Notes to Accounts of Bata India Ltd.

Mar 31, 2025

Variable lease payments

Some store leases contain variable payment terms that are linked to sales generated from such stores. For some individual stores, up to 100% of lease payments are on the basis of variable payment terms with percentages generally ranging from 5% to 20% of sales. Variable payment terms are used for a variety of reasons, including minimising the fixed costs base for newly established stores. Variable lease payments that depend on sales are recognised in profit or loss in the period in which the condition that triggers those payments occurs.

A 10% increase in sales across all stores in the Company with such variable lease contracts would increase total lease payments by approximately INR 13.37 million (31st March 2024: INR 13.32 million).

Extension and termination options

Extension and termination options are included in a number of property leases of the Company. These are used to maximise operational flexibility in terms of managing the assets used in the Company''s operations. The majority of extension and termination options held are exercisable only by the Company and not by the respective lessor.

Expenses relating to short-term leases (included in other expenses) (refer note 25) and expenses relating to variable lease payments not included in lease liabilities (included in other expenses) (refer note 25) were INR 875.65 million (31st March 2024: INR 801.83 million) and INR 132.75 million (31st March 2024: INR 114.28 million) respectively.

On 1st February 2024, the Board of Directors of the Company accorded its in-principle approval for monetizing the Company''s freehold industrial land admeasuring approximately 11.54 acres situated in Faridabad, subject to necessary process / formalities being completed. The above land classified as held for sale continued to be measured at carrying amount since the fair value less costs to sell at the time of reclassification was higher. Consequently, no gain or loss had been recognised in standalone statement of profit and loss pursuant to this.

During the year ended 31st March 2025, the Board of Directors of the Company approved the sale of the freehold industrial land to an unrelated party for a consideration of INR 1,560.00 million. The sale deed had been executed and the total consideration also received on the same date. There is a gain on sale of aforesaid land (net of related expenses) of INR 1,339.52 million which has been disclosed as an exceptional item. (refer note 39).

Except for trade or other receivables due from fellow subsidiaries disclosed in Note 33, no trade or other receivable are due from directors or other officers of the Company either severally or jointly with any other person, nor from firms or private companies respectively in which any director is a partner, a director or a member. Trade receivables are non-interest bearing and are generally on terms of 15 to 120 days. For explanations on the Company''s credit risk management processes, refer to Note 35.

B. Rights, preferences and restrictions attached to equity shares

Equity shares have a par value of INR 5 per share. They entitle the holder to participate in dividends, and to share in the proceeds of winding up of the Company in proportion to the number of and amounts paid on the shares held. Every holder of equity shares present at a meeting in person or by proxy is entitled to one vote, and upon a poll, each share is entitled to one vote.

28 Employee benefit obligations a. Gratuity

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn salary per month computed proportionately as per the Payment of Gratuity Act, 1972 for 15 days salary multiplied for the number of years of service. The scheme is funded through the Company''s own trust.

The following tables summarise the components of net benefit expense recognised in the standalone statement of profit and loss and the funded status and amounts recognised in the standalone balance sheet for the gratuity plan:

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the standalone balance sheet.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

c. Provident fund

Provident fund benefits provided under plan wherein contributions are made to an irrevocable trust set up by the Company to manage the investments and distribute the amounts entitled to employees are treated as a defined benefit plan as the Company is obligated to provide the members a rate of return which should, at the minimum, meet the interest rate declared by Government administered provident fund. A part of the Company''s contribution is transferred to Government administered pension fund. The contributions made by the Company and the shortfall of interest, if any, are recognised as an expense in standalone statement of profit and loss under employee benefits expense. In accordance with an actuarial valuation of provident fund liabilities based on guidance issued by Actuarial Society of India and based on the assumptions as mentioned below, there is no deficiency in the interest cost as the present value of the expected future earnings of the fund is greater than the expected amount to be credited to the individual members based on the expected guaranteed rate of interest of Government administered provident fund.

Risk Exposures for defined benefit obligation- Gratuity

Interest Rate risk: The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability.

Liquidity Risk: This is the risk that the Company is not able to meet the short-term gratuity payouts. This may arise due to non availability of enough cash / cash equivalent to meet the liabilities or holding of illiquid assets not being sold in time.

Salary Escalation Risk: The present value of the defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan''s liability.

Demographic Risk: The Company has used certain mortality and attrition assumptions in valuation of the liability. The Company is exposed to the risk of actual experience turning out to be worse compared to the assumption.

Regulatory Risk: Gratuity benefit is paid in accordance with the requirements of the Payment of Gratuity Act, 1972 (as amended from time to time). There is a risk of change in regulations requiring higher gratuity payouts (e.g. Increase in the maximum limit on gratuity).

Asset Liability Mismatching or Market Risk: The duration of the liability is longer compared to duration of assets, exposing the Company to market risk for volatilities/fall in interest rate.

Investment Risk: The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

The category wise brief description of major contingent liabilities has been given below:

Excise, customs and service tax: The claim for excise duty pertain to demand in respect of concessional duty on sale of goods in domestic tariff area. The customs demand pertain to non-availability of concessional duty in respect of import of moulds and the service tax demand relate to restriction on availment of credit on certain input services.

Sales tax and entry tax: The claim pertains to levy of interest on delay in payment of taxes.

Employee state insurance: The claim pertains to demand by the department for payment of contributions for the period during which the Company had applied for exemption before the concerned authority.

Note:

(a) It is not practicable for the Company to estimate the timing of cash outflow, if any, in respect of the above pending resolution of the respective proceedings.

(b) The Company does not expect any reimbursements in respect of the above contingent liabilities.

B Commitments

Estimated amount of contracts remaining to be executed for capital expenditure and not provided for amounting to INR 361.51 million (31st March 2024 INR 270.89 million).

30 Fair value measurements

The carrying amount of financial assets and liabilities are considered to be same as their fair values.

31 Capital Management

The Company''s objective when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize shareholder value. In order to maintain or achieve an optimal capital structure, the Company may adjust the amount of dividend payment, return capital to shareholders, issue new shares or buy back issued shares. As at 31st March 2025, the Company has only one class of equity shares and has no borrowings from banks or financial institutions. Consequent to the above capital structure, there are no externally imposed capital requirements

The Company is having borrowings amounting to Nil (31st March 2024 Nil).

The Company has agreed to ensure appropriate financial support only if and to the extent required by its subsidiary -Way Finders Brands Limited.

Terms and Conditions:

Transactions relating to dividends were on the same terms and conditions that applied to other shareholders.

The loan to subsidiary is repayable on demand at interest rates of 8% per annum (31st March 2024- 8% per annum).

Goods were sold to related parties during the year based on the price lists in force and terms that would be available to third parties. Management services were rendered to the group companies on a cost-plus basis, allowing a margin ranging from 8% to 15% (31st March 2024 - 8% to 15%). All other transactions were made on normal commercial terms and conditions and at market rates.

All outstanding balances are unsecured and receivable / payable in cash.

35 Financial risk management objectives and policies

The Company''s principal financial liabilities comprise trade and other payables and lease liabilities. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include loans, security deposits, bank deposits, trade and other receivables, and cash and cash equivalents that it derives directly from its operations.

The Company''s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company''s focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.

The Company''s risk management is predominantly controlled by a central treasury department under policies approved by the Board of Directors. Central treasury identifies, evaluates and hedges financial risks in close cooperation with the Company''s operating units. The Board provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

A) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. The primary market risk to the Company is foreign exchange risk. Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities (when revenue or expense is denominated in a foreign currency) primarily with respect to USD and EURO.

The Company manages foreign currency risk by hedging its transactions using foreign currency forward contracts. The foreign exchange forward contracts are not designated as cash flow hedges, and are entered into for periods consistent with foreign currency exposure of the underlying transactions. The Company''s exposure to unhedged foreign currency risk as at 31st March 2025 and 31st March 2024 has been disclosed as below :

B) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables and deposits to landlords) and from its investing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.

a) Trade receivables

Sales to retail customers are required to be settled in cash or using major credit cards, mitigating credit risk. There are no significant concentrations of credit risk, whether through exposure to individual customers, specific industry sectors and/or regions. For non-retail customers, the Company assesses the credit quality of the customer, taking into account its financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings by the management. The compliance with credit limits by customers is regularly monitored by line management.

To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due. The calculation is based on historical data. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The credit risk to the Company is limited in cases of retail sales since they are in nature of cash and carry and for non-retail sales, the Company''s exposure to customers is diversified and there is no concentration of credit risk with respect to any particular customer.

b) Loans and other financial assets

With regards to all the financial assets with contractual cashflows other than trade receivables, management believes these to be high quality assets with negligible credit risk. The management believes that the parties from which these financial assets are recoverable, have strong capacity to meet the obligations and where the risk of default is negligible. The maximum exposure to credit risk at the reporting date in each class of financial assets is disclosed in note 5, 10 and 11.

C) Liquidity risk

The Company''s principal source of liquidity is cash and cash equivalents and the cash flow that is generated from operations. The Company has no outstanding bank borrowings. The Company believes that the working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived.

As at 31st March 2025, the Company had a working capital of INR 7,720.21 million (31st March 2024: 8,100.31 million) including cash and cash equivalents of INR 2,001.22 million (31st March 2024: 490.77 million).

36 Segment Reporting

Segment information is presented in respect of the Company''s key operating segments. The operating segments are based on the company''s management and internal reporting structure.

Operating Segments

(a) The Company''s Managing Director & CEO has been identified as the Chief Operating Decision Maker (''CODM'') and he is responsible for all major decision with respect to the preparation and execution of business plan, preparation of budget and other key decisions.

The Managing Director & CEO reviews the operating results at the company level to make decisions about the Company''s performance. Accordingly, management has identified the business as single operating segment i.e. Footwear & Accessories. Accordingly, there is only one reportable segment for the Company which is "Footwear and Accessoriesâ, hence no specific disclosures have been made.

(b) The non-current assets of the Company are located in the country of domicile i.e. India. Hence no specific disclosures have been made.

38 Additional regulatory information required by Schedule III to the Act:

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the company for holding any benami property.

(ii) The Company has not been declared as willful defaulter by any bank or financial Institution or government or any government authority.

(iii) The Company has complied with the number of layers prescribed under the Act.

(iv) The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

(v) The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries), with the understanding (whether recorded in writing or otherwise) that the Intermediary shall:

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

(vi) The Company has not received any funds from any person(s) or entity(ies), including foreign entities (Funding Parties), with the understanding, whether recorded in writing or otherwise, that the Company shall:

a) directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiariesâ) by or on behalf of the Funding Party or

b) provide any guarantee, security or the like from or on behalf of the ultimate beneficiaries.

(vii) There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of accounts.

(viii) The Company has not traded or invested crypto currency or virtual currency during the current or previous year.

(ix) The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.

(x) There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period except for below-

The Company had entered into a Development Agreement with Riverbank Developers Pvt. Ltd. (RDPL) in 2010 pursuant to which certain land was contributed by the Company for the development of housing apartments. RDPL obtained a loan of Rs. 3,000 million against the land from Housing Development Finance Corporation Limited ("HDFC Limitedâ). A charge of INR 3,000 million was created in favour of HDFC, under the said agreement and the same is still appearing in the records of ROC, West Bengal. The said charge is not yet satisfied due to the non receipt of the appropriate documents from HDFC Limited/RDPL.

(xi) The Company has not been sanctioned any working capital limits from its banks or financial institutions on the basis of security of current assets.

(xii) Title deeds of immovable properties not held in the name of the Company:

39 Exceptional items

Exceptional items are those which are considered for separate disclosure in the financial statements considering their size, nature or incidence.

During the year ended 31st March 2024, a scheme for voluntary retirement (VRS) was introduced by the Company at one manufacturing unit and INR 409.00 million was incurred for the same and was disclosed as an exceptional item. Further, during the year ended 31st March 2025, another scheme for voluntary retirement was introduced at another manufacturing unit and INR 107.84 million was incurred for the same and is disclosed as an exceptional item.

During the year ended 31st March 2025, the Board of Directors of the Company approved the sale of the freehold industrial land to an unrelated party for a consideration of INR 1,560.00 million. The sale deed has been executed and the total consideration also received on the same date. There is a gain on sale of aforesaid land (net of related expenses) of INR 1,339.52 million which has been disclosed as an exceptional item.

40 Acquisition of license rights

During the year ended 31st March 2024, the Company had entered into a license agreement with Authentic Brands Group LLC and obtained exclusive rights to manufacture, market and distribute Nine West footwear and accessories across India. As part of the license agreement, the Company is required to pay royalty for the above rights including a minimum contractual royalty payable over the life of the agreement. The Company had recognised "License Rightsâ under intangible assets at the present value of the minimum royalty payable amounting to INR 151.70 million with a corresponding financial liability at the date of inception of the agreement. The said asset will be amortised over the term of agreement.

During the year ended 31st March 2025 the Company has renewed another license agreement with Wolverine World Wide, Inc. and has obtained exclusive rights to manufacture, sale, purchase, market and distribute Hush Puppies footwear, apparel and accessories across India. As part of the license agreement, the Company is required to pay royalty for the above rights including a minimum contractual royalty payable over the life of the agreement. The Company has recognised "License Rightsâ under intangible assets at the present value of the minimum royalty payable amounting to INR 2,577.95 million with a corresponding financial liability at the date of inception of the agreement. The said asset will be amortised over the term of agreement.

Reason for variance of more than 25%

Increase in net profit ratio (%) is due to exceptional item (gain on sale of land) during the year.

* Profit for the year Depreciation and amortisation expense Finance costs Allowance for doubtful debts and other financial assets Allowance for loan and other financial assets in subsidiary (net of reversals) Loss on sale/ disposal of property, plant and equipment (net)

** Total equity Non current lease liabilities

"''"Average of opening and closing other balances with banks, Deposits with original maturity of less than 3 months and Deposits having remaining maturity of more than 12 months.

#Current assets- Current liabilities

## Cost of raw materials and components consumed Purchases of stock-in-trade Changes in inventories of finished goods, stock-in-trade and work in progress

###Profit before tax Exceptional items Net finance charges.

Mar 31, 2024

Variable lease payments

Some store leases contain variable payment terms that are linked to sales generated from such stores. For some individual stores, up to 100% of lease payments are on the basis of variable payment terms with percentages ranging from 5% to 20% of sales. Variable payment terms are used for a variety of reasons, including minimising the fixed costs base for newly established stores. Variable lease payments that depend on sales are recognised in profit or loss in the period in which the condition that triggers those payments occurs.

A 10% increase in sales across all stores in the Company with such variable lease contracts would increase total lease payments by approximately INR 13.32 (31st March 2023: INR 19.60).

Extension and termination options

Expenses relating to short-term leases (included in other expenses) (refer note 25) and expenses relating to variable lease payments not included in lease liabilities (included in other expenses) (refer note 25) were INR 801.83 (31st March 2023: INR 664.72) and INR 114.28 (31st March 2023- INR 180.95) respectively.

On 1st February 2024, the Board of Directors of the Company accorded its inprinciple approval for monetizing the Company''s freehold industrial land admeasuring approximately 11.54 acres situated in Faridabad, subject to necessary process / formalities being completed. The above land classified as held for sale during the reporting period continues to be measured at carrying amount since the fair value less costs to sell at the time of reclassification is higher. Consequently, no gain or loss has been recognised in standalone statement of profit and loss pursuant to this.

