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Bata India

BSE: 500043|NSE: BATAINDIA|ISIN: INE176A01028|SECTOR: Leather Products
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Directors Report Year End : Mar '17    Mar 16

TO THE MEMBERS

The Directors are pleased to present the 84th Annual Report covering the operational and financial performance of your Company along with the Audited Financial Statements for the financial year ended March 31,2017.

FINANCIAL HIGHLIGHTS

(Rs. in Million)

Particulars

Year ended on March 31, 2017

Year ended on March 31, 2016

(Audited)

(Audited)

Revenue from operations

24,972.41

24,485.97

Other Income

466.46

267.18

Total

25,438.87

24,753.15

Profit / (Loss) before Exceptional items and Taxation

2,552.44

2,219.42

Exceptional items- Income / (Loss)

(216.69)

747.07

Profit / (Loss) before Taxation

2,335.75

2,966.49

Provision for Taxation

748.27

790.54

Net Profit

1,587.48

2,175.95

Other Comprehensive lncome/(Loss) (net of tax)

14.10

11.56

Total Comprehensive Income

1,573.38

2,164.39

Your Company has prepared the Financial Statements for the financial year ended March 31, 2017 under Section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015 and has recast the Financial Statements relating to the previous financial year ended March 31, 2016 in order to make them comparable.

During the financial year ended March 31, 2017, your Company recorded a turnover of Rs.24,972.4 Million as compared to the turnover of Rs.24,485.9 Million recorded during the previous financial year ended March 31, 2016. The Net Profit of your Company for the financial year ended March 31, 2017 stood at Rs.1,587.5 Million as against the Net Profit of Rs.2,175.9 Million for the financial year ended March 31, 2016. However, the Net Profit for the financial year ended March 31, 2017 included one-time Exceptional expense of Rs.216.7 Million, whereas, the Net Profit for the financial year ended March 31, 2016 included one-time Exceptional income of Rs.747.1 Million. Accordingly, the Profit before Exceptional Items and Tax for the financial year ended March 31,2017 reflects a growth of 15% over the corresponding Profit for the financial year ended March 31, 2016. Details of the Exceptional Items for both the aforesaid financial years have been mentioned in Note No.26 of the Notes to the Financial Statements in this Annual Report.

On a consolidated basis, your Company recorded a turnover of Rs.25,043.4 Million during the financial year ended March 31, 2017 and achieved consolidated Net Profits of Rs.1,589.5 Million for the said financial year.

Your Company has been the leading footwear brand of choice for its style, comfort and quality at affordable price. During the year under review, your Company endeavored to maintain the stature with an added focus to tap the fashion conscious youth, working women and children through introduction of newer and trendier styles of footwear and has also launched premium collections of footwear for men and women. Over the past couple of years there have been considerable changes in customers’ shopping preferences. Technological advancements and availability of smart phones have resulted in exponential growth of online businesses, especially in retail segment. Your Company’s e-commerce website had witnessed a great response as it caters to evolving shopping habits of the consumers who look for ease and convenience. Your Company being the market leader in the organized footwear sector over the past several decades always endeavors to meet the expectations of its stakeholders and takes all steps possible to enhance the Bata brand value.

SHARE CAPITAL

The Authorized Share Capital of your Company as on March 31, 2017 stands at Rs. 700,000,000/- divided into 140,000,000 equity shares of Rs. 5/- each. The Issued Share Capital of your Company is Rs. 642,850,000/- divided into 128,570,000 equity shares of Rs. 5/- each and the Subscribed and Paid-up Share Capital is Rs. 642,637,700/- divided into 128,527,540 equity shares of Rs. 5/- each, fully paid-up.

