Delivery service was launched for the end customer to
facilitate the shopping ease. Your Company''s website www.bata.in has
experienced a tremendous growth in traffic of approx. 2.5 Million
visitors. Customer Service remained a focused area for the E-Commerce
business of your Company with a dedicated team continuing to serve its
on-line patrons.
Your Company will further strengthen its E-Commerce business and
establish lasting relations with the existing and new partners. The
focus would remain on customer service and swift operations to ensure
that the customers get their footwear in good condition and well in
time. The existing website www.bata.in shall also be upgraded with new
and exciting features for the customers. High importance is being given
to the social media network to ensure that the customers on the social
platform are satisfied with the product and services being rendered by
your Company.
NON RETAIL
Your Company''s Industrial division is now recognized as the leading
supplier in the safety footwear market. Not only has the division
expanded its coverage in the market but also is focused towards
upgrading the market with newer technology products. The product range
has been refreshed by launching new moulds as well as new PU-Rubber
sole collection. The customer service function has been strengthened to
provide immediate response to the queries raised by the industrial
buyers.
Your Company''s Institutional business has recorded better results in
the year 2013 as compared to the previous year. The strategy to focus
on segments like defence, canteens, education, corporate, etc. has been
fruitful and resulted in achieving good market penetration. A new range
for the healthcare segment has been launched with specialized footwear
to be used in hospitals for Doctors, Nurses, front office staff,
maintenance team, etc.
CUSTOMER CARE INITIATIVES
During the year under review, your Company has further strengthened its
customer care division. Effective and satisfactory customer service
continued to delight the customers at various points, i.e., starting at
retail stores, during the sale interaction, post sales services at
Customer Help Desk and obtaining feedback from the customers. A new
initiative - "Passion to Serve" program has been adopted for the sales
personnel which entitles them to periodic promotions. An exclusive
Customer Help Desk has been in place to assist the customer and to
locate stores, inform product availability, process online orders and
to acknowledge all their valuable feedback. On the Digital Space,
through Facebook, your Company has entered into over 100,000 customers''
personal space and acquired more than 150,000 "Like" on Bata Facebook
page.
EXPORT
Your Company''s Export sales in 2013 were Rs.147.1 Million compared to
Rs.149.8 Million in 2012. Various plans are being explored to improve
Export volume of the Company in the future.
LOGISTICS
Your Company has a well-organized Supply Chain team at its Corporate
Office in Gurgaon which controls the demand planning, replenishment,
transportation and warehousing operations. Introduction of a new Supply
Chain Planning processes has been the key highlight for the year 2013.
Critical initiatives on implementation of new Supply Chain Planning
processes will ensure right products at right stores at the right time
in right quantities and right sizes, which will improve efficiency and
reduce cost of holding inventory. This process is being implemented in
a phased manner and shall cover all the Retail Distribution Centers
(RDCs) of your Company. This initiative will reduce the out of stock
events at retail stores thereby improving the customer service levels.
Supply Chain team has also undertaken an initiative to consolidate all
the warehouses in Delhi NCR region. A detailed modernization and
consolidation plan of warehouses in other regions also has been planned
in the current financial year.
CAPITAL EXPENDITURE
The Capital Expenditure incurred during the year amounted to Rs. 774.6
million in 2013, which was predominantly due to opening of a number of
new stores and modernization of existing stores. Capital Expenditure
has also been incurred for installation of machinery and moulds to
modernize our factories.
INDUSTRIAL RELATIONS AND PERSONNEL
Your Company has continuously been working to improve human resources
competencies and capabilities in the company, which is critical to
achieve results as per the plan. Major initiatives and interventions to
this effect as taken up during the year 2013, are as under:
Building up the best team in all functional areas
During 2013 your Company has hired 171 middle and senior level
Executives for its various functional areas to replace the people
moving out, retiring, etc. with professionals having better
qualifications and experience.
Creating bench strength and building up capability for future growth
Executive Development plan
For the fourth consecutive year, your Company pursued its aim of
nurturing and developing new talent for various responsibilities. Eight
Executive trainees have been hired from various retail management
schools and trained for 9 months under the Executive Development Plan
(EDP). Five Executive Trainees, who successfully completed their
training under EDP, have been placed as District Managers across retail
operations chains.
Training and Development
a) District Manager Training
Developing and Training of internal talents continued to be the focus
area of your Company. 96 nominated District Managers across all retail
chains attended 2 days District Managers'' Training program.
b) Training of Store Employees and Store Managers/K-Scheme Agents
Imparting Training to store employees to improve their knowledge and
skill levels with an objective to provide better customer service in
retail stores remained a key focus are in the year 2013. Training was
conducted for 1,251 store employees and 317 K-Scheme Agents/Store
Managers to enhance their performance and effectiveness.
FINANCE
The Earning per Share (EPS) (Basic and Diluted) of your Company at
Rs.29.68 reflects an increase by approx. 11% as compared to EPS of
Rs.26.70 in the previous year. As informed earlier, since April-2010,
your Company does not have any Bank Borrowings and the entire capital
expenditure has been funded through internal sources.
RESEARCH & DEVELOPMENT ACTIVITIES AND ENERGY CONSERVATION
Your Company continued its local Research & Development activities
during the year under review. These R&D activities included
technological improvement in all key areas, e.g., product development,
process development, material development, footwear moulds, etc. with
emphasis on creating a pollution-free work environment. Total
expenditure incurred on Research & Development was approx. Rs. 7
Million during the year. Your Company continues to actively pursue
energy conservation measures. During the year under review, savings of
energy cost worth approx. Rs.5.5 Million was achieved through
replacement of conventional tubes with energy efficient lights,
installation of energy efficient screw compressors and adopting other
measures in its manufacturing units.
SUPPORT FROM BATA SHOE ORGANIZATION
Your Company continues to receive assistance and benefits of technical
research and innovative programmes of Bata Shoe Organization (BSO)
through Global Footwear Services Pte. Ltd., Singapore (GFS). Your
Company has renewed the Technical Collaboration Agreement with GFS with
effect from January 01, 2011 for a period of ten years. In terms of the
said Technical Collaboration Agreement, your Company receives guidance,
training of personnel and services from GFS in connection with research
& development, marketing, brand development, footwear technology,
testing & quality control, store location, layout & design,
environment, health & safety, risk & insurance management, etc. Your
Company continues to obtain expertise and experience from the visiting
senior personnel of GFS and other BSO group companies to improve its
product range and operational processes throughout the year.
In terms of the renewed Agreement as aforesaid, your Company has paid a
fee of Rs.185 Million to GFS during the calendar year 2013.
STATUTORY AUDITORS
The Statutory Auditors of the Company - Messrs. S. R. Batliboi & Co.
LLP, Chartered Accountants, retire at the ensuing Annual General
Meeting of the Company and have given their consent for re-appointment.
Your Company has also received their confirmation pursuant to Section
224(1B) of the Companies Act, 1956.
COST AUDITORS
In compliance with the Central Government''s Order dated November 06,
2012, your Board at the Board Meeting held on February 26, 2013 has
re-appointed M/s. Mani & Co., Cost Accountants to carry out the Cost
Audit of the Company in respect of Footwear. However, the Cost Audit
Branch of the Ministry of Corporate Affairs, Government of India is yet
to make the said Order effective. Your Company will file e-Form 23C as
and when the said e-Form 23C is modified by the Central Government in
line with the aforesaid Order.
The Cost Audit Report of the Company for the financial year ended
December 31, 2012 was filed by M/s. Mani & Co., with the Cost Audit
Branch, Ministry of Corporate Affairs, Government of India, on June 11,
2013.
DIRECTORS
There has been no change in composition of your Board of Directors
during the year under review. The Ministry of Corporate Affairs,
Government of India has included various provisions under the Companies
Act, 2013 relating to composition of the Board of Directors and
Committees of the Board of Directors of Indian companies. However,
these provisions of the Act are yet to be notified. Your Company will
take appropriate steps to reconstitute its Board of Directors and
Committees thereof to comply with the requirements of the new Companies
Act, 2013 and Rules framed there under in due course.
In terms of the provisions of the Companies Act, 2013 (to the extent
applicable), your Board of Directors at their Meeting held on October
30, 2013 appointed Mr. Rajeev Gopalakrishnan, Managing Director as the
''Chief Executive Officer (CEO)'' of the Company with immediate effect.
At the said Board Meeting your Board has also appointed Mr. Ranjit
Mathur, Director Finance as the ''Chief Financial Officer (CFO)'' of the
Company with immediate effect.
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of your Company, Mr. Jorge Carbajal and Mr.
Akshay Chudasama, Directors of the Company are due to retire by
rotation at the ensuing Annual General Meeting of the Company and being
eligible, offer themselves for re-election. The Board of Directors of
your Company are of the opinion that their continued association with
the Board will be beneficial to the Company and recommend their
re-election.
STATUS OF BATANAGAR PROJECT
In terms of the Order of the Government of West Bengal, total
obligation on the Company towards development of employee housing
colony at Batanagar was Rs.650 Million. The Company has already
received 315,000 sq. ft. of constructed space at Batanagar Project from
Riverbank Developers Private Limited (RDPL), the developers of the
project and had recorded a liability of Rs.216.2 Million in earlier
years for obligation yet to be fulfilled towards the balance 325,000
sq. ft. constructed space. As per the Development Agreement entered
into between RDPL and the Company in the year 2010, any liability
arising on account of non-compliance of the terms and conditions of the
aforesaid Order of the Government of West Bengal will be borne by RDPL.
Your Company alongwith RDPL has approached the Government of West
Bengal for extension of the time limit for completion of Batanagar
Project, and obtained their in-principle approval. The revised Order is
awaited. During the year, the Company has signed an Addendum to the
aforesaid Development Agreement whereby the Company shall receive
332,030 sq. ft. of constructed space in Batanagar Project against the
balance 325,000 sq. ft. of constructed space from RDPL.
