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Bata India

BSE: 500043|NSE: BATAINDIA|ISIN: INE176A01028|SECTOR: Leather Products
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Download Annual Report PDF Format 2015 | 2011 | 2010
Directors Report Year End : Mar '16    « Mar 15
The Directors are pleased to present the 83rd Annual Report covering
 the operational and financial performance of your Company along with
 the Audited Financial Statements for the year ended March 31, 2016.
 
 FINANCIAL HIGHLIGHTS
 
                                                       (Rs. in Millions)
 
                                         Fifteen month     Twelve month
                       Year ended on 
 Particulars                           period ended on  period ended on
                       March 31, 2016   March 31, 2015   March 31, 2015
 
                            (Audited)        (Audited)
 *
 
 Gross Turnover             24,512.59        27,375.98        22,318.41
 
 Less: Excise 
 Duty on Turnover              332.05           436.03           329.68
 
 Net Turnover               24,180.54        26,939.95        21,988.73
 
 Other Income                  300.84           432.33           355.79
 
 Total                      24,481.38        27,372.28        22,344.52
 
 Profit/(Loss) before 
 Exceptional item,           2,989.61         3,763.77         3,034.91
 
 Depreciation and 
 Taxation Exceptional 
 item - Income/(Loss)          747.07           315.25           315.25
 
 Profit/(Loss) before 
 Depreciation and 
 Taxation                    3,736.68         4,079.02         3,350.16
 
 Less: Depreciation            752.48           792.34           655.88
 
 Profit / (Loss) before 
 Taxation                    2,984.20         3,286.68         2,694.28
 
 Provision for Taxation:
 
 -Current Tax                  927.51         1,170.24           945.77
 
 -Deferred Tax Charge/ 
 (Credit) (Net)               -130.79          -195.28          -169.17
 
 Net Profit                  2,187.48         2,311.72         1,917.68
 
 Profit available for 
 Appropriation               9,673.37         8,205.76         8,205.76
 
 
 * Based on Limited Review by the Auditors as published in compliance
 with Clause 41 of the erstwhile Listing Agreement with the Stock
 Exchanges.
 
 BUSINESS OPERATIONS
 
 During the financial year ended March 31, 2016, your Company recorded a
 gross turnover of Rs.24,512.6 Million as compared to gross turnover of
 Rs. 27,376.0 Million during the fifteen month period ended March 31,
 2015. The Net Profit of your Company for the financial year ended March
 31, 2016 stood at Rs. 2,187.5 Million as compared to Net Profits of
 Rs.2,311.7 Million for the fifteen month period ended March 31, 2015.
 The Net Profits of your Company for the financial year ended March 31,
 2016 includes Exceptional Income amounting to Rs.747.1 Million (as per
 details mentioned in Note No. 23 of the Notes to Financial Statements
 of the Company attached herewith).
 
 On a consolidation basis, your Company recorded a gross turnover of Rs.
 24,585.7 Million during the financial year ended March 31, 2016 and
 achieved consolidated Net Profits of Rs. 2,185.4 Million for the said
 financial year.
 
 Your Company closed its previous financial year on March 31, 2015
 covering a period of fifteen months as compared to the last financial
 year ended on March 31, 2016 covering a period of twelve months. Since
 the financial performance of your Company for the previous period is
 not comparable, your Board, therefore, considered it prudent to include
 the financial performance for the twelve month period ended March 31,
 2015 for better understanding of year-wise performance, by all the
 stakeholders of your Company.
 
 Your Company''s turnover during the year ended March 31, 2016 recorded a
 growth of approx. 9.8% as compared to the twelve month period ended
 March 31, 2015. The Net Profits during the year ended March 31, 2016
 registered a growth of approx. 14.1% as compared to the Net Profits
 achieved by your Company during the twelve month period ended March 31,
 2015.
 