Subsequent to the year ended 31st March 2024, the Board of Directors of the Company on 26th April 2024, has approved the sale of the freehold industrial land to an unrelated party for a consideration of INR 1,560.00 million (subject to applicable duties, taxes and transaction charges) subject to necessary process/formalities being completed. The sale deed has been executed and the total consideration has been received on the same date. The aforesaid land has been classified as assets held for sale in the standalone balance sheet.

Except for trade or other receivables due from fellow subsidiaries disclosed in Note 33, no trade or other receivable are due from directors or other officers of the Company either severally or jointly with any other person, nor from firms or private companies respectively in which any director is a partner, a director or a member. Trade receivables are non-interest bearing and are generally on terms of 30 to 120 days. For explanations on the Company''s credit risk management processes, refer to Note 35.

B. Rights, preferences and restrictions attached to equity shares

28 Employee benefit obligations a. Gratuity

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The scheme is funded through the Company''s own trust.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

c. Provident fund

Provident fund benefits provided under plans wherein contributions are made to an irrevocable trust set up by the Company to manage the investments and distribute the amounts entitled to employees are treated as a defined benefit plan as the Company is obligated to provide the members a rate of return which should, at the minimum, meet the interest rate declared by Government administered provident fund. A part of the Company''s contribution is transferred to Government administered pension fund. The contributions made by the Company and the shortfall of interest, if any, are recognised as an expense in standalone statement of profit and loss under employee benefits expense. In accordance with an actuarial valuation of provident fund liabilities based on guidance issued by Actuarial Society of India and based on the assumptions as mentioned below, there is no deficiency in the interest cost as the present value of the expected future earnings of the fund is greater than the expected amount to be credited to the individual members based on the expected guaranteed rate of interest of Government administered provident fund.

Risk Exposures for defined benefit obligation- Gratuity

Asset Liability Mismatching or Market Risk: The duration of the liabilty is longer compared to duration of assets, exposing the Company to market risk for volatilities/fall in interest rate.

Investment Risk: The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

29 Contingent liabilities and commitments A Contingent liabilities Claims against the Company not acknowledged as debt include:
Nature	As at 31 March 2024	As at 31 March 2023
Excise, customs and service tax cases	65.74	65.73
Sales tax and entry tax cases	6.64	7.03
Employee state insurance and provident fund cases	19.00	19.51
Others*	221.94	298.29
Total	313.32	390.56
*Includes cases pertaining to rent, labour, wages, etc.

Note:

(a) It is not practicable for the Company to estimate the timing of cash outflow, if any, in respect of the above pending resolution of the respective proceedings.

(b) The Company does not expect any reimbursements in respect of the above contingent liabilities.

B Commitments

Estimated amount of contracts remaining to be executed for capital expenditure and not provided for amounting to INR 270.89 (31st March 2023 INR 506.98).

30 Fair value measurements

The carrying amount of financial assets and liabilities are considered to be same as their fair values.

31 Capital Management

The Company''s objective when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize shareholder value. In order to maintain or achieve an optimal capital structure, the Company may adjust the amount of dividend payment, return capital to shareholders, issue new shares or buy back issued shares. As at 31st March 2024, the Company has only one class of equity shares and has no debt. Consequent to the above capital structure, there are no externally imposed capital requirements

The Company is having borrowings amounting to Nil (31st March 2023 Nil).

Terms and Conditions:

Transactions relating to dividends were on the same terms and conditions that applied to other shareholders.

The loan to subsidiary is repayable on demand at interest rates of 8% per annum (31st March 2023- 8% per annum).

Goods were sold to related parties during the year based on the price lists in force and terms that would be available to third parties. Management services were received from the group companies on a cost-plus basis, allowing a margin ranging from 8% to 15% (31st March 2023 - 8% to 15%). All other transactions were made on normal commercial terms and conditions and at market rates.

All outstanding balances are unsecured and receivable / payable in cash.

35 Financial risk management objectives and policies

The Company''s principal financial liabilities comprise trade and other payables and lease liabilities. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include loans, security deposits, trade and other receivables, and cash and cash equivalents that it derives directly from its operations.

A) Market risk

a) Trade receivables

The compliance with credit limits by customers is regularly monitored by line managementTo measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due. The calculation is based on historical data. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The credit risk to the Company is limited in cases of retail sales since they are in nature of cash and carry and for non-retail sales, the Company''s exposure to customers is diversified and there is no concentration of credit risk with respect to any particular customer.

b) Loans and other financial assets

As at 31st March 2024, the Company had a working capital of INR 8,100.31 including cash and cash equivalents of INR 490.77. As at 31st March 2023, the Company had a working capital of INR 7,833.00 including cash and cash equivalents of INR 745.47.

36 Segment Reporting

(a) Segment information is presented in respect of the Company''s key operating segments. The operating segments are based on the company''s management and internal reporting structure.

Operating Segments

The company''s Managing Director and CEO has been identified as the Chief Operating Decision Maker (''CODM'') and is responsible for all major decision with respect to the preparation and execution of business plan, preparation of budget and other key decisions.

The Managing Director and CEO reviews the operating results at the company level to make decisions about the company''s performance. Accordingly, management has identified the business as single operating segment i.e. Footwear & Accessories. Accordingly, there is only one reportable Segment for the company which is "Footwear and Accessoriesâ, hence no specific disclosures have been made.

(b) The non-current assets of the Company are located in the country of domicile i.e. India. Hence no specific disclosures have been made.

38 Additional regulatory information required by Schedule III to the Act:

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the company for holding any benami property.

(ii) The Company has not been declared as wilful defaulter by any bank or financial Institution or government or any government authority.

(iii) The Company has complied with the number of layers prescribed under the Act.

(iv) The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company(Ultimate Beneficiaries) or

b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

a) directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiariesâ) by or on behalf of the Funding Party or

b) provide any guarantee, security or the like from or on behalf of the ultimate beneficiaries.

viii) The Company has not traded or invested crypto currency or virtual currency during the current or previous year.

(ix) The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.

(x) There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period except for below-

The Company had entered into a Development Agreement with Riverbank Developers Pvt. Ltd. (RDPL) in 2010 pursuant to which certain land was contributed by the Company for the development of housing apartments. RDPL obtained a loan of Rs. 3,000 million against the land from Housing Development Finance Corporation Limited ("HDFC Limitedâ). A charge of Rs. 3,000 million was created in favour of HDFC, under the said Agreement and the same is still appearing in the records of ROC, West Bengal. The said charge is not yet satisfied due to the non receipt of the appropriate documents from HDFC Limited/RDPL.

(xi) The Company has been sanctioned working capital limits from its banks on the basis of security of current assets. However, the Company has obtained waiver for filing of quarterly statements or return in respect of such working capital limits.

(xii) Title deeds of immovable properties not held in the name of the Company:

39 Exceptional item

Exceptional items are those which are considered for separate disclosure in the financial statements considering their size, nature or incidence.

During the year, a scheme for voluntary retirement (VRS) was introduced at one manufacturing unit and INR 409.00 (31st March 2023: Nil) was offered for the same and is disclosed as an exceptional item.

40 Acquisition of license rights

During the year ended 31st March 2024, the Company has entered into a license agreement with Authentic Brands Group LLC and has obtained exclusive rights to manufacture, market and distribute Nine West footwear and accessories across India. As part of the license agreement, the Company is required to pay royalty for the above rights including a minimum contractual royalty payable over the life of the agreement. The Company has recognised

Reason for variance of more than 25%

Increase in return on investment (%) is due to increase in Interest income from financial assets at amortised cost and decrease in Average invested treasury funds.

* Net profit after taxes Non cash operating expenses Interest other adjustment like loss on sale of property, plant and equipments etc.

** Total equity non current lease liabilities

"''"Average of opening and closing other balances with banks,Deposits with original maturity of less than 3 months and Deposits having remaining maturity of more than 12 months.

#Current assets- Current liabilities

## Cost of raw materials and components consumed Purchases of stock-in-trade Changes in inventories of finished goods, stock-in-trade and work in progress

###Operating profit before interest and tax: Profit before tax Exceptional item Net finance charges

Mar 31, 2023

Variable lease payments

Some property leases contain variable payment terms that are linked to sales generated from a store. For some individual stores, up to 100% of lease payments are on the basis of variable payment terms with percentages ranging from 5% to 20% of sales. Variable payment terms are used for a variety of reasons, including minimising the fixed costs base for newly established stores. Variable lease payments that depend on sales are recognised in profit or loss in the period in which the condition that triggers those payments occurs.

A 10% increase in sales across all stores in the Company with such variable lease contracts would increase total lease payments by approximately INR 19.60 million (31 March 2022: INR 17.45 million).

Extension and termination options

Extension and termination options are included in a number of property and equipment leases across the Company. These are used to maximise operational flexibility in terms of managing the assets used in the Company''s operations. The majority of extension and termination options held are exercisable only by the Company and not by the respective lessor.

Expenses relating to short-term leases (included in other expenses) and expenses relating to variable lease payments not included in lease liabilities (included in other expenses) were INR 664.72 million (31 March 2022- INR 771.91 million) and INR 180.95 million (31 March 2022- INR 156.30 million) respectively, before adjusting rent concession of NIL (31 March 2022- INR 585.48 million).

The Company has complied with MCA Notifications dated 24 July 2020 and 18 June 2021 on Ind AS 116, Leases for rent concessions which were granted due to COVID-19 pandemic. According to the notifications, out of total rent concessions confirmed for the year ended 31 March 2023 and for year ended 31 March 2022, NIL and INR 585.48 million respectively have been accounted as a reduction from rent expense.

# Further as per MCA notification dated 18 June 2021 on Ind AS 116, Leases which extended the period of applying practical expedient on rent concessions due to COVID-19 pandemic to 30 June 2022, the Company has provided the cumulative effect of initially applying that amendment as an adjustment to the opening balance of retained earnings of INR 54.14 million (net of deferred tax of INR 18.21 million) during the year ended 31 March 2022.

28. Employee benefit obligations a) Gratuity:

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of year of service. The scheme is funded through the Company''s own trust.

c) Provident fund:

Risk Exposures

Asset Liability Mismatching or Market Risk: The duration of the liabilty is longer compared to duration of assets, exposing the Company to market risk for volatilities/fall in interest rate.

Investment Risk: The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

29. Contingent liabilities and commitments

A. Contingent liabilities a) Claims against the Company not acknowledged as debt includes:
Nature	As at 31 March 2023	As at 31 March 2022
Excise, customs and service tax cases	65.73	116.60
Sales tax and entry tax cases	7.03	389.50
Employee state insurance and provident fund cases	19.51	19.51
Others*	298.29	302.76
Total	390.56	828.37
*Includes cases pertaining to rent, labour, wages, etc.

Note:

(a) It is not practicable for the Company to estimate the timing of cash outflow, if any, in respect of the above pending resolution of the respective proceedings.

(b) The Company does not expect any reimbursements in respect of the above contingent liabilities.

B. Commitments

Estimated amount of contracts remaining to be executed for capital expenditure and not provided for amounted to INR 506.98 million (31 March 2022 INR 60.05 million).

30. Fair value measurements

The carrying amount of financial assets and liabilities are considered to be same as their fair values.

31. Capital Management

The Company''s objective when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize shareholder value. In order to maintain or achieve an optimal capital structure, the Company may adjust the amount of dividend payment, return capital to shareholders, issue new shares or buy back issued shares. As at 31 March 2023, the Company has only one class of equity shares and has no debt. Consequent to the above capital structure, there are no externally imposed capital requirements

The Company is having NIL borrowings as at 31 March 2023 (31 March 2022 NIL).

Terms and Conditions:

Transactions relating to dividends were on the same terms and conditions that applied to other shareholders.

The loans to subsidiary is repayable on demand at interest rates of 8% per annum.

Goods were sold to related parties during the year based on the price lists in force and terms that would be available to third parties. Management services were received from the immediate parent entity on a cost-plus basis, allowing a margin ranging from 8% to 15% (31 March 2022 - 5% to 15%). All other transactions were made on normal commercial terms and conditions and at market rates.

All outstanding balances are unsecured and receivable / payable in cash.

35. Financial risk management objectives and policies

The Company''s principal financial liabilities comprise trade and other payables and lease liabilities. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations.

The Company''s risk management is predominantly controlled by a central treasury department under policies approved by the Board of Directors. Central treasury identifies, evaluates and hedges financial risks in close co-operation with the Company''s operating units. The Board provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

A) Market risk

B) Credit risk

a) Trade receivables

The compliance with credit limits by customers is regularly monitored by line management.

b) Loans and other financial assets

C) Liquidity risk

37. Segment Reporting

Segment information is presented in respect of the Company''s key operating segments. The operating segments are based on the company''s management and internal reporting structure.

Operating Segments

(a) The company''s Managing Director and CEO has been identified as the Chief Operating Decision Maker (''CODM'') and is responsible for all major decision w.r.t. the preparation and execution of business plan, preparation of budget and other key decisions.

(b) The non-current assets of the Company are located in the country of domicile i.e. India. Hence no specific disclosures have been made.

39. Additional regulatory information required by Schedule III to the Act:

i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the company for holding any benami property.

(ii) The Company has not been declared as wilful defaulter by any bank or financial Institution or government or any government authority.

(iii) The Company has complied with the number of layers prescribed under the Act.

(iv) The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

(v) The Conpany has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries), with the understanding (whether recorded in writing or otherwise) that the Intermediary shall:

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company(Ultimate Beneficiaries) or

b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

a) directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiariesâ) by or on behalf of the Funding Party or

b) provide any guarantee, security or the like from or on behalf of the ultimate beneficiaries.

(viii) The Company has not traded or invested crypto currency or virtual currency during the current or previous year.

(ix) The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.

(x) There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.

(xii) Title deeds of immovable properties not held in the name of the Company:

Mar 31, 2022

The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due.

Total rental expenses and variable payments were recorded for INR 771.91 million (31 March 2021- INR 650.37 million) and INR 156.30 million (31 March 2021- INR 62.50 million) respectively, before adjusting rent concession of INR 585.46 million (31 March 2021- INR 709.87 million). For rent concession, refer below:

# The Company has elected to apply the practical expedient of not assessing the rent concessions as a lease modification, as per MCA notification dated July 24, 2020 and June 18, 2021, on IND-AS 116 for rent concessions which are granted due to COVID-19 pandemic. According to the notification, out of total rent concessions confirmed for the year ended March 31, 2022 and for year ended March 31, 2021, INR 585.48 million and INR 1,010.29 million respectively has been accounted as a reduction from rent expense to the extent available and balance of NIL and INR 300.42 million for the year ended March 31,2022 and year ended March 31, 2021, respectively, has been accounted as "Other incomeâ.

Further as per MCA notification dated June 18, 2021, on IND-AS 116, extending the period of applying practical expedient on rent concessions due to COVID-19 pandemic to June 30, 2022, the company has provided the cumulative effect of initially applying that amendment as an adjustment to the opening balance of retained earnings of iNr 54.14 million (net of deferred tax asset of INR 18.21 million).