DIVIDEND

Your Board has recommended a dividend of Rs.3.50 per share on an Equity Share of Rs. 5/- each (i.e. 70%) for the financial year ended March 31, 2017. The dividend, if declared, by the Members at the forthcoming Annual General Meeting (AGM) shall be paid to the eligible Members of the Company from Friday, July 28, 2017 onwards. The total payout of aforesaid dividend would be approximately Rs.450 Million, excluding the corporate dividend distribution tax, as applicable.

The recommendation of aforesaid dividend is in line with the Dividend Distribution Policy of the Company approved by your Board. The said Dividend Distribution Policy has been uploaded on the website of your Company www.bata.in and is available at the link http://bata.in/0/pdf/DividendDistributionPolicy-BILpdf,

GENERAL RESERVE

The Company has not transferred any amount to the General Reserve during the financial year ended March 31,2017.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN END OF THE FINANCIAL YEAR AND DATE OF REPORT

Subsequent to the end of the financial year on March 31, 2017 till date, there has been no material change and/or commitment which may affect the financial position of the Company.

CREDIT RATING

During the year under review, ICRA Limited (ICRA) has reaffirmed the Credit Rating of ‘[ICRA]AA ’ (pronounced as ICRA double A plus) for the Non-Fund Based Facilities of your Company. The outlook on the Long Term Rating is ‘Stable’.

DEPOSITS

Your Company has no unclaimed / unpaid matured deposit or interest due thereon since December 31, 2013. Your Company has not accepted any deposits covered under ‘Chapter V - Acceptance of Deposits by Companies’ under the Companies Act, 2013during the financial year ended March 31,2017.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

In terms of Section 186 of the Companies Act, 2013 and Rules framed thereunder, details of the Loans given and Investments made by your Company have been disclosed in Note No. 5 of the Notes to Financial Statements for the year ended March 31, 2017, which forms part of this Annual Report. Your Company has not given any guarantee or provided any security during the year under review.

RELATED PARTY TRANSACTIONS

During the financial year ended March 31, 2017, all transactions with the Related Parties as defined under the Companies Act, 2013 read with Rules framed thereunder were in the ‘ordinary course of business’ and ‘at arm’s length’ basis. Your Company does not have a ‘Material Unlisted Subsidiary’ as defined under Regulation 16(1)(c) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 [‘Listing Regulations’]. Your Board shall formulate a Policy to determine Material Unlisted Subsidiary as and when considered appropriate in the future.

During the year under review, your Company did not have any Related Party Transaction which required prior approval of the Members. All Related Party Transactions of your Company had prior approval of the Audit Committee and the Board of Directors. Subsequently, the Audit Committee and the Board have reviewed the Related Party Transactions on quarterly basis. Your Company has an internal mechanism for the purpose of identification and monitoring of Related Party Transactions.

There has been no materially significant Related Party Transactions during the year under review, having potential conflict with the interest of the Company. Necessary disclosures required under the Ind AS-24 have been made in the Note No. 38 of the Notes to the Financial Statements for the year ended March 31, 2017.

SUBSIDIARIES

Your Company has three Subsidiaries. Bata Properties Limited and Way Finders Brands Limited continue to be wholly-owned subsidiaries of your Company, whereas Coastal Commercial & Exim Limited continues to be the step down wholly-owned subsidiary of your Company.

The Annual Reports of these Subsidiaries will be made available for inspection by the Members of the Company at the Registered Office of the respective subsidiary Companies and at the Registered Office of your Company at 27B, Camac Street, 1st Floor, Kolkata - 700016 between 11:00 a.m. and 1:00 p.m. on any working day. Annual Reports along with the Audited Financial Statements of each of the Subsidiaries of your Company are also available on the website of the Company at www.bata.in. The Annual Reports of the abovementioned Subsidiaries for the financial year ended March 31, 2017 shall be provided to the Members of the Company upon receipt of written requests from them.

Pursuant to the provisions of Section 129(3) of the Companies Act, 2013 read with Rule 5 of Companies (Accounts of Companies) Rules, 2014, a statement containing salient features of financial statements of the aforesaid Subsidiaries has been provided in Form No. AOC-1 and included in this Annual Report.