DIRECTORS'' RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217 (2AA) OF
THE COMPANIES ACT, 1956
Your Directors hereby confirm:-
i) that in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;
ii) that the Directors have selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year, and of the
profit of the Company for that period;
iii) that the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;
iv) that the Directors have prepared the Annual Accounts on a going
concern basis.
SUBSIDIARY COMPANIES
Bata Properties Limited and Coastal Commercial & Exim Limited continue
to be wholly owned subsidiaries of your Company. In terms of the
Circular No.2/2011 dated February 8, 2011 issued by the Ministry of
Corporate Affairs, Government of India, your Board of Directors at
their meeting held on February 12, 2014 have given consent for not
attaching, inter alia, the Balance Sheet, Statement of Profit and Loss
and other relevant reports and statements of its subsidiary companies
to the Balance Sheet of your Company as on December 31, 2013 and have
also agreed to comply with the conditions prescribed in the said
Circular.
The Annual Reports-2013 of the aforesaid subsidiaries will be made
available to the shareholders of the Company upon receipt of written
requests from them. The Annual Reports-2013 of the aforesaid subsidiary
companies will also be kept for inspection by the shareholders of the
Company at the Registered Office of the Company and its subsidiaries
and also at the Company''s Office at 27B, Camac Street, 1st Floor,
Kolkata - 700 016 between 09:30 a.m. and 12:30 p.m. on any working day.
In compliance with the requirements of the aforesaid Circular, a
Statement showing relevant details for the year ended December 31, 2013
in respect of Bata Properties Limited and Coastal Commercial & Exim
Limited, the wholly owned subsidiaries of the Company have been
included in the Financial Statements of the Company which forms part of
this Annual Report.
CORPORATE GOVERNANCE
In compliance with the provisions of Clause 49 of the Listing Agreement
with the Stock Exchanges, the Corporate Governance Report of your
Company and Corporate Governance Compliance Certificate received from
M/s. S. R. Batliboi & Co., LLP, Chartered Accountants, the Statutory
Auditors, are attached as separate Annexure to this Report.
CONCLUSION
Your Board places on record its sincere appreciation for the
co-operation and support received from investors, shareholders,
customers, business associates, bankers, vendors as well as Regulatory
and Government authorities.
Your Board would like to thank the major Shareholder and other group
companies of Bata Shoe Organization for their guidance, support and
co-operation in smooth operations of the Company. Your Board is ever
grateful to the independent Directors for sharing their valuable
experience and wisdom with the Management in the process of finalizing
strategic decisions and oversight of the Company.
Your Board appreciates the invaluable contribution of the Senior
Management Team for their leadership and all the employees of the
Company for their indefatigable efforts which plays a pivotal role in
achieving the objectives of the Company.
For and on behalf of the Board of Directors
Place : Gurgaon Uday Khanna
Date : February 12, 2014. Chairman
Dec 31, 2012
TO THE MEMBERS
The Directors have pleasure to present the 80th Annual Report of your
Company covering the operating and financial performance for the year
ended December 31, 2012.
FINANCIAL REVIEW:
2012 2011
(in Rs.
millions) (in Rs.
millions)
Gross Turnover 18,717.54 15,650.78
Less: Excise Duty on Turnover 293.01 225.43
Net Turnover 18,424.53 15,425.35
Other Income 299.52 1,309.14
18,724.05 16,734.49
Profit / (Loss) before Depreciation & Taxation 3,033.39 3,605.04
Less: Depreciation 513.75 411.01
Profit / (Loss) before Taxation 2,519.64 3,194.03
Provision for Taxation:
- Current Tax 908.43 966.79
- Deferred Tax Charge/ (Credit) (Net) (101.44) (31.15)
- Income Tax for earlier year (3.38) -
Net Profit 1,716.03 2,258.39
(Net profit of 2011 includes Rs. 837.67 Mn
from surplus property development)
Profit available for Appropriation 5,288.76 4,245.71
OPERATIONS
During the year 2012 your Company achieved a total turnover of Rs.
18,717.54 million as compared to Rs. 15,650.78 million in 2011,
reflecting a growth of approx. 19.6% on year-on- year.
During the year under review, your Company continues to record good
growth in the performance of all its business areas. Large scale
expansion of retail stores, renovation of existing stores, improvement
in customer service, introduction of new value oriented products,
training of employees, consolidation of manufacturing processes and
focus to improve non-retail sales division, all together has yet again
enabled your Company to achieve new milestones.
Your Company always endeavours to provide good quality footwear at
affordable pricing to its customers. Use of modern technology in its
factories and consistent improvement in its manufacturing and procuring
process, enabled your Company to offer new range of trendy and
fashionable footwear at a reasonable price. Your Company''s retail
stores provide a great ambience and delightful shopping experience to
the customers through specially designed shoe display systems,
ultra-modern style, trained and friendly sales personnel and a range of
attractive accessories. During the year 2012, your Company has improved
its footwear collections under its existing brands to suit the
requirements of its customers in all categories. Your Company has also
introduced many new brands of footwear, e.g., Sundrops - a new premium
range of stylish comfortable footwear for women, ''Angry Birds'' - a
new collection of merchandise offering school shoes, casual shoes and
accessories for children and teenagers, etc.
In addition to recording a well deserved growth in its BATA HOME
delivery services during the year 2012, your Company has improved its
online shopping experience by making ''cash on delivery'' and ''multiple
order services'' for the customers. Your Company has also made tie-up
arrangements with various e-commerce sites, e.g., Jabong, Snapdeal,
India Times, Rediff, Junglee, etc., to attract potential customers
online.
Your Company continues to enjoy the highest market share in organized
footwear industry in India. In order to maintain its leadership
position and stay ahead of growing competition, your Company will
continue to innovate and move in the right direction and shall take all
available measures to improve its business performance in the years to
come.
TRANSFER TO RESERVES
The Company has transferred a sum of Rs.171.60 million to General
Reserve against Rs.225.84 million transferred last year.
DIVIDEND
The Board of Directors has recommended a dividend of Rs.6/- per share
(i.e., 60% on an equity share of par value of Rs.10/- each) for the
year ended December 31, 2012 as against Rs.5/-(i.e., 50% on an equity
share of par value of Rs.10/- each) paid last year (excluding special
dividend of Re.1/- per share for gains from surplus property
development). The payment of aforesaid dividend is subject to approval
of the shareholders at the ensuing Annual General Meeting of the
Company.
FIXED DEPOSIT
As on December 31, 2012 your Company had unclaimed matured deposits
aggregating to Rs.0.63 million. Several reminders have been sent to the
deposit holders concerned advising them to claim their matured deposits
from the Company. Presently the Company is not accepting any fixed
deposits.
CREDIT RATINGS
As informed in the previous Directors'' Report, ICRA has reaffirmed the
rating of [ICRA] A1 (pronounced as ''ICRAA one plus'') to your Company
for its CP programme. This is the highest-credit quality rating
assigned by ICRA to short term debt instruments. ICRA has also
reaffirmed the rating of [ICRA] AA (pronounced as ''ICRA double A'') to
your Company for its Line of Credit (LOC) limits of fund based /
non-fund based facilities sanctioned by the Consortium of Banks. The
outlook on the assigned rating was ''Positive.''
Your Company is in the process of obtaining revised Credit Ratings from
ICRA and expects to receive the same before March 31, 2013.
AWARDS AND RECOGNITION
Your Company has received the following Awards and Recognition, which
has made us all proud:
1. The Most Admired Footwear Brand (Retail) - Brand equity recognized
Bata as one of the ''Top most trusted brands'' in November 2012.
2. Most Admired Large Format Multi Brand Footwear Retailer of the year
- National Chain Bata - Bata India was awarded the ''Most Admired Large
Format Multi Brand Footwear Retailer of the Year - National Chain'' by
the Images Shoes & Accessories forum held at Mumbai in March 2012.
3. Customer & Brands loyalty awards in the footwear sector - Bata
India was awarded the ''Customer & Brand Loyalty Award in the Footwear
Sector '' from AIMIA at the 5th Loyalty Summit, held in Mumbai in
February 2012.
4. Most Trusted Brand at the 18th position - The Brand Trust Report
recognized Bata India as the most trusted brand at the 18th position.
This ranking is post survey of 16,000 brands out of which only 300 top
brands were felicitated by the trust advisory.
CORPORATE SOCIAL RESPONSIBILITY
As a good corporate citizen in India, your Company discharges its
Corporate Social Responsibilities (CSR) with due importance and
considers CSR as a continuous process. Your Company is committed to
preserved the nature, protect the environment, contribute to the
economic development, ensure improvement in the quality of life of its
employees and their families as well as the local communities where it
operates and also development of the society at a large, specially for
the under-previleged and differently-abled people.
The following CSR activities have been undertaken by your Company
during the year 2012:
- Your Company has organized Polio Immunization Campaign, routine
vaccination awareness camp and polio vaccination in slums near Bataganj
factory, Patna.
- Your Company is associated with Blood Donation Camp organized by
Pan India on Bata Children Program day to help children suffering from
Thalassemia.
- Your Company has celebrated World Environment Day with tree
plantations in Retail West office. Team also received a certificate of
appreciation from United Nations Environment Program (UNEP).
- Your Company has celebrated World Literacy Day with street children
by involving them into different educational fun games and donated
shoes to them in Gurgaon.
- Your Company has organized Eye Check-up Camp for the children of
Govt. Middle School, Ramjeechak at Bataganj, Patna and the children of
Bata Nursery School at Batanagar with an eye safety awareness session.
- Orphan and blind girl children were sensitized to raise awareness
about girl child rights on the occasion of First International Day of
the girl child and were given shoes in Kolkata & Patna.