â¢Includes Rs. 83.76 million for a demand raised by Directorate of Revenue Intelligence, Custom Kolkata for availment of benefit of customs exemption notification on import of Moulds in the year 1998 -99. The Company filed an appeal before Appellate authority, who has set aside the matter and referred back to Commissioner of Custom for adjudication. Balance include individually small cases pertaining to rent, labour, wages etc.

On the basis of current status of individual cases and as per legal advice obtained by the Company wherever applicable, the Company is confident that no provision is required in respect of these cases at this point in time.

B. Commitments

Estimated amount of contracts remaining to be executed for capital expenditure and not provided for amounted to INR 60.05 million (31 March 2021 INR 135.48 million).

C. Leases

a) The Company has taken various residential, office, warehouse and shop premises under lease agreements.

b) The aggregate lease rentals payable are disclosed in Note 4d and 25. For future minimum rentals payable under non-cancellable leases refer note 4d

31. Financial instruments fair values classification

Set out below, is a comparison by class of the carrying amounts and fair value of the Company''s financial instruments.

Note

a) The management has not disclosed the fair values for financial instruments because their carrying values approximate their fair value largely due to the short-term maturities of these instruments.

b) Fair valuation of non-current financial instruments has been disclosed to be same as carrying value as there is no significant difference between carrying value and fair value as the carrying value is based on effective interest rates.

32. Capital Management

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximise the shareholder value. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, less cash and cash equivalents.

The Company is having nil borrowings as on 31 March 2022 (31 March 2021 INR Nil). Hence gearing ratio is not disclosed.

33. Derivative instruments and Unhedged foreign currency exposure

Derivative Instruments and Unhedged Foreign Currency Exposure, which are not intended for trading or speculation purpose.

34. Details of corporate social responsibility expenditure

As per Section 135 of Companies Act, 2013, a Company needs to spend at least 2% of its average net profit for the immediately preceding three financial years on Corporate Social Responsibility (CSR) activities. A CSR Committee has been formed by the Company as per Act. The CSR Committee and Board had approved the projects with specific outlay on the activities as specified in Schedule VII of the Act, in pursuant of the CSR policy.

37. Financial risk management objectives and policies

The Company''s principal financial liabilities comprise trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations.

A) Market risk

The Company uses forward contracts to mitigate foreign exchange related risk exposures. When a forward contract is entered into for the purpose of being a hedge, the Company negotiates the terms of those contracts to match the terms of the hedged exposure. The Company''s exposure to unhedged foreign currency risk as at 31 March, 2022 and 31 March, 2021 has been disclosed in note 33.

For the year ended 31 March 2022, every 5 percentage point depreciation/appreciation in the exchange rate between the Indian rupee and U.S. dollar, would have affected the Company''s profit/(loss) before tax by (9.48) million/ 9.48 million respectively and Pre tax equity by (9.48) million/ 9.48 million respectively.

For the year ended 31 March 2021, every 5 percentage point depreciation/appreciation in the exchange rate between the Indian rupee and U.S. dollar, would have affected the Company''s profit/ (loss) before tax by 5.01 million/ (5.01) million respectively and Pre tax equity by (5.01) million/ 5.01 million respectively.

B) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables and deposits to landlords) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments. The Company generally doesn''t have collateral.

a) Trade receivables

Customer and vendor credit risk is managed by business through the Company''s established policy, procedures and control relating to credit risk management. Credit quality of each customer is assessed and credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored.

An impairment analysis is performed for all major customers at each reporting date on an individual basis. In addition, a large number of minor receivables are grouped into homogenous group and assessed for impairment collectively. The calculation is based on historical data. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in note 9. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several industries and operate in largely independent markets.

b) Loans and other financial assets

C) Liquidity risk

As of 31 March 2022, the Company had a working capital of INR 11788.50 million including cash and cash equivalents of INR 177.29 million. As of 31 March 2021, the Company had a working capital of INR 11,445.65 million including cash and cash equivalents of INR 544.33 million.

D) Commodity price risk

The Company is exposed to the risk of price fluctuation of raw material as well as finished goods. The Company manages its commodity price risk by maintaining adequate inventory of raw materials and finished goods considering future price movement. To counter raw material risk, the Company works with variety of leather, PVC and rubber with the objective to moderate raw material cost, enhance application flexibility and increased product functionality and also invests in product development and innovation. To counter finished goods risk, the Company deals with wide range of vendors and manages these risks through inventory management and proactive vendor development practices.

Inventory sensitivity analysis (raw material, work-in-progress and finished goods)

A reasonably possible change of 5% in prices of inventory at the reporting date, would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables remain constant.

40. Segment Reporting

Segment information is presented in respect of the Company''s key operating segments. The operating segments are based on the Company''s management and internal reporting structure.

Operating Segments

The Company''s Managing Director and CEO have been identified as the Chief Operating Decision Maker (''CODM''), since they are responsible for all major decision w.r.t. the preparation and execution of business plan, preparation of budget and other key decisions.

The Managing Director and CEO review the operating results at the Company level to make decisions about the Company''s performance. Accordingly, management has identified the business as single operating segment i.e. Footwear & Accessories. Accordingly, there is only one Reportable Segment for the Company which is "Footwear and Accessories", hence no specific disclosures have been made.

42. Additional regulatory information:

(i) No proceeding has been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

(ii) The Company has not been declared as wilful defaulter by any bank or financial Institution or other lender.

(iii) There are no transaction which has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

(iv) There are no charges or satisfaction yet to be registered with ROC beyond the statutory period.

(v) There are no funds which have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall:

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Company or

b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(vi) There are no funds which have been received by the Company from any persons or entities, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall:

a) directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Funding Party or

b) provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries.

(vii) The Company has complied with the layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017, the names and CIN of the companies beyond the specified layers and the relationship or extent of the company in such downstream companies shall be disclosed.

44. The current and previous financial year have been challenging for the business. The year began with a much stronger second wave of COVID-19 infections and has once again resulted in significant disruption to the business as several state governments have announced partial/ complete restrictions. However, the recovery post second wave of COVID-19 was at a higher pace as compared to last year. Accordingly, the Company has made detailed assessment of the recoverability and carrying values of its assets comprising property, plant and equipment, investments, inventories, receivables, other current assets, deferred tax assets, etc. as at the year end and on the basis of evaluation, has concluded that no material adjustments are required in the financial statements except impairment of investment and loan to subsidiary. Given the uncertainties associated with nature, condition and duration of COVID-19, the impact assessment on the Company''s financial statements will be continuously made and provided for as required.

45. Previous period figures have been re-grouped / re-classified wherever necessary, to conform to current period''s classification in order to comply with the requirements of the amended Schedule III to the Companies Act, 2013 effective 1^st April 2021.

Mar 31, 2021

32. Capital Management

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, less cash and cash equivalents.

The Company is having nil borrowings as on 31 March 2021 (31 March 2020 INR Nil). Hence gearing ratio is not disclosed.

33. Derivative instruments and Unhedged foreign currency exposure

Derivative Instruments and Unhedged Foreign Currency Exposure, which are not intended for trading or speculation purpose.

37. Financial risk management objectives and policies

A) Market risk

The Company uses forward contracts to mitigate foreign exchange related risk exposures. When a forward contract is entered into for the purpose of being a hedge, the Company negotiates the terms of those contracts to match the terms of the hedged exposure. The Company''s exposure to unhedged foreign currency risk as at 31 March, 2021 and 31 March, 2020 has been disclosed in note 33.

For the year ended 31 March 2021, every 5 percentage point depreciation/appreciation in the exchange rate between the Indian rupee and U.S. dollar, would have affected the Company''s profit before tax by (5.01) million/ 5.01 million respectively and Pre tax equity by (5.01) million/ 5.01 million respectively.

For the year ended 31 March 2020, every 5 percentage point depreciation/appreciation in the exchange rate between the Indian rupee and U.S. dollar, would have affected the Company''s profit before tax by (12.55) million/ 12.55 million respectively and Pre tax equity by (12.55) million/ 12.55 million respectively.

B) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables and deposits to landlords) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments. The Company generally doesn''t have collateral.

a) Trade receivables

b) Loans and other financial assets

C) Liquidity risk

As of 31 March 2021, the Company had a working capital of INR 11,445.65 Million including cash and cash equivalents of INR 544.33 Million . As of 31 March 2020, the Company had a working capital of INR 11,990.91 Million including cash and cash equivalents of INR 150.14 Million .

D) Commodity price risk

Inventory sensitivity analysis (raw material, work in progress and finished goods)

39. Segment Reporting

Segment information is presented in respect of the company''s key operating segments. The operating segments are based on the company''s management and internal reporting structure.

Operating Segments

The Managing Director and CEO review the operating results at the Company level to make decisions about the Company''s performance. Accordingly, management has identified the business as single operating segment i.e. Footwear & Accessories. Accordingly, there is only one Reportable Segment for the Company which is âFootwear and Accessoriesâ, hence no specific disclosures have been made.

b) The non-current assets of the Company are located in the country of domicile i.e. India. Hence no specific disclosures have been made.

c) There are no major customer having revenue greater than 10% of the Company

40. The current financial year has been a challenging year for our business. The year began amidst a strict lockdown post the emergence of the Coronavirus (COVID-19) towards the end of the last financial year. The economy gradually opened post June 2020 and the second half of the year was progressing towards recovery. However, a much stronger second wave of Covid-19 infections hit the country towards the end of year and has once again resulted in significant disruption to our business as several state governments have announced partial/ complete restrictions. As a result, the Company has made detailed assessment of the recoverability and carrying values of its assets comprising property, plant and equipment, inventories, receivables, other current assets, deferred tax assets, etc. as at the period end and on the basis of evaluation, has concluded that no material adjustments are required in the financial results. Given the uncertainties associated with nature, condition and duration of COVID-19, the impact assessment on the Company''s financial statements will be continuously made and provided for as required.

41. Note 22 includes R&D expenses of INR 47.96 million (31 March 2020 INR 54.69 million) and Note 25 includes R&D expenses of INR 8.99 million (31 March 2020 INR 13.56 million).

42. The disclosure regarding details of specified bank notes held and transaction during 8 November 2016 to 30 December 2016 have not been made since the requirement does not pertain to financial year ended 31 March 2021.

Mar 31, 2019

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019

(Amount in INR million)

28. Earnings per share (EPS)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the parent by the weighted average number of equity shares outstanding during the year.

Diluted EPS are calculated by dividing the profit for the year attributable to the equity holders of the parent by weighted average number of Equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.

The following reflects the income and share data used in the basic EPS and diluted EPS computations:

	For the year ended 31 March 2019	For the year ended 31 March 2018
Profit attributable to equity holders	3,289.94	2,205.13
	3,289.94	2,205.13

	No. of shares	No. of shares
Weighted average number of equity shares in calculating basic EPS and diluted EPS	128,527,540	128,527,540
Earnings per equity share in INR
Computed on the basis of profit for the year
Basic (INR)	25.60	17.16
Diluted (INR)	25.60	17.16

29. Note 22 includes research and development expenses of INR 56.14 million (31 March 2018 INR 46.99 million) and Note 25 includes research and development expenses of INR 9.18 million (31 March 2018 INR 10.75 million).

30. Employee benefit plans

a) Gratuity and other post-employment benefit plans:

The Parent Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at the rate of 15 days salary (last drawn salary) for each completed year of service. The scheme is funded through the parent Company''s own trust.

The Parent Company has also provided long term compensated absences which are unfunded.

The following tables summarise the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the gratuity plan:

Reconciliation of fair value of plan assets and defined benefit obligation:

	As at 31 March 2019	As at 31 March 2018
Fair value of plan assets	664.00	664.62
Defined benefit obligation	738.35	697.32
Net defined benefit (liability)	(74.35)	(32.70)

Amount recognised in Statement of Profit and Loss:

	For the year ended 31 March 2019	For the year ended 31 March 2018
Current service cost	41.33	33.43
Net interest expense	2.42	(8.32)
Amount recognised in Statement of Profit and Loss	43.75	25.11

Amount recognised in Other Comprehensive Income:

	For the year ended 31 March 2019	For the year ended 31 March 2018
Actuarial changes arising from changes in financial assumptions	11.93	187.73
Return on plan assets (greater/less than the discount rate)	(3.31)	23.14
Experience adjustments	(10.73)	33.86
Amount recognised in Other Comprehensive Income	(2.11)	244.73

Changes in the present value of the defined benefit obligation are as follows:

	As at 31 March 2019	As at 31 March 2018
Defined benefit obligation at the beginning of the year	697.32	456.38
Current service cost	41.33	33.43
Interest expense	49.71	30.81
Benefits paid	(51.21)	(44.89)
Actuarial (gain)/ loss on obligations - OCI	1.20	221.59
Defined benefit obligation at the end of the year	738.35	697.32

Changes in the fair value of plan assets are, as follows:

	As at 31 March 2019	As at 31 March 2018
Fair value of plan assets at the beginning of the year	664.62	453.52
Contribution by employer	0.00	240.00
Benefits paid	(51.21)	(44.89)
Interest Income on plan assets	47.29	39.13
Return on plan assets greater/(lesser) than discount rate - OCI	3.31	(23.14)
Fair value of plan assets at the end of the year	664.01	664.62

The major categories of plan assets of the fair value of the total plan assets are as follows:

Gratuity	As at 31 March 2019	As at 31 March 2018
Investment Details	Funded	Funded
	100%	100%
- Insurer	94.36	68.01
- Bank Balances	5.64	3.33
- Special deposit scheme	-	28.66

The principal assumptions used in determining gratuity liability for the Parent Company''s plans are shown below:

	As at 31 March 2019	As at 31 March 2018
	%	%
Discount rate	7.1	7.4
Salary increase
- Management	7.0	7.0
- Non management	7.0	7.0
Employee turnover Non Management
20-24	7.0	7.0
25-29 and 55-60	7.0	7.0
30-34 and 50-54	7.0	7.0
35-49	7.0	7.0
Management
20-25	7.0	7.0
26-35	7.0	7.0
36 and above	7.0	7.0

The estimates of future salary increases have been considered in actuarial valuation based on inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

A quantitative sensitivity analysis for significant assumption as at 31 March 2019 is as shown below:

Gratuity Plan	Sensitivity level		Impact on DBO
	As at 31 March 2019	As at 31 March 2018	As at 31 March 2019	As at 31 March 2018
Assumptions
Discount rate	1.00%	1.00%	(38.36)	(36.56)
	-1.00%	-1.00%	42.63	40.58
Future salary increases	1.00%	1.00%	41.49	39.82
	-1.00%	-1.00%	(38.21)	(36.66)

The sensitivity analyses above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period.

The table below shows the expected undiscounted cash flow profile of the benefits to be paid to the current membership of the plan based on past service of the employees as at the valuation date:-

	As at 31 March 2019	As at 31 March 2018
Within the next 12 months (next annual reporting period)	77.99	75.07
Between 2 and 5 years	410.98	382.08
Between 5 and 10 years	515.40	503.34
Total expected payments	1,004.37	960.49

The average duration of the defined benefit plan obligation at the end of the reporting period is 6 years (31 March 2018: 6 years). Expected employer contribution for the period ending 31 March 2020 is INR 75 million.

b) Contribution to defined contribution plans:

	For the year ended 31 March 2019	For the year ended 31 March 2018
Pension fund	0.10	0.09

c) Provident Fund:

The provident fund (where administered by a Trust) is a defined benefit scheme where by the Parent Company deposits an amount determined as a fixed percentage of basic pay to the fund every month. The benefit vests upon commencement of employment. The interest credited to the accounts of the employees is adjusted on an annual basis to confirm to the interest rate declared by the government for the Employees Provident Fund. As per the Actuarial Society of India guidance note (GN21) for measurement of provident fund liabilities, the actuary has accordingly provided a valuation based on the below provided assumptions, there is no shortfall as at 31 March 2019.