The Audited Consolidated Financial Statements (CFS) of your Company for the financial year ended March 31, 2017, as prepared in compliance with the provisions of Ind AS-27 issued by the Institute of Chartered Accountants of India, are also forming part of this Annual Report.

EXTRACT OF ANNUAL RETURN

The extract of Annual Return in the Form No. MGT-9 as on March 31, 2017 is annexed to this Board’s Report and marked as Annexure I.

AUDIT AND AUDITORS

(i) Change in Auditors

In terms of the provisions of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, M/s. S. R. Batliboi & Co. LLP, Chartered Accountants (ICAI Firm Registration No. 301003-E / E-300005), the Auditors of your Company shall hold office till the conclusion of the ensuing AGM and they shall not be eligible for re-appointment due to expiry of the maximum permissible tenure as the Auditors of your Company. Your Board places on record its deep appreciation for the valuable contributions of the Auditors during their long association since the inception of your Company and wishes them success in the future.

Based on the recommendation of the Audit Committee, your Board at its meeting held on February 9, 2017, appointed M/s. B S R & Co. LLP, Chartered Accountants (ICAI Firm Registration No. 101248-W / W-100022), as the Auditors of the Company, in place of the retiring auditors M/s. S. R. Batliboi & Co. LLP, Chartered Accountants, to hold office from the conclusion of the ensuing 84th AGM until conclusion of the 89th AGM of your Company to be held in the year 2022, subject to approval of the Members of the Company at the ensuing AGM and ratification by the Members of the Company every year thereafter, if required.

Your Company has received a certificate from M/s. BSR & Co. LLP, Chartered Accountants confirming their eligibility to be appointed as Auditors of the Company in terms of the provisions of Section 141 of the Companies Act, 2013 and Rules framed thereunder. They have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India (ICAI) as required under the provisions of Regulation 33 of the Listing Regulations. The proposal for their appointment has been included in the Notice convening the 84th AGM for obtaining approval of the Members of the Company.

(ii) Secretarial Auditor

In terms of the provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Board at its meeting held on February 9, 2017 appointed M/s. P Sarawagi & Associates, Company Secretaries, 27, Brabourne Road, Kolkata - 700001 as the Secretarial Auditors of the Company, to conduct the Secretarial Audit for the financial year ended March 31, 2017 and to submit Secretarial Audit Report in Form No. MR-3.

A copy of the Secretarial Audit Report received from M/s. P Sarawagi & Associates in the prescribed Form No. MR-3 is annexed to this Board’s Report and marked as Annexure II.

(iii) Qualification, reservation or adverse remark in the Auditors’ Reports and Secretarial Audit Report

There is no qualification, reservation or adverse remark made by the Auditors in their Auditors’ Reports to the Financial Statements (Standalone and Consolidated) or by the Secretarial Auditor in their Secretarial Audit Report for the financial year ended March 31, 2017.

SIGNIFICANT AND MATERIAL LITIGATIONS / ORDERS

During the year under review, there were no significant material orders passed by the Regulators / Courts and no litigation was outstanding as on March 31, 2017, which would impact the going concern status and future operations of your Company. The details of litigation on tax matters are disclosed in the Auditors’ Report and Financial Statements which forms part of this Annual Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

In compliance with the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, a statement containing information on conservation of energy, technology absorption, foreign exchange earnings and outgo of the Company, in the prescribed format, is annexed to this Board’s Report and marked as Annexure III.