- Your Company saluted the spirit of bravery of young hearts by
honouring the bravery award recipients who won the National Bravery
Award presented by the Hon''ble Prime Minster of India on the eve of
64th Republic Day on January 26, 2013. These children were given shoes,
socks and bags.
- Under Bata Children''s Program (BCP) India Initiative, this year
Bata India Limited donated 250 pairs of Black School Shoes to all the
differently-abled boys and girls in the age group of 7-23 years in deaf
and dumb school in Gurgaon.
RETAIL
Your Company has continued its strategy of expanding its retail
operations and has opened 189 new stores in 2012 across metros, tier 1
and tier 2 cities. The process of opening large format stores and
renovating the existing stores to foster contemporary appeal has also
continued with the majority of the stores above 3000 sq. ft. The
company has renovated more than 50 retail stores and closed / relocated
more than 60 retail stores. The strategy adopted by the Company has
resulted in higher sales and improved profitability leading to improved
financial results achieved by the Company in the year 2012. The Company
has also continued expansion of its Hush Puppies brand with the opening
of 15 exclusive new stores and 12 shop-in-shops stores across the
country. Your Company continues to improve the strategic positioning of
its retail stores to cater the needs of the customers and stay ahead of
competition.
All the new retail stores of your Company are made as per Bata''s global
format, designed by experienced designers and architects, using the
latest retail techniques and the best quality of furniture to enhance
stores layout and provide an attractive product display. These new
stores deliver an enjoyable shopping experience to its customers in an
aesthetically designed ambience with attentive, friendly and trained
staff.
Customer Service continued to remain the main focus during the year
2012. Many new initiatives, e.g., Home Delivery service; E-Commerce
enabled website and a dedicated call centre for customer queries and
suggestions, etc., have been introduced to enhance customer
satisfaction. Extensive training of store staff, customer response,
research management systems and customer relationship management are
some of the measures adopted by your Company for improved Customer
Services.
In order to achieve volume growth your Company has opened 10 new FOOTIN
stores across India during the year 2012, with a new range of footwear
for both men and women focusing on fashionable and trendy styles at an
affordable price. These stores are unique in terms of display and
ambience and different from other footwear retail stores in India.
Most of the existing brands of footwear sold by your Company viz.,
Comfit, Ambassador, Mocassino, Scholl, Power, North Star, etc., have
recorded a healthy growth during the year 2012. Introduction of new
range of Marie Claire shoes helped your Company gain market share in
the ladies footwear segment. Bubblegummer continues to remain the most
favourite brands amongst the children for its comfort and attractive
designs. New Brands launched in the year 2012 e.g., Sundrops,Angry
Birds, etc, have generated good response in the market.
Your Company shall continue to expand its retail operations across the
Country in the future. Opening of large format stores at strategic
locations, making available the footwear and accessories as per
customers'' choice in these retail stores and continuous improvement in
the customer services, shall be the main focus area to enhance your
Company''s market share in the organized retail footwear industry.
NON RETAIL
Your Company''s Industrial division has grown steadily year after year
and has created a niche in the safety footwear market in the country.
The Division is working with a vision to be the No.1 in the country in
Industrial footwear segment. Strong initiatives have been taken in the
year 2012 in the direction of creating technically superior merchandize
suited to the market needs. The Division also covered newer segments by
launch of new categories of products for various industrial
applications and needs of industries, e.g., construction, steel, power,
etc. A first time launch of product with PU-Rubber sole has been
planned in the first quarter of the year 2013. This is revolutionary
advancement over current products used by the smelter & chemical
industry. A strong back-up support system has been put in place to
provide personalized service to industrial buyers.
Your Company''s Institutional business has expanded its customer base in
different segments and is now introducing specialized collections with
special features for specific needs of various institutions. With its
new business expansion plan and increased focus on each specific
segment, e.g., education, defence, hospitality, security agencies &
service sector, the division is positioning itself as a footwear
solution provider.
Defence segment has also been the key focus area for the division and a
large order has been received from Indian Air force.
EXPORT
Your Company''s Export sales in 2012 were Rs 149.82 million compared to
Rs.169.34 million in 2011.
LOGISTICS
Your Company has a well-organized logistics team at its Corporate
Office in Gurgaon which controls all transport & warehouse operations.
Modernization of Retail Distribution Centre (RDC) at Bhiwandi was the
highlight of the year 2012. Infrastructure at Bhiwandi RDC has been
upgraded to meet the future requirements of the organization in line
with growth plans.
The Logistics Team of your Company has successfully implemented the
barcode enabled warehouse management system at three RDCs, i.e.
Chennai, Farrukhnagar and Bhiwandi. This initiative has significantly
increased the Inventory accuracy at RDCs.
Your Company is in the process of consolidating its warehouses across
the business categories. The consolidation process for Industrial &
Institutional business with RDCs at Farrukhnagar and Bhiwandi has been
completed and a detailed consolidation plan of warehouses is currently
under implementation.
CAPITAL EXPENDITURE
The Capital Expenditure incurred during the year amounted to Rs. 877.59
million as against Rs. 1,244.97 million (including Batanagar housing of
Rs. 433.76 million) in 2011. The capital expenditure was predominantly
due to opening a number of new stores and modernization of old stores.
Capital expenditure has also been incurred for installation of
machinery and moulds to modernize the factories and to produce footwear
of the latest trendy designs.
INDUSTRIAL RELATIONSAND PERSONNEL
Your Company has continuously been working to improve human resources
competencies and capabilities in the company to deliver results as per
the plan. Major initiatives and interventions to this effect as taken
up during the year 2012, are as under:
(i) Building up the best team in all functional areas
During 2012 your Company has recruited 43 Middle and Senior level
Executives for its various functional areas and Executives moving out,
retiring, etc. Your Company has endeavoured to get suitable replacement
with competent people for each position in the organization to ensure
smooth business operations.
(ii) Creating bench strength and building up capability for future
growth Executive Development plan
For the third consecutive year, your Company pursued its aim of
nurturing and developing new talent for various responsibilities by
successfully training its Executive Trainees. 10 Executive Trainees
have been hired from various retail management schools, who have
undertaken training for 9 months under the Executive Development Plan
(EDP) initiated by the Company in the year 2009. 7 Executive Trainees,
who successfully completed their training, have been placed as District
Managers across retail operations chains.
Training and Development
a) District Manager Training
Developing and Training of internal talents continued to be the focus
area of your Company in 2012. During the year 94 nominated District
Managers across all retail chains have attended 2 days District Manager
program.
b) Training of Store Employees and Store Managers/K-Scheme Agents
Training of shop floor employees to improve their knowledge and skill
levels with an objective to provide excellent customer service in the
retail stores continued to remain an important aspect. Accordingly,
training has been conducted for 849 store employees and 265 Store
Managers / K-Scheme Agents to enhance their performance and
effectiveness.
c) Training on topic ''5 S'' Japanese system at Bataganj Factory
Training session on ''5 S'' Japanese system on Good Housekeeping
standards for Managerial Staff, emphasizing on the fact that this
system gives the potential benefits such as safe working environment,
improvement in product, etc.
(iii) New Initiatives in the year 2012
a) BEM Interchange Program 2012 successfully launched
Bata Emerging Markets (BEM) Interchange Programme has been launched in
your Company in the year 2012. Under this programme, participants from
different countries of Bata World underwent extensive on-the-job
training for six months to enrich their skills, knowledge, abilities
and gained practical expertise in their specific area of work. They
have also been made familiarized with Bata India''s rich culture, values
and work environment. Similarly, high performing employees from your
Company have also been given opportunity to work and prove their merit
in countries, viz., South Africa, Peru, Chile and Indonesia. This
initiative has surely helped in identifying best talent across
countries and will further aide in developing them for future roles.
This program has helped create a bond in unifying Bata as "One
Company", cutting across borders of geography.
b) Talented Step-Up Program
The Step-Up Program Project has commenced under the guidance of the
representatives of Bata Shoe Organization (BSO) and approximately
spreads over a duration of three years and is composed of three phases:
the BSO Assessment, the 1.0 Talented Step Up Program and the 2.0
Talented Step Up Program. All three phases have been conducted
recently. Participants for these courses comprised of various
departments ranging from retail, merchandise to production. The aim of
the training was to equip participants with the necessary knowledge,
skills and know-how to progress from being an effective manager to a
future leader. The Emotional Intelligence training was focused on
developing the ability to perceive, control and evaluate the emotions.
The Effective Recruitment training put emphasis on how to recruit
highly skilled and competent employees. While the Strategic Planning
training session included possible avenues to develop and implement
effective strategies.
c) STEP-UP Bata 2012 Event
In 2012, Your Company has launched the Step-Up Bata 2012 Theme in an
event where 129 employees including District Managers, Retail Managers,
Buyers-Family, Flagship & Wholesale and Functional Heads were taken to
a valley of dreams in the outskirts of Manesar. The objective of the
Meet was to bring everyone on a common platform, build camaraderie,
know each other, instil team spirit and cascade the business objectives
of the Company. The Conference gave way to successful SWOT Analysis of
your Company. The highlight of the event was a glittering Awards
Ceremony where selected Executives were given Awards in appreciation of
the business acumen and hard work displayed by them.
d) Revamped Induction Program
Your Company has successfully revamped the induction program of new
joiners under the umbrella of Kaleidoscope in the year 2012. The
objective was to inspire a sense of welcome among all new joiners by
means of inter-departmental interactions, create awareness and
familiarization with cross functional systems and processes and make
all employees feel comfortable and seem no complexity in settling down
at the workplace from their very first day.
e) In-House Newsletter ''Walk of Life'' Launched
Your Company''s in-house Newsletter has undergone metamorphic
transformation in the year 2012. ''Walk of Life'' features snapshots from
the events and campaigns organized throughout Corporate Office,
Manufacturing, Retail Chains and Stores across India. It includes
snapshots of Celebrations, insight into the career path of Leadership
Team and their experience, stupendous feat achieved by the children of
the employees of your Company, accolades won by the Company all that
and much more make an interesting read inside this quarterly editions.