	As at 31 March 2019	As at 31 March 2018
Discount rate	7.35%	7.58%
Expected return on exempt fund	8.41 %	8.32%
Rate of return on EPFO managed PF	8.65%	8.55%
Mortality rate	Indian Assured Lives Mortality (2006-08) ultimate	Indian Assured Lives Mortality (2006-08) ultimate

	For the year ended 31 March 2019	For the year ended 31 March 2018
Contribution to provident and other funds*	136.00	128.42

*Included under employee benefit expense in the head contribution to provident and other funds. The detail of fund and plan asset position as at 31 March 2019 is given below:

	As at 31 March 2019	As at 31 March 2018
Plan assets at fair value	4,522.40	4,327.75
Present value of the defined benefit obligation	3,896.05	3,677.08
Asset recognized in the balance sheet	NIL	NIL

Information relating to reconciliation from opening balance to closing balance for plan assets and present value of defined benefit obligation, classes of plan assets help, sensitivity analysis for actuarial assumptions, other than disclosed above, including the methods and assumptions used in preparing the analysis, expected contribution for the next year and maturity profile of the defined benefit obligation as required by INDAS -19 ''Employee benefits'' is not available with the Company. 31. Contingent liabilities, commitments and leases A. Contingent liabilities a) Claims against group not acknowledged as debts includes:

Nature	As at 31 March 2019	As at 31 March 2018
Excise, customs and service tax cases	125.61	145.65
Sales tax cases	15.80	21.80
Others*	278.97	277.58
Income tax cases	15.51	15.51
Total	435.89	460.54

*Others include individually small cases pertaining to rent, labour etc.

b) In August 2014, M/s Crocs Limited filed a suit on Bata India limited for trademark infringement. The lower court passed an ex-parte injunction order which was later transferred to Hon''ble Delhi High Court on account of jurisdictional issue. The single bench of Delhi High Court dismissed the injunction application and awarded costs to Bata throughout the proceedings. Against this order, Crocs Limited filed an appeal before the Division Bench, which also stands dismissed.

c) In February 2019, Supreme Court of India in its judgement clarified the applicability of allowances that should be considered to measure obligations under Employees Provident Fund Act, 1952. The Company has been legally advised that there are interpretative challenges on the application of judgement retrospectively and as such does not consider there is any probable obligations for past periods. Accordingly, based on legal advice the Company has made a provision for provident fund contribution from the date of Supreme Court order.

B. Commitments

Estimated amount of contracts remaining to be executed for capital expenditure and not provided for amounted to INR 297.94 million (31 March 2018: INR 312.79 million).

C. Leases

Assets taken on operating lease

a) The Parent Company has taken various residential, office, warehouse and shop premises under operating lease agreements. The lease agreements generally have an escalation clause and there are no subleases. These leases are generally not non-cancellable and are renewable by mutual consent on mutually agreed terms. There are no restrictions imposed by lease agreements.

b) The aggregate lease rentals payable are charged as ''Rent'' in Note 25.

Future minimum rentals payable under non-cancellable operating leases as at 31 March 2019 and 31 March 2018 are as follows:

Lease Rentals	As at 31 March 2019	As at 31 March 2018
Within one year	71.71	52.29
After one year but not more than five years	8.13	10.72
More than five years	-	-

32. Financial instruments and fair values classification

Set out below, is a comparison by class of the carrying amounts and fair value of the Group''s financial instruments.

		Carrying value		Fair value
	Notes	As at 31 March 2019	As at 31 March 2018	As at 31 March 2019	As at 31 March 2018
Financial assets
Amortised cost
Loans
- Loans & advances to related parties	(b)	5.49	7.68	5.49	7.68
- Investments in bonds	(b)	-	5.00	-	4.90
- Security deposits	(b)	1,049.38	937.57	1,049.38	937.57
Financial asset not measured at fair value
Other financial assets
- Interest accrued on deposits	(a)	342.25	217.01	_	_
- Insurance claim receivable		2.72	0.92	-	-
- Other receivables		96.58	114.25	-	-
Trade receivable	(a)	663.50	893.50	-	-
Cash & cash equivalents	(a)	585.79	545.11	-	-
Other bank balances	(a)	7,838.78	5,367.44	-	-
Total		10,584.49	8,088.48	1,054.87	950.15
Financial liabilities
Amortised cost
Trade Payables	(a)	1,015.42	1,049.20	-	-
Financial liabilities not measured at fair value
Trade payables	(a)	5,144.76	4,786.07	-	-
Other financial liabilities	(a)
- Payable for capital goods		118.96	27.30	-	-
- Deposit from agents and franchisees		282.16	312.83	-	-
- Unpaid dividend		15.92	13.73	-	-
Total		6,577.22	6,189.14	-	-

a) The management has not disclosed the fair values for financial instruments because their carrying values are approximate to their fair value largely due to the short-term maturities of these instruments.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

The fair value of unquoted instruments, is estimated according to Fixed Income Market Valuation Procedure (FIMMDA) by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities. The valuation requires management to use unobservable inputs in the model, of which the significant unobservable inputs are disclosed in the tables below. Management regularly assesses a range of reasonably possible alternatives for those significant unobservable inputs and determines their impact on the total fair value.

Valuation technique	Significant unobservable inputs	Range (weighted average)	Sensitivity of the input to fair value
Fixed Income Market Valuation Procedure (FIMMDA)	Credit Spread	31 March 2019: 0.5%- 1%	31 March 2019: 10% increase (decrease) in the credit spread would result in increase (decrease) in fair value by INR NIL.
		31 March 2018: 0.5%- 1%	31 March 2018: 10% increase (decrease) in the credit spread would result in increase (decrease) in fair value by INR 4 thousand.

33. Capital Management

For the purpose of the Group capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Group. The primary objective of the Group''s capital management is to maximize the shareholder value.

The Group manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Group includes within net debt, interest bearing loans and borrowings, less cash and cash equivalents. The Group is having INR Nil borrowings as on 31 March 2019 (31 March 2018 INR Nil).

34. Derivative instruments and Unhedged foreign currency exposure

Derivative Instruments and Unhedged Foreign Currency Exposure, which are not intended for trading or speculation purpose.

Particulars of unhedged foreign currency exposures are as follows

					(INR million)
Particulars of Unhedged foreign	Currency	Amount in Foreign Currency		Amount in Indian Currency
currency exposure		As at 31 March 2019	As at 31 March 2018	As at 31 March 2019	As at 31 March 2018
	USD	3,464,964.55@69.17	5,223, 192.22@65.64	239.67	342.83
	EURO	-	8,159@80.35	-	0.66
Advance for Import purchases	USD	-	72,619.2@65.64	-	5.04
	USD	242,905.53@69.17	255,421.04@65.64	16.80	16.77
Trade receivables	EURO	-	7,535@80.35	-	0.61
	CHF	44,276@69.72	36,644@68.69	3.09	2.52

35. Details of corporate social responsibility expenditure

As per Section 135 of Companies Act, 2013, a Company needs to spend at least 2% of its average net profit for the immediately preceding three financial years on Corporate Social Responsibility (CSR) activities. A CSR Committee has been formed by the Company as per act. The CSR Committee and Board had approved the projects with specific outlay on the activities as specified in Schedule VII of the act, in pursuant of the CSR policy.

	For the year ended 31 March 2019	For the year ended 31 March 2018
Gross amount required to be spent by the group during the year:-	58.07	55.80
(i) Construction/ Acquisition of asset	_	_
(ii) For purpose other than (i) above*	64.24	71.14
	64.24	71.14

*Included in CSR expenditure in Note 25 36. Related party disclosures

Names of related parties and related party relationship

I. Related parties where control exists
a. Ultimate holding company	Compass Limited
b. Immediate Holding company	BATA (BN) B.V. The Netherlands
c. Other Related Parties*	Bata India Limited Gratuity Fund
	Bata India Limited Pension Fund
	Bata India Limited Employees Statutory Provident Fund
â¢Refer notes 30 for information on transactions with post employment benefit plans mentioned above enterprise controlled by the Group.
II. Related parties with whom transactions have taken place
a. Key management personnel	Rajeev Gopalakrishnan - Managing Director
	Ram Kumar Gupta - Director Finance
	Sandeep Kataria - Whole Time Director & Chief Executive Officer
	Uday Khanna (Chairman & Independent Director)
	Ravi Dhariwal (Independent Director)
	Akshay Chudasama (Independent Director)
	Anjali Bansal (Independent Director)
	Ashok Barat (Independent Director) (w.e.f. 17.12.2018)
b. Enterprises in which director is interested	Shradul Amarchand Mangaldas & Co. Delhivery Private Limited
c. Fellow Subsidiaries with whom transactions have taken place during the year and previous period	Bata Shoe (Singapore) Pte. Ltd
	Global Footwear Services Pte Ltd
	Bata Malaysia SON. BHD.
	The Zimbabwe Bata Shoe Co.
	Bata Shoe Co. of Ceylon Ltd.
	China Footwear Services
	Bata Industrials Europe-Netherland
	Bata Shoe Co. (Bangladesh) Ltd.
	International Footwear Investment B.V.
	Bata Brands S.A.
	Empresas Commercial S.A.
	PT Sepatu BATA Tbk.
	Power Athletics Ltd.
III. Additional related parties as per the Companies Act 2013 with whom transactions have taken place:
Company Secretary	Mr. Arunnito Ganguly (w.e.f. 15.12.2017)
	Mr. Maloy Kumar Gupta upto 31.10.2017

IV. Related party transactions

The following table provides the total amount of transactions that have been entered into with related parties for the relevant financial year:

Nature of the Transactions	Related Party		For the year ended 31 March 2019	For the year ended 31 March 2018
i. Sale of goods	Empresas Commercial S.A.		1.49	2.26
	Bata Shoe Co. (Bangladesh) Ltd		8.22	32.45
	Bata Shoe Co. of Ceylon Ltd.		16.47	14.71
	The Zimbabwe Bata Shoe Co.		1.00	0.39
		Total	27.18	49.80
ii Reimbursement of Expenses to	Bata Malaysia SDN. BHD		-	0.52
	Bata Brands S.A.		5.14	3.54
	Bata Shoe (Singapore) Pte Ltd.		0.96	2.22
	Bata Industrials Europe-Netherland		-	0.06
		Total	6.10	6.34
iii. Reimbursement of Expenses from	International Footwear Investment B.V.		7.82	8.89
	Global Footwear Services Pte Ltd.		0.07	_
	Bata Brands S.A.		13.40	10.78
	China Footwear Services		-	1.33
	PT Sepatu BATA Tbk.		0.02	-
	Bata Shoe Co. of Ceylon Ltd.		-	0.14
		Total	21.31	21.14
iv. Technical collaboration fees	Global Footwear Services Pte Ltd.		283.96	246.15
		Total	283.96	246.15
v. Royalty	Bata Brands S.A.		15.17	20.34
		Total	15.17	20.34
vi. Service Fees	Power Athletics Ltd.		32.90	_
	Bata Industrials Europe-Netherland		2.60	-
		Total	35.50	_
vii. Legal and professional fees	Shardul Amarchand Mangaldas & Co.		1.98	0.39
		Total	1.98	0.39
viii. Freight charges	Delhivery Private Limited		9.80	0.94
		Total	9.80	0.94
ix. Dividend Paid	BATA (BN) B.V. The Netherlands, Amsterdam		272.26	238.23
		Total	272.26	238.23

x. Remuneration to Directors and other key managerial personnel *
Name of the Director/ Other Key Managerial Personnel	For the year ended 31 March 2019	For the year ended 31 March 2018
Rajeev Gopalakrishnan	48.62	44.71
Ram Kumar Gupta	23.35	19.11
Sandeep Kataria (w.e.f. 14.11.2017)	31.97	10.41
Maloy Kumar Gupta (till 31.10.2017)	-	3.31
Arunito Ganguly (w.e.f. 15.12.2017)	2.32	0.71
Uday Khanna (Independent Director)**	3.35	3.50
Ravi Dhariwal (Independent Director)**	2.17	2.57
Akshay Chudasama (Independent Director)**	2.02	2.12
Anjali Bansal (Independent Director)**	1.77	1.92
Ashok Kumar Barat (Independent Director) (w.e.f. 17.12.2018)**	0.05	-
Total	115.62	88.36

* As the liabilities for provident fund, gratuity and compensated absences are provided on an actuarial basis for the Company as a whole,

the amounts pertaining to the directors are not included above.

**As per the section 149(6) of the Companies Act, 2013, Independent Directors are not considered as "Key Managerial Person", however

to comply with the disclosure requirements of Ind AS-24 on "Related party transactions" they have been disclosed as "Key Managerial

Person".

V. Balances outstanding as at the end of the year
Nature of the Balance	Related Party		As at 31 March 2019	As at 31 March 2018
i. Trade receivables	Bata Shoe Co. (Bangladesh) Ltd		3.56	8.26
	Bata Shoe Co. of Ceylon Ltd.		6.05	4.05
	Empresas Commercial S.A.		0.33	-
	The Zimbabwe Bata Shoe Co.		0.98	-
		Total	10.92	12.31
ii Trade payables - Reimbursement of Expenses to	Bata Malaysia SDN. BHD		-	0.05
	Bata Brands S.A.		-	0.66
		Total	-	0.71
iii. Other Financial assets	Bata Shoe Co. of Ceylon Ltd.		0.13	0.14
	International Footwear Investment B.V		2.41	4.83
	Bata Brands SA		3.07	2.71
		Total	5.61	7.68
iv. Other liability -Advance from customers	Empresas Comerciales S.A.		_	0.24
		Total	-	0.24
v. Trade payables -Technical collaboration Fees	Global Footwear Services Pte Ltd.		47.21	61.58
		Total	47.21	61.58
vi. Trade payables - Royalty	Bata Brands S.A.		2.24	3.76
		Total	2.24	3.76
vii. Trade payables - Service fees	Power Athletics Ltd.		9.17
	Bata Industrials Europe-Netherland		2.60	-
		Total	11.77	-
viii. Trade payables - Legal and professional fees	Shardul Amarchand Mangaldas & Co.		_	0.11
		Total	-	0.11
ix. Trade payables - Freight	Delhivery Private Limited		2.02	0.18
		Total	2.02	0.18

VI. Group information

Information about subsidiaries

The consolidated financial statements of the Group includes subsidiaries listed in the table below:

		Country of Incorporation	%ge of Equity Interest
Name	Principal Activities	Country of Incorporation	As at 31 March 2019	As at 31 March 2018
Bata Properties Limited	Letting of Properties	India	100%	100%
Coastal Commercial & Exim Limited	Letting of Properties	India	100%	100%
Way Finders Brands Limited	Trading of Apparels/footwear under Brand of CAT	India	100%	100%

37. Specified Bank Notes (SBNs)

The disclosures regarding details of specified bank notes held and transacted during 8 November 2016 to 30 December 2016 has not been made in these financial statements since the requirement does not pertain to financial year ended 31 March 2019.