 As informed in the last Annual Report, your Company had to overcome the
 unexpected challenges in implementation of new supply chain IT system
 which led to disruption and delay in supply of footwear from the
 factories and warehouses to the retail stores during the beginning of
 the financial year 2015-16 impacting the volume of footwear sold and
 also loss of market share. During the year under review, several
 corrective measures have been taken in order to overcome such
 challenges including focus on same store growth, replenishment of stock
 in retail stores based on store requirement/ sales, liquidating
 inventory level through various schemes and also cost reduction
 initiatives. Your Board is happy to inform that the Company is slowly
 re-gaining it''s lost market share and also started registering volume
 growth from the third quarter of the financial year 2015-16.
 
 During the last year we saw considerable changes in the external
 business environment. While commodity prices and inflation were under
 control, the second continuous monsoon failure and resulting drought
 reduced rural demand in several areas of the Country. In addition,
 competition from both foreign and national players continued to be
 aggressive.  In this scenario your Company continued to focus on
 delivering value to the customers.
 
 In order to maintain its leadership position in the organized footwear
 market in India, your Company has been continuously improving its
 collection of various range of footwear across all categories - men,
 women and children.  During the year under review, your Company
 introduced various new designs of footwear which are contemporary
 stylish and also affordable. The retail stores of your Company now
 provide a world class store ambience and delightful shopping experience
 to the customers. Recently, your Company has initiated a new campaign -
 Bata Club, which is a mobile based customer loyalty initiative. The
 Bata Club has approx.6.7 Million memberships and is growing rapidly
 resulting in incremental revenue generation for your Company.
 
 Modernization of the factories and manufacturing processes of your
 Company continued during the year under review.  Various initiatives to
 introduce Six Sigma in Batanagar factory are at different stages of
 implementation. Your Company has also taken various measures to
 introduce eco-friendly manufacturing processes including energy saving
 measures and consumption of minimum natural resources. The
 manufacturing unit of your Company in Batanagar is an ISO 9001 & ISO
 14001 certified Unit. Your Company shall continue to make additional
 investments in its manufacturing units across the Country for
 modernization of infrastructure and manufacturing process in order to
 achieve improved productivity and cater to the emerging customer
 segments.
 
 Your Company has decided to shift its focus from opening new retail
 stores to ensuring same store growth. In order to achieve volume growth
 your Company shall continue its penetration into Tier-2 and Tier-3
 cities and other potential markets based on customer-centric market
 surveys and insights. An appropriate marketing campaign to re-ignite
 growth is also under preparation. Your Company is confident of
 maintaining its leadership position in the organized sector of Indian
 Footwear Industry and shall strengthen its position at the top in the
 years to come.
 
 SHARE CAPITAL AND SUB-DIVISION OF EQUITY SHARES
 
 Pursuant to approval of the Shareholders obtained at the Eighty Second
 Annual General Meeting, your Company has sub-divided the face value of
 its equity shares of Rs. 10/- each, fully paid-up into two equity
 shares of Rs. 5/- each, fully paid-up. The Share Split Committee of
 your Board of Directors had fixed October 8, 2015 as the ''Record Date''
 for the purpose of ascertaining the eligible Shareholders for receiving
 the aforesaid sub-divided equity shares. Subsequent to the aforesaid
 Record Date, new share certificates have been despatched to the
 Shareholders who held shares in physical mode and also credited to the
 respective demat account who held shares in electronic mode.
 
 Accordingly, the Authorized Share Capital of your Company stands
 re-classified at Rs.700,000,000/- divided into 140,000,000 equity
 shares of Rs.5/- each. At present, 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 (i.e., 70%
 on an Equity Share of Rs. 5/- each) for the financial year ended March
 31, 2016, as against Rs.6.50 (i.e., 65% on an Equity Share of Rs. 10/-
 each) for the fifteen month period ended March 31, 2015 paid last year.
 The payment of aforesaid dividend is subject to approval of the Members
 at the forthcoming Annual General Meeting and if declared, shall be
 paid to the eligible Members from August 18, 2016 onwards.
 