The focus of this Newsletter has been towards representing a spectrum
of identities, characters and voices which are important, informative,
clear, precise and most importantly, inspirational.
(iv) Celebration of Occasions
During the year under review your Company has celebrated many occasions
across its factories, offices and retail chains. Some of the
celebrations were as under:
a) Bata Children''s Program (BCP) India Initiative celebrated Christmas
with differently-abled School Children in the Deaf & Dumb School in
Gurgaon.
b) Employees'' Kids Day was celebrated at the Corporate Office at
Gurgaon.
c) Independence Day was celebrated at the Corporate Office at Gurgaon
and all other establishments of the Company across India.
d) ''Town Hall'' was organised at the Corporate Office at Gurgaon to
brief all employees about your Company''s objectives, business
performance and initiatives to be taken for achieving the long-term
goals during the year.
FINANCE
The Earning per Share (EPS) of your Company has increased by 20.8%
(from Rs. 22.11 in 2011 to Rs. 26.70 in 2012) without considering the
gains from Surplus Property Development in previous year. As mentioned
in the Annual Report of the previous years, since April 2010, your
Company is debt-free and the entire capital expenditure has been funded
through internal sources. Your Company continues to focus on cash
generation to record positive cash flow during the year under review.
RESEARCH & DEVELOPMENT ACTIVITIESAND ENERGY CONSERVATION
Your Company continued its local Research & Development activities
during the year in the key areas of product, process, material
development, footwear moulds, leather and tannery technology with
emphasis on creating a pollution-free work environment. The in-house
Research & Development Units of your Company at Batanagar, Bataganj,
Faridabad and Hosur have obtained recognition from the Department of
Scientific & Industrial Research (DS&IR) of the Ministry of Science &
Technology, Government of India. Total expenditure incurred on Research
& Development was Rs. 46.89 million during the year.
Your Company continues to actively pursue energy conservation measures.
SUPPORT FROM BATA GROUP
Your Company has seamless access to the benefits of technical research
and innovative programs of the Bata group from Global Footwear Services
Pte. Ltd., Singapore, for which your Company has paid a fee of Rs.160
million during the calendar year 2012.
Your Company continues to receive guidance and managerial support in
its various functions including store layout, marketing, shoe line,
upgradation of factories, training of managers and guidance from Bata
Shoe Organization (BSO).
STATUTORY AUDITORS
The Statutory Auditors of the Company - Messrs. S. R. Batliboi & Co.,
Chartered Accountants, retire at the ensuing Annual General Meeting of
the Company and have given their consent for re-appointment. Your
Company has also received their confirmation pursuant to Section
224(1B) of the CompaniesAct, 1956.
DIRECTORS'' RESPONSE TO THE COMMENTS MADE BY THE AUDITORS IN THEIR
REPORT
Auditors'' Report read together with Annexure referred to in Paragraph 3
of the Auditors'' Report do not contain any qualification of significant
nature. Comments under para xxi of the Annexure to the Auditors'' Report
are self explanatory and, therefore, require no further comments from
the Board of Directors.
COST AUDITORS
In compliance with the Order of the Central Government, your Board has
appointed M/s. Mani & Co., Cost Accountants to carry out the Cost Audit
of your Company in respect of Footwear. This appointment has to be made
in each financial year and based on the application of your Company the
Central Government has approved the re-appointment of the Cost Auditor
for the financial year ended December 31, 2012. Necessary application
will be made to the Central Government in due course seeking approval
to the re-appointment of the Cost Auditors for the financial year
ending December 31, 2013.
The Cost Audit reports of the Company for the financial year ended
December 31, 2011 have been filed with the Ministry of Corporate
Affairs, Cost Audit Branch, Government of India, New Delhi on December
31, 2012 within the stipulated time as extended.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of your Company, Mr. Uday Khanna and Mr. Atul
Singh, Directors of the Company are due to retire by rotation at the
ensuing Annual General Meeting and being eligible, offer themselves for
re-election. Your Board is of the opinion that their continued
association with the Board of Directors of the Company will be
beneficial to the Company and hence recommends their re-election.
Mr. Jack Clemons, a Member of your Board of Directors has been
appointed as the new Chief Executive Officer of Bata Shoe Organization
(BSO). Your Board is happy to have continued participation and guidance
of Mr. Jack Clemons as a Non Executive Director on the Board of
Directors of your Company. Mr. Clemon''s appointment as the new CEO of
BSO shall help your Board in guiding your Company to achieve its
objectives going forward.
At the Board Meeting held on July 26, 2012, Mr. Gigi Abraham was
appointed as the Group Brands Director of the Company for a period of
five years, subject to approval of the shareholders at the forthcoming
Annual General Meeting. The remuneration of Mr. Abraham as Group
Brands Directors fixed by your Board falls within the overall limits
specified under the CompaniesAct, 1956 and as approved by the
Shareholders at the 76th Annual General Meeting held on May 26, 2009.
However, Mr. Abraham vide his letter dated December 19, 2012 tendered
his resignation. Your Board at their Meeting held on February 26, 2013
accepted the resignation of Mr. Abraham with effect from December 19,
2012.
Accordingly, approval of the Shareholders is being sought at the
forthcoming Annual General Meeting to the appointment and payment of
remuneration to Mr. Gigi Abraham as Group Brands Director during the
tenure of his directorship in the Company, i.e. for the period from
July 26, 2012 to December 19, 2012 (both days inclusive).
BATANAGAR PROJECT
As mentioned in the Annual Reports of earlier years, in April - 2010,
your Company restructured itsAgreements with the Joint Venture Partners
with revised terms and conditions for the development of the modern
integrated township at Batanagar, West Bengal.
Pursuant to the restructuring of these Agreements, Riverbank Developers
Private Limited (RDPL) ceased to be a jointly controlled entity during
the previous year. Your Company has already fulfilled its obligation
towards development of employee housing colony at Batanagar and met its
obligation towards investment in the factory and retail stores in the
State of West Bengal as mentioned in the said Order. The development of
Batanagar Project is in progress and your Company will receive
approximately 324,550 square feet of constructed space at no additional
cost in a phased manner from the Developers.
Notwithstanding the aforesaid restructuring of Agreements, your Company
continues to remain committed to the Government of West Bengal in terms
of their approval on Batanagar Project. In order to meet its remnant
obligations, your Company is carrying a liability of Rs. 216 million in
its books of accounts as on December 31, 2012. Your Company will make
additional investments to improve and modernize its factory at
Batanagar and also for revitalization and rejuvenation of its employees
at Batanagar in the years to come.
DIRECTORS'' RESPONSIBILITY STATEMENT PURSUANT TO PROVISIONS OF SECTION
217 (2AA) OF THE COMPANIESACT, 1956
Your Directors hereby confirm:-
i) that in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;
ii) that the Directors have selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year, and of the
profit of the Company for that period;
iii) that the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;
iv) that the Directors have prepared the AnnualAccounts on a going
concern basis.
SUBSIDIARY COMPANIES
Bata Properties Limited and Coastal Commercial & Exim Limited continue
to be wholly owned subsidiaries of your Company. In terms of the
Circular No.2/2011 dated February 8, 2011 issued by the Ministry of
Corporate Affairs, Government of India, a general exemption has been
granted from the compliance of Section 212 of the Companies Act, 1956,
requiring holding companies to attach with their balance sheet, a copy
of the balance sheet, profit and loss account and other documents of
each of its subsidiaries, provided that the Board of Directors of such
companies have given consent, by way of a resolution, for not attaching
the Accounts & Reports of the subsidiary companies concerned with the
balance sheet of the Company and that the conditions prescribed in the
said Circular are complied with. Your Board at their meeting held on
February 26, 2013 have given their consent for not attaching, inter
alia, the balance sheet, profit and loss account and other relevant
reports and statements of its subsidiary companies to the balance sheet
of your Company as on December 31, 2012 and have also agreed to comply
with the conditions prescribed in the said Circular.
In view of the above Circular, the balance sheet, profit and loss
account and other documents and statements of the aforesaid two
subsidiaries have not been attached to the Balance Sheet as on December
31, 2012 of your Company. The Annual Reports -2012 of the aforesaid
subsidiaries will be made available to the Shareholders of the Company
upon receipt of written requests from them. The Annual Reports -2012 of
the aforesaid subsidiary companies will be available for inspection by
the Shareholders of the Company at the Registered Office of your
Company and its subsidiaries and also at the Company''s Office at 27B,
Camac Street (1st Floor), Kolkata - 700 016 between 09.30 a.m. and
12.30 p.m. on any working day.
In compliance with the requirements of the aforesaid Circular, a
Statement showing relevant details for the year ended December 31, 2012
of Bata Properties Limited and Coastal Commercial & Exim Limited, the
wholly owned subsidiaries of the Company have been included in the
Consolidated Financial Statements of the Company which forms part of
this Annual Report.
CORPORATE GOVERNANCE
Your Company believes that Corporate Governance is a way of life rather
than something to be carried out under legal compulsion. Your Company
is committed to the application of the best management practices,
compliance with law, adherence to ethical standards and discharge of
social responsibilities. Your Company has introduced adequate checks
and balances in all spheres of its activities to ensure protection of
all stakeholders'' interest. Your Company also endeavours to share with
its stakeholders openly and transparently information on matters which
have a bearing on their economic and reputational interest. This calls
for a great degree of judgment and discretion so as not to put business
and commercial interest of the Company at risk.