RESEARCH & DEVELOPMENT ACTIVITIES AND ENERGY CONSERVATION

During the year under review, your Company’s Research & Development activities included technological improvement of the products, introduction of advanced footwear moulds and improvement in manufacturing processes. Such activities resulted in improving the quality of footwear and productivity in manufacturing. Your Company incurred an expenditure of approx. Rs.59.6 Million on Research & Development (including product development initiatives), as against Rs.62 Million spent during the year 2015-16. Your Company has adopted a series of energy conservation measures like replacing conventional tubes with energy efficient LED lights, installation of energy efficient screw compressors, etc. at its Manufacturing Units across India. Such energy saving measures led to a savings of energy cost worth approx. Rs. 7.4 Million during the year under review. Your Company shall continue to invest on Research & Development activities and energy saving measures in its manufacturing units in the future as well. Your Company continued to emphasize on creating a pollution-free and a safe work environment for its employees.

CORPORATE SOCIAL RESPONSIBILITY

Your Board has constituted a Corporate Social Responsibility (CSR) Committee of the Board under the Chairmanship of an Independent Director. A CSR sub-committee comprising of Senior Executives of the Company and a dedicated CSR team undertake and monitor all CSR projects of your Company. Compositions of CSR Committee of your Company and other relevant details have been provided in the Corporate Governance Report which forms part of this Annual Report.

During the year under review, as part of its CSR activities your Company focused on promotion of educational initiatives by supporting the schools near its area of operations. Your Company contributed to the “Prime Minister’s Swachh Bharat Abhiyan” by building toilets and facilities for drinking water and hand wash in the semi urban and rural schools. It also participated in the “Prime Minister’s Skill India campaign” by enhancing employability skills of the underprivileged youth. In addition to such core CSR areas, your Company has always remained sensitive to the underprivileged people of the society and support them in improving their lives with the aim to eradicate poverty, promote preventive healthcare and promote education. Further, your Company also donated shoes to the affected people in areas hit by natural calamities/ disasters and also to the underprivileged children under its campaign “No child should walk barefoot”. Your Company spent over Rs.60 Million, i.e., more than 2% of the average net profits for the past three years, towards various CSR activities during the financial year ended March 31, 2017.

Pursuant to the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Annual Report on CSR Activities has been annexed to this Board’s Report and marked as Annexure IV.

SUPPORT FROM BATA SHOE ORGANIZATION

Your Company continues to receive supports from the Holding Company - Bata (BN) BV., Amsterdam, The Netherlands and also from Bata Shoe Organization (BSO). Your Company also enjoys the benefits of technical research through Global Footwear Services Pte. Ltd., Singapore (GFS). Your Company has renewed the Technical Collaboration Agreement with GFS with effect from January 1, 2011 for a period of ten years. In terms of the said Technical Collaboration Agreement, your Company receives guidance, training of personnel and services from GFS in connection with research & development, marketing, brand development, footwear technology, testing & quality control, store location, layout & design, environment, health & safety, risk & insurance management, etc. Your Company continues to obtain expertise and experience from the personnel of GFS and other BSO group Companies to improve its product range and operational processes throughout the year. In terms of the renewed Agreement as aforesaid, your Company has paid a technical services fee of Rs. 233.5 Million to GFS during the financial year ended March 31, 2017, which is less than 1% of the Turnover of your Company.

BOARD OF DIRECTORS AND BOARD MEETINGS

Your Company’s Board is duly constituted which is in compliance with the requirements of the Companies Act, 2013, the Listing Regulations and provisions of the Articles of Association of the Company. Your Board has been constituted with requisite diversity, wisdom and experience commensurate to the scale of operations of your Company.

During the year under review, a total of five Meetings of your Board of Directors was held, i.e., on May 30, 2016; August 3, 2016; November 25, 2016; December 21, 2016 and February 9, 2017. Details of Board composition and Board Meetings held during the financial year2016-17 have been provided in the Corporate Governance Report which forms part of this Annual Report.