 TRANSFER OF UNPAID AND UNCLAIMED DIVIDENDS
 
 During the year under review, the unclaimed / unpaid dividend of
 Rs.6,76,440/- (Rupees Six Lacs Seventy Six Thousand Four Hundred and
 Forty only) pertaining to the dividend for the financial year ended
 December 31, 2007 was transferred to Investor Education and Protection
 Fund (IEPF) of Government of India. The details including last date of
 claiming of unclaimed / unpaid dividend amount are given at the end of
 the Notice convening the Eighty Third Annual General Meeting of the
 Company.
 
 DEPOSITS
 
 Your Company has no unclaimed / unpaid matured deposit or interest
 thereon since December 31, 2013. Presently the Company is not accepting
 any deposits covered under ''Chapter V - Acceptance of deposits by
 Companies'' of the Companies Act, 2013.
 
 CREDIT RATINGS
 
 During the year under review, ICRA Limited (ICRA) has revised the
 Credit Ratings of your Company. ICRA has reaffirmed the Credit Rating
 of ''[ICRAJAA '' (pronounced as ICRA double A plus) for the Non-Fund
 Based Facilities of your Company. The outlook on the Long Term Rating
 is ''Stable''. ICRA has withdrawn the Credit Rating of ''[ICRA]AA ''
 (pronounced as ICRA double A plus) assigned to the Fund Based
 Facilities of your Company, as there is no amount outstanding against
 this instrument. ICRA has also withdrawn the Credit Rating of
 ''[ICRA]A1 '' (pronounced as ICRA A one plus) assigned to the Commercial
 Paper programme of your Company, as the said instrument has not been
 placed by your Company and as such, there is no amount outstanding
 against this instrument.
 
 PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
 
 In terms of Section 186 of the Companies Act, 2013 and Rules framed
 there under, details of the Loans given (Note no.  11) and Investments
 made (Note no. 9) by your Company during the year have been disclosed
 in the Audited Standalone Financial Statements. Your Company has not
 given any guarantee or provided security during the year under review.
 
 RELATED PARTY TRANSACTIONS
 
 During the financial year ended March 31, 2016, your Company''s
 transactions with all the Related Parties as defined under the
 Companies Act, 2013 read with Rules framed there under were in the
 ''ordinary course of business'' and ''at arm''s 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. During the year under review, your
 Company did not have any Related Party Transaction which required prior
 approval of the Shareholders.
 
 All Related Party Transactions are placed before the Audit Committee
 for its prior approval. 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 Accounting Standards (AS-18) have been
 made in the Notes to Financial Statements.
 
 EXTRACT OF ANNUAL RETURN
 
 An extract of Annual Return in Form No. MGT-9 as on March 31, 2016 is
 annexed to this Board''s Report and marked as Annexure I.
 
 AUDITORS
 
 i) Statutory Auditors
 
 The Statutory Auditors of your Company - M/s. S. R. Batliboi & Co. LLP,
 Chartered Accountants, retire at the ensuing Annual General Meeting of
 the Company and have given their consent for re-appointment. Your
 Company has received a certificate from them confirming their
 eligibility to be re-appointed as Auditors of the Company in terms of
 the provisions of Section 141 of the Companies Act, 2013 and Rules
 framed there under. They have also confirmed that they hold a valid
 certificate issued by the Peer Review Board of the Institute of
 Chartered Accountants of India as required under the provisions of
 Regulation 33 of the SEBI (Listing Obligations and Disclosure
 Requirements) Regulations, 2015. The proposal for their re-appointment
 has been included in the Notice convening the Eighty Third Annual
 General Meeting 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, a Secretarial Audit Report in the
 prescribed format, obtained from a Company Secretary in practice, is
 required to be annexed to the Board''s Report. In view thereof, your
 Board at its Meeting held on February 10, 2016 re-appointed M/s. P.
 Sarawagi & Associates, Company Secretaries, 27, Brabourne Road, Kolkata
 - 700001 as the Secretarial Auditors of your Company to conduct the
 Secretarial Audit and to submit Secretarial Audit Report thereon for
 the financial year ended March 31, 2016. The Secretarial Audit Report
 in Form No.  MR-3 is annexed to this Board''s Report and marked as
 Annexure II.
 