Corporate Governance Report as well as Corporate Governance Compliance
Certificate received from the Statutory Auditors is provided as
separate Annexure to this Report.
CONCLUSION
Your Board place on record their sincere appreciation for the
cooperation and support received from investors, dear shareholders,
customers, business associates, bankers, vendors as well as regulatory
and government authorities.
Your Board would like to thank the Management of the Company and also
thank the nominated Directors on the Board and the Major Shareholders
for their complete support in smooth operations of your Company. Your
Board is very grateful to the Independent Directors for their valuable
contributions. All of them despite other business exigencies have
shared their rich experience and knowledge with the management to take
your Company forward. Your Board would also like to thank all the
employees and staff of the Company and wish them all the best for
achieving many new milestones in the future.
For and on behalf of the Board of Directors
Uday Khanna
Gurgaon, February 26, 2013. Chairman
Dec 31, 2010
The Directors have pleasure to present the 78th Annual Report of your
Company covering the operating and financial performance for the year
ended December 31, 2010.
FINANCIAL REVIEW:
2010 2009
(in Rs 000) (in Rs 000)
Gross Turnover 12,770,888 11,125,882
Less: Excise Duty on Turnover 188,945 209,365
Net Turnover 12,581,943 10,916,517
Other Income 152,529 84,228
12,734,472 11,000,745
Profit / (Loss) before Depreciation
& Taxation 1,755,076 1,281,868
Less : Depreciation 325,104 279,234
Profit / (Loss) before Taxation 1,429,972 1,002,634
Provision for
Taxation :
-Current Tax 546,378 401,757
- Deferred Tax Charge/(Credit) (Net) (69,926) (66,361)
- Fringe Benefit Tax à 1,722
- Tax for Earlier Years à (6,756)
Net Profit 953,520 672,272
Profit
available for Appropriation 2,381,675 1,720,938
OPERATIONS
During the year 2010 your Company achieved a total turnover of Rs.
12,770.9 million as compared to Rs.11,125.9 million in 2009, which
reflects a growth of around 15%.
Your Company has undergone a transformation in all areas of its
business whether it is sales, profitability, shoe line, visibility and
the ambience of its stores. In the last 4 years, 72% of the stores have
been renovated.
Due to the continuous and ongoing process of restructuring being
adopted by your Company in all areas of its operations, there has been
improvement in manufacturing, changes in sourcing, credit management,
retail restructuring, labour union - management relationship, retail
expansion programs, training and development, team building, internal
controls, borrowings, working capital management, business processes,
corporate governance, de-risking the business of the Company and now
introduction of the Home Delivery Service of shoes for the convenience,
comfort and choice of our valued customers. Using this service,
customers can now place orders for any footwear which they are unable
to find in a Bata store and get it home delivered through courier with
no extra cost.
The Company continues to focus on improving its collections by
introducing a fresh range regularly and outsourcing some parts to get
better margins. The cash flows from higher margins are used to expand
our business primarily through large format stores. In order to improve
quality and to reduce costs, our factories have been specialized to
make footwear of particular variety. Hosur Factory specializes in Hush
Puppies, Bangalore Factory makes School shoes and Batanagar turns out
sports shoes and sandals. All these efforts have yielded improved
margins for the Company and improved production to become more
competitive.
Your Company has won the "Consumer Awards 2010" as "Indias Most
Preferred Retailer" given by CNBC Awaaz. This award was won amongst
stiff competition from other leading retailers and is one of the most
prestigious awards the country has to offer. Your Directors are proud
in receiving this Award and the credit for this goes to every employee
who has worked so hard in shaping the future of the Company. Your
Company
has been consistently showing improved results in each quarter and we
are now in a position to take calculated business risks to focus on
volume growth and to make a deeper penetration in the market place.
Your Company will continue to grow its business by focusing on tier 2
and tier 3 cities where the potential for growth is enormous.
TRANSFER TO RESERVES
The Company has transferred a sum of Rs. 95.4 million to General
Reserve against Rs.67.2 million last year.
DIVIDEND
The Board of Directors have recommended a dividend of 40% for the year
ended December 31, 2010 as against 30% paid last year, subject to
approval of the shareholders at the ensuing Annual General Meeting of
the Company.
FIXED DEPOSIT
As on December 31, 2010 the Company has Rs 1.47 million unclaimed
matured deposits. Necessary reminders have been sent to the deposit
holders advising them to claim their deposits from the Company.
Presently the Company is not accepting any fixed deposits.
CREDIT RATINGS
ICRA has reaffirmed the rating of A1+ to your Company for its CP
programme. This is the highest-credit quality rating assigned by ICRA
to short term debt instruments.
AWARDS AND RECOGNITION
Your Company has received the following Awards and Recognition, which
has made us all proud:
1. Bata India Limited was awarded CNBC Awaaz Consumer Awards 2010 for
"Indias Most Preferred Exclusive Brand Retail Outlet" in July 2010.
Mr. Marcelo Villagran, Managing Director was felicitated by Mr. Pranab
Mukherjee, Honble Finance Minister of India in a ceremony held in
Mumbai.
2. Brand Equity recognized Bata in the TOP 50 Most Trusted Brands
in August 2010. Bata is the only lifestyle retailer in the top 50
brands.
3. Bata India Limited was listed amongst Indias Largest Corporations
by Fortune India Magazine in December 2010.
4. Bata Industrials received Directorate General Mines Safety
Certification for its PU Sole Safety Footwear range.
5. Bata India Limited received Images Fashion Award for the Most
Admired Retail Partner of the Year in January 2010.
6. Bata India Limited was awarded "Retailer of Year (Footwear / Non
Apparel)" by the Asia Retail Congress. Mr. Marcelo Villagran, Managing
Director received the award in a glittering ceremony at Mumbai on 8th
February 2011.
7. Bata India Limited received the "Most Admired Footwear Brand" of
the year award by Images Fashion Forum in Mumbai on 18th February 2011.
8. Amity University awarded Bata India Limited "Corporate Excellence
Award for the Best Retail Chain" during the international business
summit on 23rd February 2011.
9. Bata India Limited was recognized as the Most Trusted Brand at 18th
position by the Brand Trust Report. This ranking is post survey of
16,000 brands; only 300 top brands were felicitated by The Trust
Advisory.
CORPORATE SOCIAL RESPONSIBILITY
The following CSR activities were undertaken by your Company during the
year 2010:
- Shoes, slippers and stationery were donated to children in orphanage
and tribal children under "Bata Children Program" across India.
- The Company provided support to the disaster affected people by
promptly sending in shoes after the earthquake in Ladakh.
- Free Medical check up and blood donation camp organized in Batanagar.
- The Company encourages entrepreneurial spirit in the small scale
business located in the vicinity of its factories so that they become
independent associates and partners in progress. This generates
employment in the area giving opportunities for people to grow.
- The Company is providing free medical services to the people living
near the factory in Bataganj (Patna) and also free drinking water
facilities to the inhabitants residing around the factory.
- Bata Sports Club, Kolkata provides cricket and football coaching and
guidance to budding talents through the services of renowned sporting
personalities.
- Bata School of Cricket participated in Cricket Association of Bengal
tournaments in junior group (Under - 14 & 17 Years).
- Organized sports day on the occasion of Childrens Day for the
underprivileged children from various NGOs/projects in Kolkata.
RETAIL
The year 2010 has been a milestone year for Bata Indias retail
business, with opening of 108 new large format stores across all major
towns in India. With more than 1200 stores across 400 cities, the Bata
Store is one of the most recognizable and favoured landmark in any
major market in India.
In Retail, your Company continues to improve the strategic positioning
of its stores to cater to the masses and compete better in future with
over 60 new Bata Stores opened every year, and existing stores being
renovated during the year. The growth of the retail business with
penetration in newer markets - especially Tier 2 / Tier 3 cities and
growth in existing metro market is the focus for Bata India. All the
new stores are in large format, with an average size of over 3000 sq.
ft. and offer an incomparable footwear shopping experience to the
customer. The renovated stores are also modeled on these large format
stores and promise a great shopping experience.
The specially designed shoe display systems, unique furniture for
non-footwear sales, contemporary styling, and great ambience ensure
that these new Bata Stores provide the best retail environment to its
customers, so as to make their footwear shopping experience at Bata a
very endearing one.
The large and international layout of these stores help in better
exhibition and display of the several footwear concepts from Batas new
shoe collection.
The collection improved tremendously during the year 2010, with the
company launching trendy and fashionable designs which appealed to
todays youngsters. The new collection was well received and ensured
that the brand enjoyed great customer support and loyalty. Batas
leadership in the dress comfort segment continues and Comfit,
Ambassador and Mocassino brands have grown very well. For the ladies
segment, Batas popularity continues to grow with the trendy Marie
Claire range and its latest designs to enhance a womans femininity,
sensuality and individuality. The youth focused brand North Star and
specialty outdoor brand Weinbrenner presents new trendy designs with an
increased focus on casual styles.
The premium brand of Hush Puppies offers city casual styles to
customers while Scholl & Comfit are offered with fresh younger designs
for absolute comfort with style. Popular amongst the tiny tots,
Bubblegummers continue to allure them with its trendy and lightweight
all-weather footwear.
Customer Service remained our focus with launch of new initiatives like
Home Delivery service, e-commerce enabled website and a dedicated call
centre for customer queries and suggestions. Extensive training of
store staff, customer response and research management systems, and
customer relationship management remained focal areas for the Company.
NON RETAIL
The Non Retail business has shown remarkable growth in business and
profits over last year. New dealerships were opened in unrepresented
areas to increase the market coverage. New products launched by the
Company resulted in serving many more customers.
The Company is concentrating on the top distributors and working with
them to grow our business. Constant incentive programs were offered to
existing dealers to ensure growth in wholesale business.