38. Details of dues to micro and small enterprises as defined under the MSMED Act, 2006

Particulars	As at 31 March 2019	As at 31 March 2018
The principal amount and the interest due thereon remaining unpaid to any supplier as at the end of year reported in Current Trade Payables
Principal Amount Unpaid	161.71	37.96
Interest Due	-	-
The amount of interest paid by the buyer in terms of section 16, of the MSMED Act, 2006 along with the amounts of the payment made to the supplier beyond the appointed day during the year
Payment made beyond the Appointed Date	265.38	247.89
Interest Paid beyond the Appointed Date	-	-
The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under MSMED Act, 2006.	"	"
The amount of interest accrued and remaining unpaid at the end of the year; and	-	-
The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise for the purpose of disallowance as a deductible expenditure under section 23 of the MSMED Act, 2006	-	-

39. Mutation of names in respect of the shop premises in favour of subsidiaries- Bata Properties Limited and Coastal & Commercial Exim Limited is pending.

40. Financial risk management objectives and policies

The Group''s principal financial liabilities comprise trade and other payables. The main purpose of these financial liabilities is to finance the Group''s operations . The Group''s principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations.

The Group''s activities expose it to a variety of financial risk: market risk, credit risk and liquidity risk. The Group''s focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.

A) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. The primary market risk to the Group is foreign exchange risk. Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Group''s exposure to the risk of changes in foreign exchange rates relates primarily to the Group''s operating activities (when revenue or expense is denominated in a foreign currency) primarily with respect to USD and Euro.

The Group uses forward contracts to mitigate foreign exchange related risk exposures. When a forward contract is entered into for the purpose of being a hedge, the Group negotiates the terms of those contracts to match the terms of the hedged exposure. The Group''s exposure to unhedged foreign currency risk as at 31 March 2019 and 31 March 2018 has been disclosed in note 34.

For the year ended 31 March 2019, every 5 percentage point depreciation/appreciation in the exchange rate between the Indian rupee and U.S. dollar, would have affected the Group''s profit before tax by (11.14) million/11.14 million respectively and Pre tax equity by (11.14) million/11.14 million respectively.

For the year ended 31 March 2018, every 5 percentage point depreciation/appreciation in the exchange rate between the Indian rupee and U.S. dollar, would have affected the Group''s profit before tax by (16.07) million/16.07 million respectively and Pre tax equity by (16.07) million/16.07 million respectively.

B) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group is exposed to credit risk from its operating activities (primarily trade receivables and deposits to landlords) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments. The Group generally doesn''t have collateral.

a) Trade receivables

Customer and vendor credit risk is managed by business through the Group''s established policy, procedures and control relating to customer credit risk management. Credit quality of each customer is assessed and credit limits are defined in accordance with this assessment. Outstanding customer receivables and security deposits are regularly monitored.

An impairment analysis is performed for all major customers at each reporting date on an individual basis. In addition, a large number of minor receivables are Grouped into homogenous Groups and assessed for impairment collectively. The calculation is based on historical data. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in note 9. The Group evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.

(b) Loans and other financial assets

With regards to all the financials assets with contractual cash flows other than trade receivables, management believes these to be high quality assets with negligible credit risk. The management believes that the parties from which these financial assets are recoverable have strong capacity to meet the obligations and where the risk of default is negligible. The maximum exposure to credit risk at the reporting date in each class of financial assets is disclosed in note 5,10 and 11.

C) Liquidity risk

The Group''s principal source of liquidity is cash and cash equivalents and the cash flow that is generated from operations. The Group has no outstanding bank borrowings. The Group believes that the working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived.

As of March 31, 2019, the Group had a working capital of INR 12107.64 million including cash and cash equivalents of INR 585.79 million. As of 31 March 2018, the Group had a working capital of INR 9941.14 million including cash and cash equivalents of INR 545.11 million.

D) Commodity price risk

The Group is exposed to the risk of price fluctuation of raw material as well as finished goods. The Group manages its commodity price risk by maintaining adequate inventory of raw materials and finished goods considering future price movement. To counter raw material risk, the Group works with variety of leather, PVC and rubber with the objective to moderate raw material cost, enhance application flexibility and increased product functionality and also invests in product development and innovation. To counter finished goods risk, the Group deals with wide range of vendors and manages these risks through inventory management and proactive vendor development practices.

Inventory sensitivity analysis (raw material, work in progress and finished goods)

	Profit or loss		Equity, net of tax
	5% increase	5% decrease	5% increase	5% decrease
31 March 2019 Inventory (raw material, work in progress, stock in trade and finished goods)	(256.81)	256.81	(167.07)	167.07
31 March 2018 Inventory (raw material, work in progress, stock in trade and finished goods)	(236.19)	236.19	(154.45)	154.45

41. Additional information under general instructions for the preparation of consolidated financial statements of Schedule III to the Companies Act, 2013

SI. No.	Name of the Entity	Net Assets, i.e. total assets minus liabilities				Share in profit or loss for the year ended
		As at 31 March 2019		As at 31 March 2018		31 March 2019		31 March 2018
		As % of Consolidated net assets	Amount	As % of Consolidated net assets	Amount	As % of Consolidated profit & loss	Amount	As % of Consolidated profit & loss	Amount
Parent	Bata India Limited	99.98%	17,415.27	99.93%	14,737.11	100.20%	3,296.59	101.39%	2,235.78
Subsidiaries
1	Bata Properties Limited	0.31%	53.33	0.35%	51.25	0.06%	2.08	0.08%	1.76
2	Coastal Commercial & Exim Limited	0.01%	1.61	0.01%	1.52	0.00%	0.09	0.01%	0.21
3	Way Finders Brands Limited	-0.30%	(51.78)	-0.29%	(42.96)	-0.27%	(8.82)	-1.48%	(32.63)
Total			17,418.44		14,746.92		3,289.94		2,205.13

42. Segment reporting

Segment information is presented in respect of the Group''s key operating segments. The operating segments are based on the Group''s management and internal reporting structure.

Operating Segments

The Group''s Managing Director and CEO has been identified as the Chief Operating Decision Maker (''CODM''), since Managing Director and CEO are responsible for all major decision w.r.t. the preparation and execution of business plan, preparation of budget and other key decisions.

Managing director and CEO reviews the operating results at the group level to make decisions about the group''s performance. Accordingly, management has identified the business as single operating segment i.e. Footwear & Accessories. Accordingly, there is only one Reportable Segment for the Group which is "Footwear and Accessories", hence no specific disclosures have been made.

a) Revenue and Trade receivables as per geographical markets

Particulars	Revenue		Trade receivables
Particulars	For the year ended 31 March 2019	For the year ended 31 March 2018	As at 31 March 2019	As at 31 March 2018
India	29,201.19	26,286.95	637.31	871.38
Outside India	109.84	125.21	26.19	22.12
Total	29,311.03	26,412.16	663.50	893.50

b) The non-current assets of the Group are located in the country of domicile i.e. India. Hence no specific disclosures have been made.

c) There are no customer having revenue greater than 10% of the total revenue of the group.

As per our report of even date

For and on behalf of the Board of Directors of Bata India Limited

For B S R & Co. LLP

Uday Khanna

Rajeev Gopalakrishnan

Arunito Ganguly

Chartered Accountants

Chairman

Managing Director

Mar 31, 2017

1. Corporate information

Bata India Limited is primarily engaged in the business of manufacturing and trading of footwear and accessories through its retail and wholesale network. The financial statements are authorised for issue in accordance with a resolution passed in the board meeting held on May 15, 2017.

Bata India Limited is a public company domiciled in India. Its shares are listed on three stock exchanges in India. The registered office of the company is located at 27B, Camac Street, 1st floor, Kolkata - 700016.

2.1 Basis of Preparation

The financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015.

For all periods up to and including the year ended March 31, 2016, the Company has prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014. These financial statements for the year ended March 31, 2017 are the first the Company has prepared in accordance with Ind AS. Refer to note 44 for information on how the Company adopted Ind AS.

The financial statements have been prepared on a historical cost or at amortised cost except for the following assets and liabilities:

The financial statements are presented in INR and all values are rounded to the nearest Million (INR 000,000), except when otherwise stated.

3. Significant accounting judgments, estimates and assumptions

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

a. Judgements

In the process of applying the Companyâs accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the financial statements:

a (i) Contingent liabilities

Contingent liabilities may arise from the ordinary course of business in relation to claims against the Company, including legal and other claims. By their nature, contingencies will be resolved only when one or more uncertain future events occur or fail to occur. The assessment of the existence, and potential quantum, of contingencies inherently involves the exercise of significant judgement and the use of estimates regarding the outcome of future events.

a (ii) Operating lease commitments -Company as lessee

The Company has taken shop premises under operating lease agreements. The lease agreements generally have an escalation clause and there are no sub-leases. These lease are generally not non-cancellable and are renewable by mutual consent on mutually agreed terms. The Company based on a evaluation of the terms and conditions of the agreements assessed that the escalation are as per the mutually agreed terms and are not structured to increase necessarily in line with expected general inflation and hence operating lease payments are continued to be recognised as an expense in The Statement of profit and loss on straight line basis over the lease term.

b. Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market change or circumstances arising beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

b.1 Defined benefit plans

The cost of the defined benefit gratuity plan and other post-employment defined benefits are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation. The underlying bonds are further reviewed for quality.

The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates.

Further details about gratuity obligations are given in Note 32.

b.2 Revenue recognition - Loyalty programme

The Company estimates the fair value of points awarded under the Loyalty programme " The Bata Club", by applying statistical techniques. Inputs to the model include making assumptions about expected redemption rates, the mix of products that will be available for redemption in the future and customer preferences. As points issued under the programme expire on expiry of specified period in accordance with the programme, such estimates are subject to significant uncertainty. As at 31 March 2017, the estimated liability towards unredeemed points amounted to approximately INR 9.02 million (31 March 2016: INR 7.01 million, 1 April 2015: INR 1.21 million).

4. Earnings Per Share (EPS)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of Equity shares outstanding during the year.

Diluted EPS are calculated by dividing the profit for the year attributable to the equity holders of the Company by weighted average number of Equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares.

5. Note 22 includes R&D expenses of INR 42.81 million (Previous year INR 38.02 million) and Note 25 includes R&D expenses of INR 15.16 million (Previous year INR 21.72 million).

6. The Company in the earlier years, entered into a joint venture agreement for the development of the township at Batanagar with Riverbank Developers Private Limited (RDPL). Thereafter, in April 2010, while retaining the legal title over the land at Batanagar Project and shares in the erstwhile Joint Venture Company (RDPL), the Company restructured its agreements with revised terms and conditions and received 315,000 sq. ft. of employee housing recorded as fixed assets at INR 433.75 million and also recorded a liability of INR 216.24 million for obligation to be fulfilled. In December 2013, the Company had signed an addendum to the development agreement to receive further constructed area of 332,030 sq. ft against 325,000 sq. ft agreed in April 2010.

During the previous period, the Company had received approval from the West Bengal Government committee, inter alia, specifying that the Company had completed the obligations with respect to Batanagar factory, retail stores and employee housing and RDPL were to complete balance employee housing.

During the previous year, the Company had received possession of balance apartment measuring to 195,075 sq. ft. and recognized an exceptional income of INR 306.31 million, based on fair valuation undertaken by an independent valuer. Further, the management believes it had already discharged its obligations and had reassessed the provision for contingencies. Accordingly the Company had reversed the provision for contingencies of INR 123.24 million as exceptional income in the previous year.

7. Employee benefit plans

a) Gratuity and other post-employment benefit plans:

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at the rate of 15 days salary (last drawn salary) for each completed year of service. The scheme is funded through the companies own trust.

The Company has also provided long term compensated absences which are unfunded.

The following tables summarise the components of net benefit expense recognised in the statement of profit or loss and the funded status and amounts recognised in the balance sheet for the gratuity plan:

b) Contribution to Defined Contribution Plans:

c) Provident Fund:

The Provident Fund (where administered by a Trust) is a defined benefit scheme where by the Company deposits an amount determined as a fixed percentage of basic pay to the fund every month. The benefit vests upon commencement of employment. The interest credited to the accounts of the employees is adjusted on an annual basis to confirm to the interest rate declared by the government for the Employees Provident Fund. As per the Actuarial Society of India guidance note (GN21) for measurement of provident fund liabilities, the actuary has accordingly provided a valuation based on the below provided assumptions, there is no shortfall as at 31 March, 2017.

A. Contingent Liabilities

a) Claims against Company not acknowledged as debts includes:

*Others include individually small cases pertaining to rent, labour etc.

** During the Financial Year 2012-13, the Company had received an order of Commissioner of Income Tax under section 263 of the Income Tax Act, 1961 directing the assessing officer for re-computation of consideration adopted by Company for computation of long term capital gain for A.Y. 2007-08 on transfer of development rights of Batanagar land to River Bank Holding Private Ltd (erstwhile JV company). The amount of tax liability was not mentioned in the order. The Company had filed an appeal to Income Tax Appellate Tribunal against the said order.

During the financial year 2015-16, the Company had received an order of Commissioner of Income Tax under section 263 of the Income Tax Act, 1961 directing the assessing officer for re-computation of cost of construction adopted by Company for computation of long term capital gain for A.Y. 2007-08 on transfer of development rights of Batanagar land to River Bank Holding Private Ltd (erstwhile JV Company).

The Company on the basis of consultantâs advice believes that it has a good case and hence no provision there against is considered necessary. As per the agreement, liability of income tax on such transfer, if any, will be borne by the erstwhile JV Company.

On the basis of current status of individual cases and as per legal advice obtained by the Company wherever applicable, the Company is confident that no provision is required, as per the relevant provisions of the Companies Act, 2013 in respect of these cases.

b) In August 2014, M/s Crocs Limited filed a suit on Bata India limited for trademark infringement. The Lower court passed an ex-parte injunction order which was later transferred to Honâble Delhi High Court on account of jurisdictional issue. The management based upon the legal opinion believes that the Company has a strong case on merits and believes that no adjustment is required in the financial statements in this regard.

B. Commitments

Estimated amount of contracts remaining to be executed for capital expenditure and not provided for amounted to INR 109.48 million (Previous year: INR 65.09 million).

C. Leases

Assets Taken on Operating Lease

a) The Company has taken various residential, office, warehouse and shop premises under operating lease agreements. The lease agreements generally have an escalation clause and there are no subleases. These leases are generally not non-cancellable and are renewable by mutual consent on mutually agreed terms. There are no restrictions imposed by lease agreements.

b) The aggregate lease rentals payables are charged as âRentâ in Note 25.

Future minimum rentals payable under non-cancellable operating leases as at 31 March are, as follows:

For the purpose of the Companyâs capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Companyâs capital management is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Companyâs policy is to keep the gearing ratio between 15% and 45%. The Company includes within net debt, interest bearing loans and borrowings, trade and other payables(other than non-current trade payable), less cash and cash equivalents.

8. Derivative instruments and Unhedged foreign currency exposure

Derivative Instruments and Unhedged Foreign Currency Exposure, which are not intended for trading or speculation purpose.