 QUALIFICATION, RESERVATION OR ADVERSE REMARK IN STATUTORY AUDIT REPORT
 AND SECRETARIAL AUDIT REPORT
 
 There is no qualification, reservation or adverse remark made by the
 Statutory Auditors in their Auditors'' Report to the Financial
 Statements or by the Secretarial Auditor in its Secretarial Audit
 Report for the financial year ended March 31, 2016.
 
 RESEARCH & DEVELOPMENT ACTIVITIES AND ENERGY CONSERVATION
 
 Your Company''s Research & Development activities during the year under
 review continued to emphasize on creating a pollution-free and a safe
 work environment. Technological improvement in product development,
 material development, introduction of new footwear moulds, process
 improvement, etc. were the key focus area, in order to improve quality
 of footwear and productivity in manufacturing. During the year under
 review, an expenditure of approx. Rs.62.2 Million was incurred on
 Research & Development (including product development initiatives), as
 against Rs.61 Million during the year 2014-15. 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. 11.3 Million during the year under review, as against
 the same savings during 2014-15. Your Company shall continue to invest
 on Research & Development activities and energy saving measures in its
 manufacturing units in the future as well.
 
 EFFORTS ON REDUCING ENVIRONMENTAL IMPACT AND SUSTAINABILITY
 
 Your Company is conscious and committed to maintain environmental and
 ecological balances of this planet and makes its conduct subject to
 environment audit practices. Across all manufacturing units, effluent
 treatment plants are working effectively and efficiently. Since
 Batanagar and Bataganj factories are located at the bank of River
 Ganges, water discharge to the River Ganga meets the norms of the
 Clean Ganga initiatives of the Central Government. All the factories
 are complying with stack emission qualities and ambient air qualities.
 Special thrusts are given on waste management, conservation of energy
 and water and natural resources.
 
 On Water Conservation initiatives, Rain Water Harvesting Plant was
 established at the factory at Bangalore during the year 2010 and it is
 working efficiently and effectively towards utilization of rain water.
 On Energy Conservation initiatives, Batanagar factory introduced
 Bio-fuel Briquette fired boiler by replacing fossil fuel oil fired
 boiler and introduced various low energy sensitive equipments and lamps
 by replacing high energy consumed devices. Further, in all factories
 your Company has moved to Water Based (WB) adhesives from petroleum
 Solvent Based (SB) adhesives.
 
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE 
 EARNINGS & OUTGO
 
 A Statement containing information on conservation of energy,
 technology absorption and foreign exchange earnings & outgo of the
 Company, in the prescribed format, under Section 134(3)(m) of the
 Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules,
 2014, is annexed to this Board''s Report and marked as Annexure III.
 
 CORPORATE SOCIAL RESPONSIBILITY
 
 Corporate Social Responsibility (CSR) continues to be a commitment of
 your Company in order to create a good impact in the society it
 belongs. Your Company endorses the idea of improving quality of lives
 of people in the communities in which it operates because the society
 is an essential stakeholder. Your Company believes that giving back to
 the society through CSR activities is its moral duty.
 
 Pursuant to the provisions of Section 135 of the Companies Act, 2013
 read with the Companies (Corporate Social Responsibility Policy)
 Regulations, 2014, a report on CSR Activities, in the prescribed
 format, is annexed to this Board''s Report, marked as Annexure IV and
 the same forms an integral part of the Annual Report.
 
 SUBSIDIARY COMPANIES
 
 Bata Properties Limited and Way Finders Brands Limited continue to be
 wholly-owned subsidiaries of your Company.  Coastal Commercial & Exim
 Limited continues to be the only step down wholly-owned subsidiary of
 your Company.
 
 The Annual Reports of the abovementioned Subsidiaries for the financial
 year ended March 31, 2016 shall be provided to the Members of the
 Company upon receipt of written requests from them. The Annual Reports
 of these Subsidiary Companies will also be made available for
 inspection by the Members of the Company at the Registered Office of
 the 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.
 