Bata Industrials & Institutional business has been steadily growing for
last 2 years and is expected to grow at a healthy rate for next couple
of years. Country wide distribution network has been established to
harness the market potential to become market leaders in next 2 years.
Bata Industrial collection has been awarded BIS & DGMS certification
which will allow us to serve more customers.
The Company has invested its resources in the factory to meet the
stringent technical specifications and standards of the safety footwear
business and ensure that our products are the best in the market.
EXPORT
Your Companys Export sales in 2010 were Rs 117.7 million compared to
Rs.77.7 million in 2009.
LOGISTICS
Your Company has a well organized Logistic Team at Gurgaon which
controls the distribution process and ensures that footwear of the
right size is available at the right time and at right place, to our
customers all over the country. Your Companys endeavour is to keep
improving its distribution process through greater use of Technology
inputs to track the rapid changes in consumer preferences and shopping
practices. To support and deliver the growth projections, your Company
is strengthening its Logistics Infrastructure through restructuring and
consolidation of the space at various Regional Distribution Centres
(RDCs), introduction of modern infrastructure and new technologies,
reduction in product transit lead-times and faster and more frequent
deliveries to stores.
CAPITAL EXPENDITURE
The Capital Expenditure incurred during the year amounted to Rs. 580.4
million as against Rs.436.1 million in 2009. The increase in capital
expenditure was predominantly due to opening a number of new stores and
modernization of old stores. Capital expenditure has also been incurred
for installation of machinery and moulds to modernize our factories and
to produce latest trendy design footwear.
INDUSTRIAL RELATIONS AND PERSONNEL
Your Company has continuously been working to improve human resources
competencies and capabilities in the company to deliver results as per
the plan. Highlighted here are some of the initiatives and
interventions taken up during the year 2010 :
Strengthening and Re-designing Organization structure
To strengthen the organization in the area of sourcing quality
products, a new procurement function has been setup to support our
sourcing from external vendors. All the teams which were earlier
working for different category have become part of this team with the
objective of sourcing quality and cost effective product on time. The
function is headed by a Vice President - Procurement and based at
Gurgaon. 17 new professionals are recruited in various disciplines to
support the functions like quality control, vendor development,
compliance, etc.
Revamping of Logistics function
All 5 Regional Distribution Centres (RDC) teams are restructured over a
period of last six months. Your Company has hired total 21 new
professional executive including 5 RDC managers during last year and
now all our RDCs are managed by experienced professional managers hired
from other retail organization. Your Company is now working on
improvement in overall inventory and logistics management improvement
to cater to all its stores across chains.
Building up the best team in all our functional areas
During 2010 your Company has hired 71 Middle and Senior level
Executives for its various functional areas and people moving out,
retiring etc. had been replaced with professionals with better
qualification and experience.
Creating bench strength and building up capability for future growth
a) Executive Development plan
For the second consecutive year, your Company pursued its aim of
nurturing and developing new talent for various responsibilities by
successfully training its Executive Trainees. 13 executive trainee have
been hired from various retail management schools who have gone through
9 months Executive Development Plan (EDP) which was initiated in the
year 2009.
Total 13 executive trainees, who successfully completed their training,
have been placed as District Managers across chains in retail
operations in 2010.
Many more executives have been hired during 2010 for retail operation,
merchandising and whole sale, etc.
b) Graduate Engineers Development Plan
Your Company has also initiated process of hiring and training
engineers for its manufacturing division. In the first batch of
Graduate Engineer Trainees (GETs) a total of 11 graduate engineers
were inducted at Batanagar. The one year duration training program is
currently underway. During the initial phase of their training of 4
months at Batanagar, the trainees have been placed to different units
to take up On-the-Job training in their final phase of training.
Training and Development
a) Training of store staff, Store Managers and K-Agents
Developing and Training of internal talents continued to be the focus
area of your Company in 2010. Identified employees with potential for
growth were put on specific developmental plan, Training was conducted
for 1905 store employees and 150 store managers and K-Agents to enhance
their performance and effectiveness.
b) Store operations management course seminar
In September 2010, Bata India organized a seminar on Store Operations
Management Course leaded by Ms. Serena Di Sarra (Course Leader &
Business Analyst, Global Footwear Services) for the merchandisers and
district managers from all over the region. The objective of the course
was to equip participants with the best tools and skills to excel in
the area of retail operations.
During the seminar, the participants got an opportunity to interact
one-on-one with the leadership team and consolidate their analytical
skills, share best practices and familiarize themselves with Bata store
operations management process.
Total 15 participants from Kenya, Malaysia, Bangladesh, Thailand, Sri
Lanka and India attended this five days program.
c) Store Management Course and Winning Merchandise Course
Nominated buyers, retail manager and district managers from retail
operations attended winning merchandising course in Nairobi and
Singapore. The program have helped them to broaden their horizon on
different facets of merchandise and overall retail management and
operations.
Merchandising seminar
A Merchandising Seminar was held, led by Ms. Gerry Tham, the then Chief
Buyer - Family concept and attended by merchandisers and distributors
with great enthusiasm. The focus was on providing a massive opportunity
to all our participants to consolidate their critical expertise and
familiarize themselves with Bata Merchandise Management.
Millennium Club 2010
Your Company recognized the achievement of the members of Millennium
Club 2010. The Millennium Club is a recognition program for all Retail
stores in Bata India Ltd. with an aim of acknowledging the superior
performance and extra efforts put in by the store managers who have
achieved a turnover of over Rs. 20 million and above during the
preceding year.
As a token of appreciation, the members were presented with trophies,
certificates and lapel pins for themselves and their team members, by
the Managing Director. This appreciation reinforced their commitment
and passion towards achieving the goals of the Company.
Performance management: through Quarterly Performance Review.
Your Company initiated a quarterly performance review process for all
the operational Retail Managers and District Managers. This process
very clearly defines their objectives and achievements. This review
takes place in retail chain office by the immediate supervisor before
HR representative and feedback of the last quarter is given to the
assessees and also their target for the next quarter is set. The
overall process has been extremely helpful in setting up a process of
continuous performance measurement and performance enhancement.
Information in terms of Section 217(2A) of the Companies Act, 1956 read
with the Companies (Particulars of Employees) Rules, 1975 is set out in
an Annexure to this Report.
FINANCE
The Earning per Share (EPS) (Basic and Diluted) of your Company has
increased substantially by 41.87% (from Rs.10.46 in 2009 to Rs.14.84 in
2010).
Your Company is out of Bank Borrowings since April 2010 as against
Rs.146.5 million at the end of 2009, despite the entire capital
expenditure and VRS funded through internal accruals.
RESEARCH & DEVELOPMENT ACTIVITIES AND ENERGY CONSERVATION
Your Company continued its local Research & Development activities
during the year in the key areas of product, process, material
development, footwear moulds, leather and tannery technology with
emphasis on creating a pollution-free work environment. Total
expenditure incurred on Research & Development was Rs. 50.1 million
during the year.
Your Company continues to actively pursue energy conservation measures.
SUPPORT FROM BATA GROUP
Your Company has seamless access to the benefits of technical research
and innovative programmes of the Bata group from Global Footwear
Services, for which it paid a fee of Rs.135.0 million during the
calendar year 2010.
The Company continues to receive guidance and managerial support in its
various functions including store layout, marketing, shoe line, up
gradation of factories, training of managers and guidance from senior
most managers of the group. The Technical Collaboration which expired
on December 31, 2010 has been renewed for a further period of 10 years.
STATUTORY AUDITORS
The Statutory Auditors of the Company - Messrs. S R Batliboi & Co.,
Chartered Accountants retire at the ensuing Annual General Meeting of
the Company and have given their consent for re-appointment. Your
Company has also received their Certificate pursuant to Section 224(1B)
of the Companies Act, 1956.
DIRECTORS RESPONSE TO THE COMMENTS, IF ANY, MADE BY THE AUDITORS IN
THEIR REPORT
Auditors Report read together with Annexure referred to in Paragraph 3
of the Auditors Report do not contain any qualification of significant
nature and do not call for any explanation / clarification.
COST AUDITORS
In compliance with the Central Governments Order, your Board has
appointed Messrs. Mani & Co., Cost Accountants to carry out the Cost
Audit of the Company in respect of Footwear. This appointment has to be
made in each financial year and based on the application of your
Company, the Central Government has approved the re-appointment of the
Cost Auditor for the current financial year.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of your Company, Mr. P M Sinha and Mr. U
Khanna, Directors of the Company are due to retire by rotation at the
ensuing Annual General Meeting of the Company. Mr. P M Sinha, Chairman
of the Board has decided not to seek any re-election. Mr. Sinha will,
however, be stepping down from the Board after the conclusion of the
78th Annual General Meeting of the Company. The Company has achieved
several milestones during his tenure as the Chairman. The Board of
Directors of your Company wishes to place on record its sincere
appreciation for the valuable services rendered by Mr. P M Sinha during
his tenure as the Chairman. The Board wishes Mr. Sinha good health in
the ensuing years. Mr. U Khanna, being eligible, offers himself for
re-appointment as a Director on the Board of your Company.
Mr. Shaibal Sinha, Director Finance of your Company resigned from the
Board with effect from September 7, 2010 and the Board accepted his
resignation with effect from the same date. The Board of Directors of
your Company wishes to place on record its sincere appreciation for the
valuable services rendered by Mr. Shaibal Sinha during his tenure as
Director Finance of the Company.
The Nomination, Governance & Compensation Committee recommended to the
Board which was agreed by the Board that Mr. Fadzilah Mohd. Hussein be
appointed as an Additional Director on the Board of your Company with
effect from July 29, 2010. The Company has received a notice in writing
from a Member of the Company under Section 257 of the Companies Act,
1956 signifying his intention to propose the appointment of Mr.