Till September 30, 2015 , the Company was organised into business units based on its products and services and has two reportable segments, as follows: Footwear & Accessories and Surplus Property Development.

As at 30th September 2015, the Company fulfilled all its obligations pertaining to the Surplus Property Development and hence thereafter, the Company operates in a single segment i.e. Footwear & Accessories.

9. Capitalization of expenditure

During the previous year, the Company had capitalized the following expenses of revenue nature to the intangiable assets under development. Consequently, expenses disclosed under the respective notes were net of amounts capitalized by the Company.

10. Due to setbacks in implementation of ERP software and based upon internal assessment, the management believes that the ERP reimplementation would involve complete change in design and accordingly in the previous year had decided to charge the expenditure of INR 290.55 million incurred on implementation, except for INR 56.06 million incurred on perpetual licenses which is being carried under intangible assets under development. The management is presently developing plans to initiate fresh implementation.

The Companyâs principal financial liabilities comprise trade and other payables. The main purpose of these financial liabilities is to finance the Companyâs operations . The Companyâs principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations.

The Companyâs activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Companyâs focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.

Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. The primary market risk to the Company is foreign exchange risk. Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Companyâs exposure to the risk of changes in foreign exchange rates relates primarily to the Companyâs operating activities (when revenue or expense is denominated in a foreign currency).

The Company uses forward contracts to mitigate foreign exchange related risk exposures. When a forward contract is entered into for the purpose of being a hedge, the Company negotiates the terms of those contracts to match the terms of the hedged exposure. The Companyâs exposure to unhedged foreign currency risk as at March 31, 2017 and March 31, 2016 has been disclosed in note 36.

For the year ended March 31, 2017, every 5 percentage point depreciation/appreciation in the exchange rate between the Indian rupee and U.S. dollar, would have affected the Companyâs profit before tax by (1.62) million/ 1.62 million respectively and Pre tax equity by (1.62) million/ 1.62 million respectively.

For the year ended March 31, 2016, every 5 percentage point depreciation/appreciation in the exchange rate between the Indian rupee and U.S. dollar, would have affected the Companyâs profit before tax by (0.73) million/ 0.73 million respectively and Pre tax equity by (0.73) million/ 0.73 million respectively.

Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables and deposits to landlords) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments. The Company generally doesnât have collateral.

Trade receivables and Security Deposits

Customer credit risk is managed by business through the Companyâs established policy, procedures and control relating to customer credit risk management. Credit quality of each customer is assessed and credit limits are defined in accordance with this assessment. Outstanding customer receivables and security deposits are regularly monitored.

An impairment analysis is performed for all major customers at each reporting date on an individual basis. In addition, a large number of minor receivables are grouped into homogenous group and assessed for impairment collectively. The calculation is based on historical data. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in note 5. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several industries and operate in largely independent markets.

Liquidity risk

The companyâs principal source of liquidity is cash and cash equivalents and the cash flow that is generated from operations. The company has no outstanding bank borrowings. The company believes that the working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived

As of March 31, 2017, the Company had a working capital of INR 8,562.30 Million including cash and cash equivalents of INR 616.99 Million . As of March 31, 2016, the Company had a working capital of INR 7,424.54 Million including cash and cash equivalents of INR 888.74 Million.

11. First time adoption of Ind AS

These financial statements, for the year ended 31 March 2017, are the first the Company has prepared in accordance with Ind AS. For periods up to and including the year ended 31 March 2016, the Company prepared its financial statements in accordance with Indian GAAP.

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on or after 31 March 2017, together with the comparative period data as at and for the year ended 31 March 2016, as described in the summary of significant accounting policies. In preparing these financial statements, the Companyâs opening statement of financial position was prepared as at 1 April 2015, the Companyâs date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the statement of financial position as at 1 April 2015 and the financial statements as at and for the year ended 31 March 2016.

I Exemptions applied

Ind AS 101 allows first-time adopters certain mandatory and voluntary exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:

a) Property Plant & Equipment

As permitted by IND AS 101, the Company has elected to continue with the carrying values under previous GAAP for all the items of property, plant & equipment. The same selection has been made in respect of Intangibles Assets.

b) Determining whether an arrangement contain a lease :-

Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. However, the Company has used Ind AS 101 exemption and assessed all arrangements based for embedded leases based on conditions in place as at the date of transition.

c) Investment in subsidiaries:

The Company has elected this exemption and opted to continue with the carrying value of investment in subsidiaries, as recognised in its Indian GAAP financials, as deemed cost at the date of transition.

II Estimates

The estimates at 1 April 2015 and at 31 March 2016 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) apart from impairment of financial assets based on expected credit loss model where application of Indian GAAP did not require estimation.

12. Specified Bank Notes (SBNs)

Ministry of Corporate Affairs issued an amendment to Schedule III of the Companies Act, 2013, regarding general instructions for preparation of Balance Sheet, to disclose the details of Specified Bank Notes (SBN) held and transacted during the period 08/11/2016 to 30/12/2016.

Post demonetization, the management had directed all employees not to accept/ pay using the SBNâs. Further, in view of the numerous locations where cash is collected the management had obtained a direct confirmation from one of the Bank confirming the collection of SBNâs during the aforesaid period. For other banks, the Company had compiled the data on the basis of accounting records, bank statements and pay in slips for cash deposits during the period.

The aforesaid disclosures of SBNâs have been compiled taking the management stated policy, direct bank confirmation and compilation of pay in slips.

13. The following reconciliations provides the effect of transition to Ind AS from IGAAP in accordance with Ind AS 101

a) Equity as at April 1, 2015 and March 31, 2016

b) Net profit for the year ended March 31, 2016

Footnotes to the reconciliation of equity as at 1 April 2015 and 31 March 2016 and profit or loss for the year ended 31 March 2016

1 Provisions

Under Indian GAAP, proposed dividends including DDT are recognised as a liability in the period to which they relate, irrespective of when they are declared. Under Ind AS, a proposed dividend is recognised as a liability in the period in which it is declared by the Company (usually when approved by shareholders in a general meeting or paid).

In the case of the Company, the declaration of dividend occurs after period end. Therefore, the liability of INR 488.70 million for the year ended on 31 March 2015 recorded for dividend has been derecognised against retained earnings on 1 April 2015. The proposed dividend for the year ended on 31 March 2016 of INR 541.33 million recognized under Indian GAAP was reduced from provisions with a corresponding impact in the retained earnings.

2 Defined benefit liabilities

Both under Indian GAAP and Ind AS, the Company recognised costs related to its post-employment defined benefit plan on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to profit or loss. Under Ind AS, remeasurements [comprising of actuarial gains and losses, the effect ofthe asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts included in net interest on the net defined benefit liability] are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI. Thus the employee benefit cost is reduced by INR 17.68 milion and remeasurement gains/ losses on defined benefit plans of INR 11.56 million (net of tax of INR 6.12 million) have been recognized in the OCI.

3 Deferred tax

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP In addition, various transitional adjustments lead to temporary differences. According to the accounting policies, the Company has to account for such differences. Deferred tax adjustments are recognised in correlation to the underlying transaction either in retained earnings or a separate component of equity. On the date of transition, the net impact on deferred tax liabilities is of INR 128.45 million (31 March 2016: 128.44 million).

4 Other comprehensive income

Under Indian GAAP, the Company has not presented other comprehensive income (OCI) separately. Hence, it has reconciled Indian GAAP profit or loss to profit or loss as per Ind AS. Further, Indian GAAP profit or loss is reconciled to total comprehensive income as per Ind AS.

5 Statement of cash flows

The transition from Indian GAAP to Ind AS has not had a material impact on the statement of cash flows.

6 Financial Liabilities

Based on Ind AS -109, financial liabilities in the form of long term deposits from agents have been accounted at fair value at date of transition and subsequently measured at amortised cost using the effective interest rate method. Therefore the Other financial liabilities reduced by INR 100.72 million as at March 31, 2016 and by INR 89.95 million as at April 1, 2015 and Unearned revenue has been increased by INR 91.13 million as at March 31, 2016 and by INR 83.68 million as at April 1, 2015 with corresponding increase in retained earnings by INR 6.28 million (net of tax of INR 3.33 million) as at March 31, 2016 and INR 4.1 million (net of tax of INR. 2.17 million ) as at April 1, 2015. Consequently for the year ended March 31, 2016, the Finance expense has been increased by 0.20 million and Other Expense has been decreased by 3.52 million.

7 Financial Assets

Based on Ind AS -109, financial Assets in the form of long term interest free deposits to landlords have been accounted at fair value at date of transition and subsequently measured at amortised cost using the effective interest rate method. Therefore the Other Non-current Loans has been reduced by INR 310.31 million as at March 31, 2016 and INR 350.65 million as at April 1, 2015, Other Current assets has been increased by INR 78.27 million as at March 31, 2016 and 95.56 million as at April 1, 2015 , Other non current assets has been increased by INR 200.18 million as at March 31, 2016 and 226.53 million as at April 1, 2015 and corresponding impact of 20.83 million (net of deferred tax of INR 11.03 million) as at March 31, 2016 and INR 18.68 million (net of deferred tax of INR 9.88 Mn) as at April 1, 2015 has been adjusted to the retained earnings. Consequently for the year ended March 31, 2016, the Finance income & Other expense has been increased by 79.32 million and 82.73 million respectively.

8 Sale of goods

Under Indian GAAP, sale of goods was presented as net of excise duty and differential excise duty on opening and closing stock of manufactured goods is adjusted from Increase/Decrease in inventories. However, under Ind AS, sale of goods includes excise duty and Excise duty is separately presented on the face of statement of profit and loss. Thus sale of goods under Ind AS has increased by INR 332.05 Mn for the year ended March 31, 2016 with a corresponding increase of INR 332.05 in excise duty on sales on face of statement of profit and loss account.

9 Cash Discount

Under Previous GAAP, the discount given on Sales for early payment was recognised as an expense in the statement of profit and loss. However as per IND AS, if the discount is known at time of transfer of risk and reward then the same needs to be adjusted through revenue, accordingly Company has adjusted the revenue by INR 26.62 Mn with corresponding decrease in other expenses.

10 Trade receivables

Under Indian GAAP, the Company has created provision for impairment of receivables consists only in respect of specific amount for incurred losses. Under Ind AS, impairment allowance has been determined based on Expected Loss model (ECL). Due to ECL model, the Company impaired its trade receivable by INR 0.2 Mn on 1 April 2015 which has been eliminated against retained earnings. Earlier during the year ended March 31, 2016 the Company has impaired the receivables amounting to 8 million, however as per ECL the Impairment loss is calculated as 7.8 Mn, accordingly other expenses has been reduced by INR 0.2 million.

11 Depreciation of property, plant and equipment

Pursuant to the applicability of Schedule II of The Companies Act,2013 w.e.f. 1st April, 2015, the Company had reassessed the estimated useful lives of fixed Assets and accordingly depreciation of INR 35.53 Million was on account of assets whose useful life is already exhausted as on 1st April, 2015 has been adjusted to opening balance of retained earnings in terms of transitional provision of the said Schedule II. However as per Ind AS, the change in useful lives needs to be effected from the year in which useful lives were changed, accordingly depreciation for the year has been increased by INR 35.53 Million and corresponding deferred tax has been increased by INR 12.30 Million.

12 Deferred revenue

The Company operates a loyalty point programme, which allows customers to accumulate points when they purchase products in the Companyâs retail stores . The points can be redeemed for free products, subject to a minimum number of points being obtained. Under Indian GAAP, the Company creates a provision toward its liability under the reward programme. Under Ind AS, consideration received is allocated between the products sold and the points issued on a relative stand-alone selling price basis. If the stand-alone selling price for a customerâs option to acquire additional goods or services is not directly observable, the Company estimates it. Fair value of the points is determined by applying a statistical analysis. The fair value allocated to the points issued is deferred and recognised as revenue when the points are redeemed. On the date of transition, the Company has deferred revenue of INR 1.21 million (31 March 2016: INR 7.01 Mn). Accordingly the provision has been reduced by INR 1.21 million as at 1 April 2015 and INR 7.01 mn as at 31 March 2017 with a corresponding increase in Other current liabilities by INR 1.21 million as at 1 April 2015 and INR 7.01 Mn as at 31 March 2017.

13 Revaluation Reserves

Under the Indian GAAP the Company has revalued the property plant and equipment and was carrying the revaluation reserve in the financial statements. During the transition to Ind AS the Company has has elected to carry IGAAP cost as deemed cost of property plant and equipment at the date of transition to Ind AS, hence an increase of INR 175.12 Mn (net of tax) was transferred from Revaluation reserve to General Reserve.

14 Previous Yearâs figures have been regrouped/reclassified, wherever necessary, to conform to the classification of current year.

Dec 31, 2013

1. CORPORATE INFORMATION

Bata India Limited is a public company domiciled in India and incorporated under the provisions of The Indian Companies Act, 1913. Its shares are listed on Stock exchanges in India. Bata India Limited is primarily engaged in the business of manufacturing and trading of footwear and accessories through its retail and wholesale network.

2. Note 19 includes R&D expenses of Rs.43.89 millions (Previous year Rs. 29.48 millions) and Note 20 includes R&D expenses of Rs. 20.96 millions (Previous year Rs. 16.34 millions).

3. The Company entered into a joint venture agreement for the development of the township at Batanagar with Riverbank Developers Private Limited (RDPL) in earlier years. In April 2010, while retaining the legal title over the land at Batanagar Project and shares in the erstwhile Joint Venture Company (RDPL), the Company restructured its agreements with revised terms and conditions for the development of the modern integrated township project at Batanagar.

As per the order of the Government of West Bengal (GOWB), the total obligation on the Company towards development of employee housing colony was Rs. 650.00 millions, the Company had recorded a liability of Rs. 216.24 millions for obligation yet to be fulfilled towards the balance 325,000 square feet of employee housing colony in earlier years (also refer note 31 (b) & (c) ). As per the above-mentioned agreement, any liability arising on account of non-compliance of terms and conditions of GOWB order will be borne by the erstwhile JV Company.

During the year, the Company has signed an addendum to the development agreement whereby the Company will now receive constructed area of 332,030 square feet against 325,000 square feet from RDPL.

The Company alongwith RDPL approached the GOWB for extension of the time limit, which has been principally agreed by GOWB and the revised order is awaited. The Company does not expect any variation from principally agreed terms and conditions and consequently no impact on the financial statements.

4. LEASES

Assets Taken on Operating Lease

a) The Company has taken various residential, office, warehouse and shop premises under operating lease agreements. The lease agreements generally have an escalation clause and there are no subleases. These leases are generally not non-cancellable and are renewable by mutual consent on mutually agreed terms. There are no restrictions imposed by lease agreements.

b) The aggregate lease rentals payables are charged as ''Rent'' in Note 20.

5. SEGMENT REPORTING

The Company operates in two segments - Footwear & Accessories and Surplus Property Development. The Company has chosen business segments as its primary segments considering the dominant source and nature of risks and returns and the internal organisation and management structure.

A description of the types of products and services provided by each reportable segment is as follows:

Footwear & Accessories: The Segment is engaged in the business of manufacturing and trading of footwear and accessories items through its retail and wholesale network.

Surplus Property Development : The segment is involved in development of surplus property at Batanagar.

6. CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF:

a) Claims against Company not acknowledged as debts includes

Nature 2013 2012 (Rs. millions) (Rs. millions)

Excise and Customs Cases 148.40 158.74

Sales Tax Cases 21.80 34.20

Others* 211.50 279.68

Income Tax Cases** 291.87 -

Total 673.57 472.62

* Others include individually small cases pertaining to rent, labor etc.

** During earlier years, the Assessing Officer had revised the computation of Capital Gains on "Transfer of Development Rights to RHPL" in the year 2007 by treating it as Short Term instead of the Long Term and thus raised a demand of Rs. 230.55 millions on the Company. The Company during the previous year had received favorable judgment from the ITAT Kolkata. However Income Tax Department had filed an appeal with the High Court against the said order.

During the year, the Company has received an order of Commissioner of Income Tax under section 263 of the Income Tax Act, 1961 directing the Assessing Officer for re-computation of consideration adopted by Company for computation of long term capital gain for A.Y. 2007-08 on transfer of development rights of Batanagar land to River Bank Holding Private Ltd. (erstwhile JV company). The amount of tax liability is not mentioned in the order. The Company has filed an appeal to Income Tax Appellate Tribunal against the said order. The Company on the basis of consultant''s advice believes that it has a good case and hence no provision there against is considered necessary. As per the agreement, liability of income tax on such transfer, if any, will be borne by the erstwhile JV company.

On the basis of current status of individual cases and as per legal advice obtained by the Company wherever applicable, the Company is confident that no provision is required in respect of these cases at this point in time.

b) Future obligations imposed by the Govt. of West Bengal in respect of property project are Rs.28.53 millions (Previous year: Rs. 42.13 millions).

c) The erstwhile JV company will fulfill the obligation of development of 88 acres (Previous Year: 88 acres) of land for social and economic purposes as per conditions imposed on the Company by Government of West Bengal. The transaction value is not ascertainable at this point of time. Company has taken bank guarantee from RDPL of Rs. 240.00 millions (Previous year: Rs 240.00 millions).

7. Estimated amount of contracts remaining to be executed for capital expenditure and not provided for amounted to Rs.169.01 millions (Previous year: Rs. 83.51 millions).

8. (a) Gratuity and other post-employment benefit plans:

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at the rate of 15 days salary (last drawn salary) for each completed year of service. The scheme is funded through the companies own trust.

The Company has also provided long term compensated absences which are unfunded.

The following tables summarize the components of net benefit expense recognized in the Statement of profit and loss and the funded status and amounts recognized in the balance sheet for the defined benefit gratuity plan.

(b) Provident Fund

The Provident Fund (where administered by a Trust) is a defined benefit scheme where by the Company deposits as amount determined as a fixed percentage of basic pay to the fund every month. The benefit vests upon commencement of employment. The interest credited to the accounts of the employees is adjusted on an annual basis to confirm to the interest rate declared by the government for the Employees Provident Fund. As per the Actuarial Society of India guidance note (GN21) for measurement of provident fund liabilities, the actuary has accordingly provided a valuation and based on the below provided assumptions, there is no shortfall as at 31st December, 2013.

9. Previous year''s figures have been regrouped/reclassified, wherever necessary, to conform to this year''s classification.

Dec 31, 2012

1. CORPORATE INFORMATION

Bata India Limited is a public company domiciled in India and incorporated under the provisions of The Indian Companies Act, 1913. Its shares are listed on Stock exchanges in India. Bata India Limited is primarily engaged in the business of manufacturing and trading of footwear and accessories through its retail and wholesale network.

2. BASIS OF PREPARATION

The financial statements have been prepared to comply in all material respects with the Accounting Standard notified by Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis except in case of assets for which provision for impairment is made and revaluation is carried out.

The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year, except for the change in the accounting policy explained below.

a. Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs.10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year, the amount of per share dividend recognized as distributions to equity shareholders was Rs.6 (Previous year: Rs.6).

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Provision for warranties

The warranty claim provision covers the expenses relating to the repairing / cost of shoes sold. Liability in respect of warranties is provided on the basis of valuation carried out by an independent actuary as at year end. It is expected that cost will be incurred over the warranty period as per the warranty terms.

The Company sets up and maintains provision for trade related and other litigations or disputes when a reasonable estimate can be made. The amounts of provisions are based upon estimates provided by the Company''s legal department which are revisited on a timely basis. The exact timing of the settlement of the litigations and consequently, the outflow is uncertain.

In view of large number of labour cases and other civil cases, it is not practicable to disclose the details of each case separately. The exact timing of the settlement of the litigation and consequently, the outflow is uncertain.

* Excise duty on sales amounting to Rs. 293.01 million (Previous year: Rs. 225.43 million) has been reduced from sales in statement of profit & loss and differential excise duty on opening and closing stock of manufactured finished goods amounting to Rs. 44.80 million [Previous Year: Rs. 19.47 million] has been adjusted from (increase)/decrease in inventories in Note 18.

3. Note 19 includes R&D expenses of Rs.29.48 million (Previous year Rs.30.63 million) and Note 20 includes R&D expenses of Rs. 16.34 million (Previous year Rs.19.53 million).

4. InApril 2010, while retaining the legal title over the land at Batanagar Project and shares in the erstwhile Joint Venture Company, Riverbank Developers Private Limited (RDPL), the Company restructured its agreements with revised terms and conditions for the development of the modern integrated township project at Batanagar.

Since conditions precedent to recognizing sale of investment and variation of development rights in the Immovable Property were satisfied in March 2011, gains of Rs. 994.85 million on disposal of Immovable Property and Rs.98.70 million on disposal of investment in shares of erstwhile JV Co before tax arising on the said transaction were recognized under Other Income in the previous year financial statements.

As per the order of the Government of West Bengal, the total obligation on the Company towards development of employee housing colony was Rs.650.00 million, the Company has recorded a liability of Rs.216.24 million for obligation yet to be fulfilled.

Pursuant to the restructuring of these agreements as described above, RDPL ceased to be a jointly controlled entity as at the previous year end.

Further as a part of the consideration, the Company is yet to receive from RDPL, approximately 325,000 square feet of constructed space as per the terms of the revised agreements.

During F.Y-2012 as per the terms of agreement, the Company should have been given possession of certain constructed space from RDPL but is yet to be given possession (date being extended) & hence it has not been capitalized in books of account.

5. LEASES

Assets Taken on Operating Lease

a) The Company has taken various residential, office, warehouse and shop premises under operating lease agreements. The lease agreements generally have an escalation clause and there are no subleases. These leases are generally not non-cancellable and are renewable by mutual consent on mutually agreed terms. There are no restrictions imposed by lease agreements.

b) The aggregate lease rentals payables are charged as ''Rent'' in Note 20.

6. SEGMENT REPORTING

The Company operates in two segments - Footwear & Accessories and Surplus Property Development. The Company has chosen business segments as its primary segments considering the dominant source and nature of risks and returns and the internal organisation and management structure.

A description of the types of products and services provided by each reportable segment is as follows:

Footwear & Accessories: The Segment is engaged in the business of manufacturing and trading of footwear and accessories items through its retail and wholesale network.

Surplus Property Development : The segment is involved in development of surplus property at Batanagar.

vii. Transaction with erstwhile Joint Venture Company (a JV Company till March 31, 2011):

Details of transaction with erstwhile Joint Venture Company which are material (more than 10% of the total transaction with the Related Parties) :

The erstwhile JV Company will also fulfil the obligation of development of 88 acres (Previous Year: 88 acres) of land for social and economic purposes as per the conditions imposed on the Company by Government of West Bengal. The transaction value is not ascertainable at this point of time. The above obligation is partly covered by Bank Guarantee taken from Riverbank Developers Private Limited of Rs.240 million (Previous year Rs. 240 million).

viii. Transaction with Subsidiaries :

Details of transaction with Subsidiaries which are material (more than 10% of the total transaction with the Related Parties) :

* As the liabilities for gratuity and leave encashment are provided on an actuarial basis for the company as a whole, the amounts pertaining to the directors are not included above.

* Others include individually small cases pertaining to rent, labour etc.

** During the earlier years, the Assessing Officer had revised the computation of Capital Gains on "Transfer of Development Rights to RHPL" in the year 2007 by treating it as Short Term instead of the Long Term and thus raised a demand of Rs. 230.55 million on the Company. The Company during the previous year had received favourable order from the CIT (Appeal). However, Income Tax Department had filed an appeal with the Appellate Tribunal (ITAT) against the said order. The Company during the current year has received favourable order from the ITAT Kolkata.

On the basis of current status of individual cases and as per legal advice obtained by the Company wherever applicable, the Company is confident that no provision is required in respect of these cases at this point in time.

- Future obligations imposed by the Govt of West Bengal in respect of property project are Rs.42.13 million (Previous year: Rs. 58.86 million).

- The erstwhile JV company will fulfil the obligation of development of 88 acres (Previous Year: 88 acres) of land for social and economic purposes as per conditions imposed on the Company by Government of West Bengal. The transaction value is not ascertainable at this point of time.

7. Estimated amount of contracts remaining to be executed for capital expenditure and not provided for (net of advances) amounted to Rs.83.51 million (Previous year: Rs.62.21 million).

8. (a) Gratuity and other post-employment benefit plans:

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at the rate of 15 days salary (last drawn salary) for each completed year of service. The scheme is funded through the companies own trust.

The Company has also provided long term compensated absences which are unfunded.

The following tables summarize the components of net benefit expense recognized in the Statement of profit and loss and the funded status and amounts recognized in the balance sheet for the defined benefit gratuity plan.

The Defined benefit obligation amounting to Rs. 360.44 million is funded by assets amounting to Rs.397.61 million and Company has contributed Rs. 37.17 million excess during the year 2012. The company expects to contribute Rs.20 million (Previous Year Rs.50.00 million) during the year 2013.

The estimates of future salary increases have been considered in actuarial valuation based on inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

(b) Provident Fund

The Provident Fund (where administered by a Trust) is a defined benefit scheme where by the Company deposits as amount determined as a fixed percentage of basic pay to the fund every month. The benefit vests upon commencement of employment. The interest credited to the accounts of the employees is adjusted on an annual basis to confirm to the interest rate declared by the government for the Employees Provident Fund. As per the Actuarial Society of India guidance note (GN21) for measurement of provident fund liabilities, the actuary has accordingly provided a valuation and based on the below provided assumptions, there is no shortfall as at 31st December, 2012.

9. Till the year ended 31st December 2011, the Company was using pre-revised Schedule-VI to the Companies Act 1956, for preparation and presentation of its financial statements. During the year ended 31st December 2012 the revised Schedule-VI notified under the Companies Act 1956, has become applicable to the Company. The Company has reclassified previous year figure to conform to this year''s classification. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it significantly impacts presentation and disclosures made in the financial statements, particularly presentation of Balance Sheet.

Dec 31, 2011

1. NATURE OF OPERATION

Bata India Limited is primarily engaged in the business of manufacturing and trading of footwear and accessories through its retail and wholesale network.

2. In April 2010, while retaining the legal title over the land at Batanagar Project and shares in the Joint Venture Company, Riverbank Developers Private Limited (RDPL), the Company restructured its agreements with revised terms and conditions for the development of the modern integrated township project at Batanagar.

a) The Company has disposed off its stake in RDPL by transferring the shares of RDPL in a trust, the beneficial ownership of which vests with the buyer of such shares. The Company earned a gain of Rs.98,700 thousand, on such transfer.

b) (i) The Company has received a lumpsum Rs.900,000 thousand for variation of the development rights out of which Rs.700,000 thousand was received in April 2010 and the balance has been received during current year.

(ii) In addition, the Company has received approximately 315,000 square feet of employee housing colony from RDPL. Accordingly, the Company has recorded a gain of Rs.433,759 thousand which represents the cost to RDPL for constructing such colony.

(iii) Since as per the order of the Government of West Bengal, the total obligation on the Company towards development of employee housing colony was Rs. 650,000 thousand, the Company has recorded a contingent liability of Rs.216,241thousand for obligation yet to be fulfilled. Further as a part of the consideration, the Company is yet to receive from RDPL, approximately 325,000 square feet of constructed space as per the terms of the revised agreements.

Pursuant to the restructuring of these agreements as described above, RDPL ceases to be a jointly controlled entity with effect from April 1, 2011.

3. Cash Credit facilities & Working Capital Demand Loans with Banks are secured by hypothecation of stock of raw materials, work-in-progress, finished goods, stores and spare parts, book debts and other current assets.

4. Leases

Assets Taken on Operating Lease

a) The Company has taken various residential, office, warehouse and shop premises under operating lease agreements. The lease agreements generally have an escalation clause and there are no subleases. These leases are generally not non-cancellable and are renewable by mutual consent on mutually agreed terms. There are no restrictions imposed by lease agreements.

b) The aggregate lease rentals amounting to Rs. 1,454,771 thousands (Previous year Rs. 1,156,649 thousands) (including impact of Straight Lining of Lease Rent) are charged as 'Rent' in Schedule 18.

The future minimum lease payments under non-cancellable operating leases: Rs. Nil (Previous Year: Rs. Nil).

5. Expenditure incurred on Voluntary Retirement Scheme

The Company had incurred Rs. Nil (Previous Year: Rs.9,270 thousands) on account of voluntary retirement scheme which is grouped under salaries, wages and bonus in Schedule 18.

6 Segment Reporting

The Company operates in two segments - Footwear & Accessories and Surplus Property Development. The Company has chosen business segments as its primary segments considering the dominant source and nature of risks and returns and the internal organisation and management structure.

A description of the types of products and services provided by each reportable segment is as follows: Footwear & Accessories: The Segment is engaged in the business of manufacturing and trading of footwear and accessories items through its retail and wholesale network.

7. Contingent Liabilities not provided for in respect of:

- Claims against Company not acknowledged as debts includes

Nature 2011 (Rs.'000s) 2010 (Rs.'000s)

Excise and Customs Cases 154,400 163,220

Sales Tax Cases 34,200 34,200

Others* 226,599 217,790

Income Tax Cases** 230,552 230,552

Total 645,751 645,762

* Others include individually small cases pertaining to rent, labour etc.

** During the previous year, the assessing Officer had revised the computation of Capital Gains on "Transfer of Development Rights to RHPL" in the year 2007 by treating it as Short Term instead of the Long Term and thus raised a demand of Rs. 230,552 thousands on the Company. The Company during the current year has received favourable order from the CIT (Appeal). However, Income Tax Department has filed an appeal with the Appellate Tribunal (ITAT) against the said order.

Further, as per the Joint Development Agreement entered in December 2006, liability of Income Tax on such transfer, if any, will be borne by JV Company.

On the basis of current status of individual cases and as per legal advice obtained by the Company, wherever applicable, the Company is confident that no provision is required in respect of these cases at this point in time.

- Future obligations imposed by the Govt. of West Bengal in respect of property project are Rs. 58,864 thousands (Previous Year Rs. 731,802 thousands).

- The erstwhile JV company will fulfil the obligation of development of 88 acres (Previous Year: 56 acres) of land for social and economic purposes as per conditions imposed on the Company by Government of West Bengal. The transaction value is not ascertainable at this point of time. The above obligation is partly covered by Bank Guarantee taken from Riverbank Developers Private Limited of Rs.240,000 thousands (Previous Year Rs.240,000 thousands).