During the year under review there has been no change in the Board of Directors of your Company, which indicates continuity of your Board. At the 83rd AGM your Company held on August 4, 2016, approval of the Members was obtained to the re-appointment of Mr. Rajeev Gopalakrishnan as the Managing Director of your Company and appointment of Mr. Ram Kumar Gupta as the Director Finance, for a period of five years from the date of their respective appointments on your Board. Your Board is of the opinion that continuous association of Mr. Rajeev Gopalakrishnan and Mr. Ram Kumar Gupta with the Board shall be beneficial to your Company and help it achieve its desired business goals. At the aforesaid AGM, the Members also approved the appointment of Mr. Christopher Kirk as a Director of your Company, liable to retire by rotation.

Mr. Shaibal Sinha, Non-Executive Director is due to retire by rotation at the ensuing AGM and being eligible, offers himself for re-appointment. A brief profile along with necessary disclosures of Mr. Shaibal Sinha has been annexed to the Notice convening the ensuing AGM and forms an integral part of this Annual Report. Your Board recommends re-appointment of Mr. Shaibal Sinha as a Director of the Company, liable to retire by rotation.

Mr. Uday Khanna, Mr. Ravindra Dhariwal, Mr. Akshay Chudasama and Ms. Anjali Bansal, Independent Directors of your Company have declared to the Board of Directors that they meet the criteria of Independence as laid down in Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the Listing Regulations and there is no change in their status of Independence. Your Board places on records its deep appreciation for their continuous guidance, support and contribution to the Management of the Company in its pursuit to achieve greater heights.

Mr. Rajeev Gopalakrishnan, Managing Director & Chief Executive Officer, Mr. Ram Kumar Gupta, Director Finance & Chief Financial Officer and Mr. Maloy Kumar Gupta, Company Secretary & Compliance Officer continue to be the Key Managerial Personnel of your Company.

AUDIT COMMITTEE

The Board of Directors of your Company has a duly constituted Audit Committee in terms of the provisions of Section 177 of the Companies Act, 2013 read with the Rules framed thereunder and Regulation 18 of the Listing Regulations. The terms of reference of the Audit Committee has been approved by the Board of Directors. Composition of the Audit Committee, number of meetings held during the year under review, brief terms of reference and other details have been provided in the Corporate Governance Report which forms part of this Annual Report. Recommendations made by the Audit Committee are generally accepted by your Board.

NOMINATION AND REMUNERATION POLICY

Your Board has adopted a Remuneration Policy for identification, selection and appointment of Directors, Key Managerial Personnel (KMPs) and Senior Management Personnel (SMPs) of your Company. The Policy provides for criteria for fixing remuneration ofthe Directors, KMPs, SMPs as well as other employees ofthe Company. The Policy enumerates the powers, roles and responsibilities of the Nomination and Remuneration Committee.

Your Board, on the recommendations of the Nomination and Remuneration Committee, appoints Director(s) of the Company based on his / her eligibility, experience and qualifications and such appointment is approved by the Members of the Company at General Meetings. Generally, the Managing Director and Whole-time Directors (Executive Directors) are appointed for a period of five years. Independent Directors of the Company are appointed to hold their office for a term up to five consecutive years on the Board of your Company. Based on their eligibility for re-appointment, the outcome of their performance evaluation and based on the recommendation by the Nomination and Remuneration Committee, the Independent Directors may be re-appointed by the Board for another term of five consecutive years, subject to approval of the Members of your Company. The Directors, KMPs and SMPs shall retire as per the applicable provisions of the Companies Act, 2013 and the policy of the Company. While determining remuneration of the Directors, KMPs, SMPs and other employees, the Nomination and Remuneration Committee ensures that the level and composition of remuneration are reasonable and sufficient to attract, retain and motivate them and insure the quality required to run the Company successfully, the relationship of remuneration to performance is clear and meets appropriate performance benchmarks and such remuneration comprises a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the Company and its goals. The Company follows a compensation mix of fixed pay, benefits, allowances, perquisites, performance linked incentives and retirement benefits for its Executive Directors, KMPs, SMPs and other employees. Performance Linked Incentive is determined by overall business performance of your Company. Annual increments are decided by the Nomination and Remuneration Committee within the salary scale approved by the Board and Members of the Company. The Company pays remuneration to Independent Directors by way of sitting fees and commission on the net profits of the Company. Non-Executive Directors of your Company do not accept any sitting fees / commission on the net profits from the Company. Remuneration to Directors is paid within the limits as prescribed under the Companies Act, 2013 and the limits as approved by the Members of the Company, from time to time.