Hussein. Your Board, at the said Meeting has also appointed Mr. Hussein
as Director Finance for a period of 5 (five) years with effect from
October 01, 2010, subject to approval of the shareholders and also
fixed his remuneration within the overall limits specified under the
Companies Act, 1956 and as approved by the Shareholders at the 76th
Annual General Meeting held on May 26, 2009. The aforesaid appointments
of Mr. Hussein are being proposed by separate Resolutions which form
part of the notice of the Annual General Meeting.
The Nomination, Governance & Compensation Committee recommended to the
Board which was agreed by the Board that Mr. Rajeev Gopalakrishnan be
appointed as an Additional Director on the Board of your Company with
effect from February 23, 2011. The Company has received a notice in
writing from a Member of the Company under Section 257 of the Companies
Act, 1956 signifying his intention to propose the appointment of Mr.
Gopalakrishnan. Your Board, at the said Meeting has also appointed Mr.
Gopalakrishnan as Managing Director-Bata Stores, Bata India Limited for
a period of 5 (five) years, subject to approval of the shareholders and
also fixed his remuneration within the overall limits specified under
the Companies Act, 1956 and as approved by the Shareholders at the 76th
Annual General Meeting held on May 26, 2009. The aforesaid appointments
of Mr. Gopalakrishnan are being proposed by separate Resolutions, which
form part of the notice of the Annual General Meeting.
At its Meeting held on April 28, 2011 the Nomination, Governance &
Compensation Committee recommended to the Board which was agreed by the
Board that Mr. Atul Singh and Mr. Akshay Chudasama be appointed as
Additional Directors on the Board of Directors of your Company with
effect from April 28, 2011. In terms of Section 260 of the Companies
Act, 1956 both Mr. Atul Singh and Mr. Akshay Chudasama hold office upto
the date of the forthcoming Annual General Meeting. The Company has
received separate Notices in writing from a Member of the Company under
Section 257 of the Companies Act, 1956 signifying his intention to
propose the appointments of Mr. Atul Singh and Mr. Akshay Chudasama as
Directors of the Company, liable to retire by rotation. The
appointments of Mr. Atul Singh and Mr. Akshay Chudasama as Directors of
the Company are being proposed by separate Resolutions, which form part
of the Notice of this Annual General Meeting.
BATANAGAR PROJECT
Your Company has restructured the Agreements with revised terms and
conditions for development of the modern integrated township project at
Batanagar. This has been done to ensure that the development of the
project proceeds with due urgency and your Company manages to focus on
its core businesses. The restructured Agreements have been signed on
April 28, 2010. As envisaged, the project is progressing in full swing.
The employees of the Company at Batanagar Factory have been shifted to
The Bata Rehabilitation Housing Complex, located next to the Batanagar
Factory. This Housing Complex has defined a new way of living for the
employees as the new flats are full of amenities, e.g., Central open
space for community functions, Storm water drainage system, PG Gas
Connections replacing earlier stove systems, state-of-the-art
multipurpose grounds for various kinds of sports, good housekeeping
system, etc. In consideration of the restructured Agreements, the
Company has received an aggregate amount of Rs.1,000.0 million in cash
for future transfer of shares in the Joint Venture Company - Riverbank
Developers Private Limited (RDPL) and variation of the development
rights for the project. However, the condition precedent to recognizing
such sale of investment and variation of rights in the joint
development agreement had crystallized in the month of March, 2011 and
consequently, the gains of Rs. 1,093.55 million before tax arising on
the said transaction have been recognized in the Books of the Company
during the financial year 2010-11. Further, as part of consideration,
your Company is yet to receive 3,24,550 sq. ft. of constructed space at
no additional cost as per the terms of the agreements. Pursuant to
such restructuring, your Company has disposed off its stake in joint
venture with RDPL.
Notwithstanding the aforesaid restructuring of Agreements, your Company
continues to remain committed to the Government of West Bengal in terms
of the approval given by it. The Companys factory will continue to
operate from its present site and the Company will continue to make
additional investments in the factory for its modernization and for the
revitalization and rejuvenation of the employees of the Company at
Batanagar. The Companys commitment to its employees and the Government
of West Bengal remains undiminished.
DIRECTORS RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217 (2AA) OF
THE COMPANIES ACT, 1956
Your Directors hereby confirm :-
i) that in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;
ii) that the Directors have selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year, and of the
profit of the Company for that period ;
iii) that the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;
iv) that the Directors have prepared the Annual Accounts on a going
concern basis.
SUBSIDIARY COMPANIES
As required under Section 212 of the Companies Act, 1956, the Audited
Balance Sheet and Profit & Loss Account along with the respective
Reports of the Auditors and the Board of Directors thereon of the
subsidiary companies of the Company for the year ended 31 December 2010
are attached.
CORPORATE GOVERNANCE
Your Company believes that Corporate Governance is a way of life rather
than something to be carried out under legal compulsion. Your Company
is committed to the application of the best management practices,
compliance with law, adherence to ethical standards and discharge of
social responsibilities. Your Company has in all spheres of its
activities adequate checks and balances to ensure protection of
interest of all stakeholders. Your Company also endeavours to share
with its stakeholders openly and transparently information on matters
which have a bearing on their economic and reputational interest. This
calls for a great degree of judgment and discretion so as not to put
business and commercial interest of the Company at risk.
Corporate Governance Report as well as Corporate Governance Compliance
Certificate received from the Statutory Auditors is provided as
separate Annexure to this Report.
CONCLUSION
The Directors place on record their sincere appreciation for the
cooperation and support received from investors, our dear shareholders,
customers, business associates, bankers, vendors as well as regulatory
and governmental authorities.
The Directors appreciate the invaluable contribution of the management
team under whose determined efforts the Company has been able to
achieve all its major targets in 2010.
The Board would also like to thank the Managing Director and the
Director Finance, the nominated Directors on the Board and the Major
Shareholders for their complete support in revamping the operations of
the Company. We are also very grateful to our independent Directors who
despite their busy schedules have given their contributions and shared
their valuable experience and knowledge with the Management to take the
Company forward. We wish the Management all the best for achieving even
greater heights in the future.
For and on behalf of the Board of Directors
P M Sinha
Chairman
Gurgaon, April 28, 2011.
Dec 31, 2009
The Directors have pleasure to present the 77th Annual Report of your
Company covering the operating and financial performance for the year
ended December 31,2009.
FINANCIAL REVIEW:-
2009 2008
(in Rs000) (in Rs000)
Turnover 11,125,882 10,123,323
Less: Excise Duty 209,365 253,843
Net Turnover 10,916,517 9,869,480
Other Income 84,228 111,996
11,000,745 9,981,476
Profit / (Loss) before
Depreciation & Tax 1,281,868 908,410
Less: Depreciation 279,234 190,009
Profit / (Loss) before Taxation 1,002,634 718,401
Provision for Taxation :
-Current Tax 401,757 247,554
- Deferred Tax-(Net credit) (66,361) (147,521)
- Fringe Benefit Tax 1,722 11,000
- Tax for earlier years (6,756) --
Net Profit 672,272 607,368
Available for Appropriation 1,720,938 1,297,366
OPERATIONS
During the year your Company achieved a total turnover of Rs. 11,126
Million as compared to Rs. 10,123 Million in 2008, which is a growth of
around 10%.
The Company continued re-engineering of all its operations with a
special focus to give the best service to its customers and improve
Bata brand image. During the year 2009, the Company continued with its
strategy of opening new stores and renovating existing stores. These
new stores are in large format and help in better display of the
collection and offer better service to the customers. The Company is
getting very positive response from its valued customers and they have
appreciated the new quality and the improved shoe designs.
The Wholesale business has also shown commendable performance and the
exclusive brands which have been created for this segment has been very
well received by the customers.
It will be our endeavour to focus on the Wholesale business to give us
volume growth in the future.
The company is continuing with its plans to grow its safety footwear
and institutional business and is putting more resources in these
areas.
TRANSFER TO RESERVES
The Company has transferred a sum of Rs 67.227 Million to General
Reserve against Rs 60.737 million last year.
DIVIDEND
The Board of Directors have recommended a dividend of 30% for the year
ended December 31,2009 as against 25% paid last year subject to the
approval of shareholders in the ensuing Annual General Meeting of the
company.
FIXED DEPOSIT
As on December 31, 2009 the Company has Rs. 1.757 million unclaimed
principal deposits. Necessary reminders have been sent to deposit
holders to claim their deposits from the Company. The Company presently
is not accepting any fixed deposits.
CREDIT RATINGS
ICRA has reaffirmed the rating of A1+ to your company for CP programme.
This is the highest-credit quality rating assigned by ICRA to short
term debt instruments.
AWARDS AND RECOGNITION
Your Company has won numerous Awards / Recognitions in 2009 which
signifies the strong perception and preference of its brand vis-a-vis
other competing brands.
The more significant awards won by the Company in 2009 are as follows:
1. Awarded Amity Corporate Excellence Award - 2009 in a ceremony held
in Amity Business School, NOIDAon February 27,2009. Bata received the
award for the third time.
2. Business Week lists Bata India in list of "The worlds 25 Unsung
Innovative Companies" in its May 2009 issue. The report was compiled by
Boston Consulting Group, Business Weeks partner in Annual Most
Innovative Companies Special.
3. Awarded Outstanding Sales performance for Year 2008 for Hush
Puppies by Wolverine Group- Announced in May 2009 in Michigan.
4. Brand Equity recognized Bata in the TOP 50 Most Trusted Brands in
June 2009. Bata is the only lifestyle retailer in the top 50.
5. Bata India awarded the prestigious Images award of the year for the
Most Admired Retailer of the Year- Fashion & Lifestyle in Mumbai on
September 16,2009.