8. 21,230 (Previous Year: 21,230) equity shares of Rs. 10 each were held in abeyance on account of pending adjudication of the shareholders' right to receive those shares / inability of depository to establish ownership rights.

9. Estimated amount of contracts remaining to be executed for capital expenditure and not provided for amounted to Rs.62,209 thousands (Previous Year: Rs.79,555 thousands).

The Company sets up and maintains provision for trade related and other litigations or disputes when a reasonable estimate can be made. The amounts of provisions are based upon estimates provided by the Company's legal department which are revisited on a timely basis. The exact timing of the settlement of the litigations and consequently, the outflow is uncertain.

(i) In view of large number of labour cases and other civil cases, it is not practicable to disclose the details of each case separately. The exact timing of the settlement of the litigation and consequently, the outflow is uncertain.

10. Gratuity and other post-employment benefit plans:

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at the rate of 15 days salary (last drawn salary) for each completed year of service. The scheme is funded through the companies own trust.

The Company has also provided long term compensated absences which are unfunded.

The following tables summarise the components of net benefit expense recognised in the profit and loss account and the funded status and amounts recognized in the balance sheet for the respective plans.

11. Manufacturing, Distribution, Selling and Administration expenses (Schedule 18) include Research & Development Expenses of Rs.50,166 thousands (Previous Year: Rs. 49,257 thousands).

** Refer Note no. 3 of Schedule 21.

*** Till March 31, 2011

12. In accordance with "Explanation below Para 10 of Notified AS 9", excise duty on turnover amounting to Rs. 225,426 thousands (Previous Year: Rs. 188,945 thousands) has been reduced from turnover in profit & loss account and differential excise duty on opening and closing stock of manufactured finished goods amounting to Rs. (19,466) thousands [Previous Year: Rs. (6,094) thousands] has been adjusted from Cost of Goods Sold in Schedule -17.

13. Previous Year figures have been regrouped, where necessary, to conform to current year's classification.

Dec 31, 2010

1. While retaining the legal title over the land at Batanagar Project and shares in the Joint Venture Company, Riverbank Developers Private Limited (RDPL), Bata India Limited has restructured its agreements with revised terms and conditions for the development of the modern integrated township project at Batanagar. In consideration of the restructured agreement, the Company shall receive an aggregate amount of Rs.1,000,000 thousands for future transfer of shares in the JV Company and variation of the development rights. The Company had already received Rs.700,000 thousand for variation of Development right and Rs.100,000 thousand for future transfer of Shares in JV Company. In addition, the Company will also receive 640,000 sq feet of constructed space free of cost in the project over a defined period of time. These agreements have been entered on 28th April 2010.

Since conditions precedent to recognizing sale of investment and variation of rights in the joint development agreement have not crystallized till the year end, hence the Company has not recognized any gains on account of these new agreements.

2. (a) Cash Credit facilities & Working Capital Demand Loans with Banks are secured by hypothecation of stock of raw materials, work-in- progress, finished goods, stores and spare parts, book debts and other current assets. (b) During the year, the Company has mortgaged its investment in immovable property to a body corporate for disbursement of term loan and non fund based limit in favour of the Joint Venture Company.

3. Leases

Assets Taken on Operating Lease

a) The Company has taken various residential, office, warehouse and shop premises under operating lease agreements. The lease agreements generally have an escalation clause and there are no subleases. These leases are generally not non-cancellable and are renewable by mutual consent on mutually agreed terms. There are no restrictions imposed by lease agreements.

b) The aggregate lease rentals payables are charged as Rent in Schedule 18.

The future minimum lease payments under non-cancellable operating leases: Rs. Nil (Previous Year: Rs. Nil).

4. Expenditure Incurred on Voluntary Retirement Scheme

During the year, the Company has incurred Rs.9,270 thousands (Previous Year: Rs. 14,605 thousands) on account of voluntary retirement schemes introduced at its Mokamehghat, Batagunj and Faridabad units and are grouped under Salaries, Wages and Bonus in Schedule 18.

5. B. Related Party Transaction Details i. Sale of Goods:

Details of sales to Fellow Subsidiaries which are material (more than 10% of the total sales to the Related Parties)

vi. Transaction with Subsidiaries :

Details of transaction with Subsidiaries which are material (more than 10% of the total transaction with the Related Parties)

* As the liabilities for gratuity and leave encashment are provided on an actuarial basis for the Company as a whole, the amounts pertaining to the directors are not included above.

6. C. Related Party Disclosure

I. Where Control Exists :

Nature of relationship Name

A. Holding Company : BATA (BN) B.V. The Netherlands, Amsterdam

B. Jointly Control Entity : Riverbank Developers Private Limited

C. Subsidiaries : Bata Properties Ltd. and Coastal Commercial & Exim Limited

II. Where Control Does Not Exists :

Nature of relationship Name

A. Key Management Personnel : Marcelo Villagran Ã Managing Director Shaibal Sinha Ã Director Finance upto 07.09.2010 Fadzilah Mohd. Hussein Director Finance w.e.f. 01.10.2010

B. Fellow Subsidiaries with whom transactions have taken place during the year :

Company Name Company Name

Compar S.P.A. Bata Industrial Europe

Bata Shoe Singapore Pte. Ltd. Compass Limited

Global Footwear Services Pte. Ltd. Bata Shoe Co. (Bangladesh) Ltd.

Bata Malaysia SDN. BHD. Bata Shoe Co. of Ceylon Ltd.

P.T. Sepatu Bata Tbk Shoe Innovation Centre Europe Srl

Bala Limited Bata Shoe of Thailand Public

Bata Brands S.A.R.L. Bata Chile S.A.

7 Segment Reporting

The Company operates in two segments - Footwear & Accessories and Investment in Joint Venture for Surplus Property Development. The Company has chosen business segments as its primary segments considering the dominant source and nature of risks and returns and the internal organisation and management structure.

A description of the types of products and services provided by each reportable segment is as follows:

Footwear & Accessories: The Segment is engaged in the business of manufacturing and trading of footwear and accessories items through its retail and wholesale network.

Investment in Joint Venture for Surplus Property Development : The segment is involved in development of real estate at Batanagar.

B INFORMATION ABOUT SECONDARY SEGMENTS

b) The Company has common fixed assets for producing goods for Domestic Market and Overseas Market. Hence, separate figures for fixed assets / additions to fixed assets cannot be furnished.

8. Contingent Liabilities not provided for in respect of:

- Claims against Company not acknowledged as debts includes

Nature 2010 (Rs.000s) 2009 (Rs.000s)

Excise and Customs cases 163,220 190,140

Sales Tax Cases 34,200 34,200

Others* 217,790 174,798

Income Tax Cases** 230,552 -

Total 645,762 399,138

* Others include individually small cases pertaining to rent labour etc

** During the assessment proceedings, the assessing Officer has revised the computation of Capital Gains on "Transfer of Development Rights to RHPL" in the year 2007 by treating it as Short Term instead of the Long Term and thus raised a demand of Rs. 230,552 thousands on the Company. However as per the Joint Development Agreement entered in December 2006, liability of Income Tax on such transfer, if any, will be borne by JV Company. On the basis of current status of individual cases and as per legal advice obtained by the Company, wherever applicable, the Company is confident that no provision is required in respect of these cases at this point in time. - Future obligations imposed by the Govt of West Bengal in respect of property project are Rs.731,802 thousands (Previous Year Rs. 739,985 thousands).

The JV company will fulfil the obligation of development of 56 acres (Previous Year: 88 acres) of land for social and economic purposes as per conditions imposed on the Company by Government of West Bengal. The transaction value is not ascertainable at this point of time.

9. 21,230 (Previous Year: 21,230) equity shares of Rs. 10 each were held in abeyance on account of pending adjudication of the shareholders right to receive those shares / inability of depository to establish ownership rights.

10. Estimated amount of contracts remaining to be executed for capital expenditure and not provided for amounted to Rs. 79,555 thousands (Previous Year: Rs. 109,176 thousands).

11. a) The movement of provision for warranty claims is as follows:

The warranty claim provision covers the expenses relating to the repairing / cost of shoes sold which are covered by a warranty period of 60 days from the date of sale. Liability in respect of warranties is provided on the basis of valuation carried out by an independent actuary as at year end. It is expected that cost will be incurred over the warranty period as per warranty terms.

b) The breakup and movement of provision for contingencies are as follows: (Amount in Rs. Ã000s)

The Company sets up and maintains provision for trade related and other litigations or disputes when a reasonable estimate can be made. The amounts of provisions are based upon estimates provided by the Companys legal department which are revisited on a timely basis. The exact timing of the settlement of the litigations and consequently, the outflow is uncertain.

(i) In view of large number of labour cases and other civil cases, it is not practicable to disclose the details of each case separately. The exact timing of the settlement of the litigation and consequently, the outflow is uncertain.

17. Gratuity and other post-employment benefit plans:

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at the rate of 15 days salary (last drawn salary) for each completed year of service. The scheme is funded through the companies own trust.

The Company has also provided long term compensated absences which are unfunded.

The following tables summarise the components of net benefit expense recognised in the profit and loss account and the funded status and amounts recognized in the balance sheet for the respective plans.

Profit and Loss account

Net employee benefit expense (recognised in Contribution to Gratuity, Pension & Provident Funds)

The Defined benefit obligation amounting to Rs. 346,551 thousands is funded by assets amounting to Rs.352,181 thousands and company has contributed Rs. 5,630 thousands excess during the year 2010. The Company expects to contribute Rs. 60,000 thousands during the year 2011.

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

The estimates of future salary increases have been considered in actuarial valuation based on inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

18. Manufacturing, Distribution, Selling and Administration expenses (Schedule 18) include Research & Development Expenses of Rs. 49,257 thousands (Previous Year: Rs. 33,877 thousands).

19. As per the requirements of Accounting Standard (AS-27) "Financial Reporting of Interest in Joint Ventures", the Companys interest in the Joint Venture Companies is as follows:

Name of the Company:- Riverbank Developers Private Limited

Nature:- Jointly Controlled Entity

Nature of Business:- Development of Real Estate

Country of Incorporation:- India

(%) of Holding as on December 31, 2010 :- 50

Additionally, there is a contingent liability relating to Stamp duty in the Joint venture Company as at December 31, 2010, which is not ascertainable.

During the previous year, one of the contractor had filed compensation claim on the JV Company and a counter claim has also been filed by the JV Company. The management is of the views that claim filed by the Contractor is not tenable as per law and accordingly, no adjustments, if any, arising out of such claim or counter claim had been made in financials of JV Company.

20. In accordance with "Explanation below Para 10 of Notified AS 9", excise duty on turnover amounting to Rs. 188,945 thousands (Previous Year: Rs. 209,365 thousands) has been reduced from turnover in profit & loss account and differential excise duty on opening and closing stock of manufactured finished goods amounting to Rs. (6,094) thousands [Previous Year: Rs. 42,991 thousands] has been adjusted from Cost of Goods Sold in Schedule -17.

21 Previous Year figures have been regrouped or reclassified, where necessary, to conform to current years classification.

Dec 31, 2009

1. Cash Credit facilities & Working Capital Demand Loans with Banks are secured by hypothecation of stock of raw materials, work-in-progress, finished goods, stores and spare parts, book debts and other current assets.

2. Leases

Assets Taken on Operating Lease

a) The Company has taken various residential, office, warehouse and shop premises under operating lease agreements. The lease agreements have an escalation clause and there are no subleases. These leases are generally not non-cancellable and are renewable by mutual consent on mutually agreed terms. There are no restrictions imposed by any lease agreements.

b) The aggregate lease rentals payables are charged as Rent in Schedule 18.

The future minimum lease payments under non-cancellable operating leases: Rs. Nil (Previous Year: Rs. Nil).

3. Expenditure Incurred on Voluntary Retirement Scheme

During the year, the Company has incurred Rs. 14,605 thousands (Previous Year: Rs. 94,288 thousands) on account of voluntary retirement schemes introduced at its Bataguni and Faridabad units.

i. Transaction with Subsidiaries :

Details of transaction with Subsidiaries which are material (more than 10% of the total transaction with the Related Parties) -

4 Segment Reporting

The Company operates in two segments - Footwear & Accessories and Investment in Joint Venture for Surplus Property Development. The Company has chosen business segments as its primary segments considering the dominant source and nature of risks and returns and the internal organisation and management structure.

A description of the types of products and services provided by each reportable segment is as follows:

Footwear & Accessories: The Segment is engaged in the business of manufacturing and trading of footwear and accessories items through its retail and wholesale network.

Investment in Joint Venture for Surplus Property Development: The segment is involved in development of real estate at Batanagar.

5. Contingent Liabilities not provided for in respect of:

- Claims against Company not acknowledged as debts includes

Nature 2009 (Rs.000s) 2008 (Rs.000s)

Excise and Customs Cases 190,140 227,200

Sales Tax Cases 34,200 37,100

Others* 174,798 188,541

Total 399,138 452,841

Others include individually small cases pertaining to rent labour etc

On the basis of current status of individual cases and as per legal advice obtained by the Company, wherever applicable, the Company is confident that no provision is required in respect of these cases at this point in time.

- Future obligations imposed by the Govt of West Bengal in respect of property project are Rs.739,985 thousands (Previous Year Rs. 780,002 thousands).

The JV company will fulfil the obligation of development of 88 acres of land for social and economic purposes as per conditions imposed on the Company by Government of West Bengal. The transaction value is not ascertainable at this point of time.

5. 21,230 (Previous Year: 21,230) equity shares of Rs. 10 each were held irf abeyance on account of pending adjudication of the shareholders right to receive those shares / inability of depository to establish ownership rights. 15. Estimated amount of contracts remaining to be executed for capital expenditure and not provided for amounted to Rs. 109,176 thousands (Previous Year: Rs. 93,320 thousands).

The Company sets up and maintains provision for trade related and other litigations or disputes when a reasonable estimate can be made. The amounts of provisions are based upon estimates provided by the Companys legal department which are revisited on a timely basis. The exact timing of the settlement of the litigations and consequently, the outflow is uncertain.

(i) In view of large number of labour cases and other civil cases, it is not practicable to disclose the details of each case separately. The exact timing of the settlement of the litigation and consequently, the outflow is uncertain.

6. Gratuity and other post-employment benefit plans:

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at the rate of 15 days salary (last drawn salary) for each completed year of service. The scheme is funded through the companies own trust.

The Company has also provided long term compensated absences which are unfunded.

The following tables summarise the components of net benefit expense recognised in the profit and loss account and the funded status and amounts recognized in the balance sheet for the respective plans.

7. Manufacturing, Distribution, Selling and Administration expenses (Schedule 18) includes R&D Expenses of Rs. 33,877 thousands (Previous Year: Rs. 30,974 thousands).

8. In accordance with "Explanation below Para 10 of Notified AS 9", excise duty on turnover amounting to Rs. 209,365 thousands (Previous Year: Rs. 253,843 thousands) has been reduced from turnover in profit & loss account and differential excise duty on opening and closing stock of manufactured finished goods amounting to Rs. 42,991 thousands [Previous Year: Rs. 25,229 thousands] has been adjusted from Cost of Goods Sold in Schedule -17.

9 Previous Year figures have been regrouped, where necessary to conform to current years classification.

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