The aforesaid Nomination and Remuneration Policy has been uploaded on the website of your Company www.bata.in and is available at the link: http://bata.in/0/pdf/Remuneration-Policy_2015.pdf. Your Company conducts a Board Evaluation process for the Board of Directors as a whole, Board Committees and also for the Directors individually through self-assessment and peer assessment. The details of Board evaluation for the year 2016-17 have been provided in the Corporate Governance Report which forms part of this Annual Report.

DISCLOSURES ON REMUNERATION OF DIRECTORS AND EMPLOYEES OF THE COMPANY

Information as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, and subsequent amendments thereto, is annexed to this Board’s Report and marked as Annexure V.

A statement containing the Information of top ten employees in terms of remuneration drawn and particulars of every employee of the Company, who was in receipt of remuneration not less than the limits specified under Section 197(12) of the Companies Act, 2013 read with Rules 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and subsequent amendments thereto, is annexed to this Board’s Report and marked as Annexure VI.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to provisions of Section 134 of the Companies Act, 2013, the Directors, to the best of their knowledge and belief, hereby confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed;

(b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2017 and of the profit of the Company for that period;

(c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) they have prepared the annual accounts on a going concern basis;

(e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

(f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

WHISTLE BLOWER POLICY / VIGIL MECHANISM

In terms of provisions of Section 177 of the Companies Act, 2013 and Rules framed thereunder read with Regulation 22 of the Listing Regulations, your Company has a vigil mechanism in place for the Directors and Employees of the Company through which genuine concerns regarding various issues relating to inappropriate functioning of the organization can be communicated. For this purpose, your Board has a Whistle Blower Policy and has been uploaded on the website of the Company at www.bata.in and the same is available at the link http://bata.in/0/pdf/Whistle-Blower-Policy,pdf. A Vigil Mechanism Committee under the Chairmanship of the Audit Committee Chairman has been constituted. The Policy provides access to the Head of Legal Department of the Company and to the Chairman of the Audit Committee in certain circumstances.

No person has been denied an opportunity to have access to the Vigil Mechanism Committee including the Audit Committee Chairman. During the year under review, there has been no incidence reported which requires action by the Vigil Mechanism Committee.

POLICY ON PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

Your Company has adopted a Policy under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed thereunder. Your Company is committed to provide a safe and secure environment to its women employees across its functions and other women stakeholders, as they are considered as integral and important part of the Organization.

An Internal Complaints Committee (ICC) with requisite number of representatives has been set up to redress complaints relating to sexual harassment, if any, received from women employees and other women associates. All employees (permanent, contractual, temporary, trainees) are covered under this policy, which also extends to cover all women stakeholders of the Company.

The following is a summary of sexual harassment complaints received and disposed off during the financial year ended March 31, 2017:

- No. of Complaints received : NIL

- No. of Complaints disposed off : Not Applicable

Your Company has been conducting awareness campaign across all its manufacturing units, warehouses, retails stores and office premises to encourage its employees to be more responsible and alert while discharging their duties.

RISK MANAGEMENT AND ADEQUACY OF INTERNAL FINANCIAL CONTROLS

Your Company’s internal financial control ensures that all assets of the Company are safeguarded and protected, proper prevention and detection of frauds and errors and all transactions are authorized, recorded and reported appropriately. Your Company operates through definitive Chart of Authorities (COAs) and Standard Operating Procedures (SOPs) in respect of its operations including financial transactions. Such COAs and SOPs are regularly monitored and if required, modified from time to time depending on business requirements.