6. Bata India awarded the Most Admired Footwear Brand by Images
Fashion Forum in 2009. The ceremony was held in Mumbai on January
28,2009.
7. Bata India received the Amity HR Excellence Award for Corporate
Ethics on 28th August 2009 in a ceremony held at Amity Business School,
NOIDA.
8. Bata India is selected as a POWERBRAND in the POWERBRANDS 2010. The
selection is done after an extensive pan India research by Indian
Council for Marketing Research to select The Most Powerful Brands in
India in the year 2009.
CORPORATE SOCIAL RESPONSIBILITY
The following CSR activities were undertaken by the company during the
year 2009:
- Sponsorship of Rain Water Harvesting Project in Gurgaon.
- Slippers and sandals donated to children in Orphanage.
- Free Medical check up and blood donation camp organized in Batanagar.
- Distribution of blankets to poor and books to economically weak
students in Ram Krishna Mission School at Batanagar.
- The company encourages entrepreneurial spirit in the small scale
business located in the vicinity of its factories so that they become
independent associates and partners in progress. This generates
employment in the area giving opportunities for people to grow.
- The company maintains a temple, a church and a mosque where employees
and people from different communities in the neighborhood participate
in prayers.
- The company is providing free medical services to the people living
near the factory in Bataganj (Patna) and also free drinking water
facilities to the inhabitants residing around the factory.
- Bata School of Cricket provides coaching and guidance to budding
talents through the services of renowned cricket personalities.
RETAIL
During this year, the Company opened 69 new Bata stores, which are all
in large format with an average of over 3000 square feet. It also
renovated 40 existing Stores and closed down 73 stores which were in
small format and unviable.
All the new and renovated stores are made as per Bata global format,
using the latest retail designs and best quality furniture, which makes
our stores the most well laid out and having the best display of our
products.
Ably supported by various visually attractive POP, it makes for a more
satisfying customer experience in our stores. These new & renovated
Bata Shoe Stores continue to help in ensuring that Bata remains the
most preferred brand for consumers in the footwear retail market in
India.
Batas new collection, with its trendy and youthful designs and great
value pricing, continued to ensure that our customers found great
satisfaction and gave their patronage to our brand. While our
leadership in the dress comfort segment continued, we also increased
our share of the growing ladies and youth segment.
We also continued to expand our premium retail offering through the
chain of Hush Puppies exclusive stores and four new outlets in Delhi,
Mumbai & Chennai were opened during the year.
Our shop in shop retail format tor Hush Puppies in partnership with
Department Stores has been highly successful and we opened three such
locations during 2009.
This rapid expansion of the brand continues to give our customers
greater accessibility to our premium range of footwear under Hush
Puppies brand.
NON RETAIL
The Non Retail business has shown considerable improvement in business.
New shoe line collection launched by us resulted in serving more number
of customers.
The Company is concentrating on the top distributors and working with
them to grow our business. New distributors were also opened in
unrepresented areas to increase market penetration.
Bata Industrials & Institutional business has been steadily growing for
last 2 year & is expected to grow at a healthy rate for next couple of
years. Country wide distribution network has been established to
harness the market potential to become market leader in next 2 years.
The Company has invested in resources in the factory to meet the
stringent technical specifications of the safety footwear business and
ensure that our products are the best in the market.
EXPORT
Export sales in 2009 were Rs. 77.7 million compared to Rs. 100.8
million in 2008.
LOGISTICS
The Company has a well organized Logistics Team at Gurgaon which
controls the distribution process and ensures that footwear of the
right size is available at the right place, at the right time, to
consumers all over the country. Companys endeavour is to keep
improving its distribution process through greater use of Technology
inputs to track the rapid changes in consumer preference and shopping
practices. To support and deliver the growth projections, the company
is strengthening its Logistics infrastructure through restructuring and
consolidation of the RDC space, introduction of modern infrastructure
and new technologies, reduction in product transit lead-times, and
faster & more frequent deliveries to stores.
CAPITAL EXPENDITURE
The Capital Expenditure incurred during the year amounted to Rs. 436.1
million as against Rs.358.6 million in 2008. The increase in capital
expenditure was predominantly due to opening a number of new stores and
modernization of old stores. Capital expenditure has also been incurred
for installation of machinery, moulds and information technology.
INDUSTRIAL RELATIONS AND PERSONNEL
The Industrial Relations in the factories were peaceful and cordial
during 2009.
To create a ready talent pool in the Retail Operations the Company has
initiated Executive Development Programme consisting of 3 phases in 9
months, whereby Trainees have been recruited from prestigious Retail
Business Schools, trained and developed as District Managers. Also to
give impetus to the Retail Operations best talents available in the
market with the best academic backgrounds have been hired.
Developing & Training of internal talents continued to be the focus
area of the Company in 2009. Identified employees with potential for
growth were put on specific developmental plans. Training was conducted
for 1588 store employees and 195 store managers & K - agents to enhance
their performance and effectiveness.
Felicitation & appreciation of top performing Store Managers was done
through "Millenium Club" Recognition Programme which is a privileged
membership programme at functions held at Corporate Office and Regions.
Existing employees were encouraged by the Company to become
entrepreneurs and take the new stores as a franchisee. 80 new K-scheme
Stores have been taken up by ex-employees under this policy.
Comprehensive training on "Store Operations" for the new K -
Franchisees were imparted.
Information in terms of Section 217(2A) of the Companies Act, 1956 read
with Companies (Particulars of Employees) Rules 1975 is set out in an
Annexure to this Report.
FINANCE
The EPS (Basic and Diluted) of the Company has increased by 10.69%
(from Rs.9.45 in 2008 to Rs. 10.46 in 2009).
Bank borrowings at the year end 2009 are Rs.146.5 million against
Rs.359.1 million for the corresponding period in the year 2008, despite
the entire capital expenditure and VRS expenditure being funded through
internal accruals.
R&D ACTIVITIES AND ENERGY CONSERVATION
The Company continued local R&D activities during the year in the key
areas of product, process, material development, footwear moulds,
leather and tannery technology with emphasis on creating a
pollution-free work environment. Total expenditure incurred on R & D
was Rs. 36.2 million during the year.
The Company continues to actively pursue energy conservation measures.
SUPPORT FROM BATA GROUP
The Company has seamless access to the benefits of technical research
and innovative programs of the Bata group from Global Footwear
Services, for which it paid a fee of Rs.120 million during the calendar
year2009.
The Company continues to receive guidance and managerial support in its
various functions including store layout, marketing, shoe line, up
gradation in factory, training of managers and guidance from senior
most managers of the group.
STATUTORY AUDITORS
The Auditors of the Company Messrs. S R Batliboi & Co., Chartered
Accountants retire at the ensuing Annual General Meeting of the Company
and have given their consent for re-appointment. The Company has also
received their Certificate pursuant to Section 224(1 -B) of the
Companies Act, 1956.
DIRECTORS RESPONSE TO THE COMMENTS MADE BY THE AUDITOR IN THEIR REPORT
Auditors Report read together with Annexures referred to in Paragraph
3 of the Auditors Report do not contain any qualification of
significant nature and do not call for any explanation /clarification.
COST AUDITORS
In compliance with the Central Government Order your Board has
appointed Messrs. Mani & Co., Cost Accountants to carry out the Cost
Audit of the Company in respect of Footwear. This appointment has to be
made in each financial year and an application has been forwarded to
the Central Government to renew the appointment for the current
financial year.
DIRECTORS -
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of your Company, Mr N Sankar and Mr J Carbajal,
Directors of the Company retire by rotation at the ensuing Annual
General Meeting of the Company and offer themselves for re-election.
The Board of Directors are of the opinion that their continued
association with the Company will be beneficial to the Board and
recommends their re-election.
DIRECTORS RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217 (2AA) OF
THE COMPANIES ACT, 1956
The Directors hereby confirm :-
i) that in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;
ii) that the Directors have selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year, and of the
profit or loss of the Company for that period;
iii) that the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;
iv) that the Directors have prepared the Annual Accounts on a going
concern basis.
SUBSIDIARY COMPANIES
As required under Sec 212 of the Companies Act, 1956, the Audited
Balance Sheet and Profit & Loss Account along with the respective
Reports of the Board of Directors and the Auditors thereon of the
subsidiarycompaniesfortheyearended December 31,2009 are attached.
CORPORATEGOVERNANCE
The Company believes that Corporate Governance is a way of life than
something to be carried out under legal compulsion. The Company is
committed to the application of best management practices, compliance
with law, adherence to ethical standards and discharge of social
responsibilities. The Company has in all spheres of its activities
adequate checks and balance to ensure protection of interest of all
stakeholders. The Company also endeavours to share with its
stakeholders openly and transparently information on matters which have
a bearing on their economic and reputational interest. This calls for
a great degree of judgement and discretion so as not to put business
and commercial interest of the Company at risk.
Corporate Governance Report as well as Corporate Governance Compliance
Certificate are provided as separate Annexures to this Report.
CONCLUSION
The Directors place on record their sincere appreciation for the
cooperation and support received from investors, our dear shareholders,
customers, business associates, bankers, vendors as well as regulatory
and governmental authorities.
The Directors appreciate the invaluable contribution of the management
team in performing an outstanding job in taking the Company to greater
heights and also thank the employees for the significant contribution
made by them to the Companys progress.
We would like to specifically thank your Managing Director and Finance
Director for the untiring work in the re-organization of our company;
we also thank the nominated Directors and Bata International for their
complete support in our endeavors for re-engineering. We are very
grateful to our wise and experienced Independent Directors for their
most valuable contribution in every aspect of the company operation,
and for always targeting profitable growth and improve customer
service. Your Directors look to the future with renewed confidence and
optimism.
For and on behalf of the Board of Directors
P M Sinha
Gurgaon, February 24, 2010. Chairman
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