Your Company has an adequate system of internal financial controls commensurate with its size and scale of operations which includes policies and procedures pertaining to maintenance of records containing reasonable details, accurate and fair reflections of financial transactions and dispositions of the assets of the Company.

Such practice provides reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with the applicable legislations and that the same are well within the COAs and SOPs, without exception. Your Company also monitors through its Internal Audit Team the requirements of processes in order to prevent or timely detect unauthorized acquisition, use or disposition of the Company’s Assets which could have a material effect on the Financial Statements of the Company.

The Audit Committee of your Board has devised a Risk Management Policy, approved by your Board, which outlines the risk management framework for the functions involved within your Company. As per the said Policy, Risk Management Committee of your Board has been entrusted with the role and responsibilities to formulate, monitor and review risk management plans of your Company.

The Internal Audit Report and Risk Inventory Report are reviewed periodically by the Audit Committee of the Board of Directors. The Chief Internal Auditor is a permanent invitee to the Audit Committee Meetings. The Audit Committee advises on various risk mitigation exercises on a regular basis. Your Company has been maintaining a separate Internal Audit Team headed by the Chief Internal Auditor appointed by the Audit Committee of your Board.

Your Board has also constituted a Risk Management Committee comprising of the Directors and Senior Executives of the Company under the chairmanship of the Managing Director of the Company. The Terms of Reference of the Risk Management Committee and a Risk Management Policy of the Company have also been approved and adopted.

Your Board is of the opinion that the Internal Financial Controls, affecting the Financial Statements of your Company are adequate and are operating effectively.

CORPORATE GOVERNANCE

In compliance with the provisions of Regulation 34 of the Listing Regulations read with Schedule V to the said Regulations, the Corporate Governance Report of your Company for the financial year ended March 31, 2017 and a Certificate from M/s. S. R. Batliboi & Co., LLP, Chartered Accountants, the Statutory Auditors, on compliance with the provisions of Corporate Governance requirements as prescribed under the Listing Regulations, are annexed and forms part of this Annual Report.

BUSINESS RESPONSIBILITY REPORT (BRR)

In compliance with the provisions of Regulation 34(2)(f) of the Listing Regulations read with the SEBI Circular No. CIR/CFD/CMD/10/2015 dated November 4, 2015, your Company has prepared a BRR in the prescribed format for the financial year ended March 31, 2017, describing initiatives undertaken by it from an environment, social and governance perspective in the format as specified by the SEBI which is annexed to the Board’s Report and marked as Annexure VII. The BRR has been uploaded on the website of the Company www.bata.in and is available at the link http://bata.in/bataindia/sc-181_cat-42/investor-relations.html.

ACKNOWLEDGEMENTS

Your Board is grateful for continuous patronage of the valued customers of your Company and for the unstinted support and trust reposed by the dear shareholders and expects continuity of the same in the future. Your Board continues to remain thankful to Bata Shoe Organization (BSO) for their continuous support and guidance.

Your Board wishes to place on record its deep appreciation of the Independent Directors and the Non-Executive Directors of your Company for their immense contribution by way of strategic guidance, sharing of knowledge, experience and wisdom, which help your Company take right decisions in achieving its business goals. Your Board appreciates the relentless efforts of the employees, workmen and staff including the Management Team headed by the Managing Director, who always leads from the front in achieving excellent business performance year-on-year under a challenging business environment.

Your Board acknowledges the support and co-operation received from all regulatory authorities of the Central Government and all State Governments in India. Your Board takes this opportunity to thank all its vendors, suppliers, dealers, banks and other stakeholders as it considers them essential partners in progress.

For and on behalf of the Board of Directors

UDAY KHANNA

Place : Gurgaon Chairman

Date : May 15, 2017 (DIN: 00079129)

Source : Dion Global Solutions Limited
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