 Pursuant to the provisions of Section 129(3) of the Companies Act,
 2013, a statement containing salient features of financial statements
 of the aforesaid Subsidiaries, in Form AOC-1, is attached to the
 Financial Statements of your Company for the year ended March 31, 2016.
 
 The Consolidated Financial Statements of your Company for the financial
 year ended March 31, 2016, as prepared in terms of the Accounting
 Standard AS-21 issued by the Institute of Chartered Accountants of
 India are also forming part of this Annual Report.
 
 MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN
 END OF THE FINANCIAL YEAR AND DATE OF REPORT
 
 There has been no material change and commitment affecting financial
 position between end of the financial year and the date of this Board''s
 Report.
 
 The Ministry of Corporate Affairs, Government of India vide its
 Notification dated February 16, 2015 has issued the Companies (Indian
 Accounting Standards) Rules, 2015 which lays down a roadmap for
 companies for implementation of Indian Accounting Standards (Ind AS).
 Every listed company and their holding and subsidiary companies (other
 than banking companies, insurance companies and non-banking financial
 companies) are required to comply with Ind AS in the preparation of
 their financial statements for accounting periods beginning on or after
 April 1, 2016, with the comparatives for the periods ending March 31,
 2016. In pursuance of the above Notification, your Company and its
 subsidiaries have adopted Ind AS with effect from April 1, 2016. Your
 Company has assessed its current financial reporting framework taking
 into consideration Ind AS and has indentified major points of
 differences. Your Company has devised a robust implementation plan for
 adoption of Ind AS.
 
 SIGNIFICANT AND MATERIAL ORDERS
 
 During the year under review, your Company has amicably settled its
 protracted litigations with Relaxo Footwear Limited relating to ''SPARX''
 Trademark. Necessary consent terms have been filed with the appropriate
 Trademarks Authorities and before the Hon''ble Delhi High Court. Except
 this, there has been no ''material'' litigation outstanding as on March
 31, 2016. Details of litigation on tax matters are disclosed in the
 Auditors'' Report and Financial Statements which are forming part of
 this Annual Report.
 
 AWARDS AND RECOGNITION
 
 Your Board is pleased to inform that your Company has been able to
 maintain its leadership position in the organized footwear market by
 bagging several awards and recognitions. During the year under review,
 your Company received several Awards and Recognitions, which include
 the following:
 
 - The Most Trusted Brand - In 2015, Bata was awarded with the title of
 the most trusted brand according to the Brand Trust Report, India Study
 2015.
 
 - Best Footwear Brand - Known as the brand with outstanding e-Retail
 Performance and re-design/ re- launch of the Year by Franchise India in
 2015.
 
 - Delhi NCR''s Hot 50 brands by Hindustan Times co-hosted by LinkedIn
 
 - Child''s Most popular Award by CHILD Magazine.
 
 SUPPORT FROM BATA SHOE ORGANIZATION
 
 Your Company continues to receive assistance and benefits of technical
 research and innovative programs of Bata Shoe Organization (BSO)
 through Global Footwear Services Pte. Ltd., Singapore (GFS). Your
 Company has renewed the Technical Collaboration Agreement with GFS with
 effect from January 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 visiting
 senior personnel of GFS and other BSO group companies to improve its
 product range and operational processes throughout the year. In terms
 of the renewed Agreement as aforesaid, your Company has paid a
 technical services fee of Rs. 237.4 Million to GFS for the financial
 year ended March 31, 2016, equivalent to approx. 1% of the Net Turnover
 of your Company.
 
 STATUS OF BATANAGAR PROJECT
 
 As reported in the earlier Annual Reports, in terms of the Order of the
 Government of West Bengal dated August 25, 2014 as amended vide
 Memorandum dated November 28, 2014, completion of the remaining
 obligations with regard to development of an Integrated Township
 Project at Batanagar, West Bengal would be the sole responsibility of
 Riverbank Developers Private Limited (RDPL) - the erstwhile Joint
 Venture Company of the Company and the obligations of your Company
 stand satisfied. RDPL has been given time up to March 31, 2017 to
 fulfil the requirements as stipulated in the aforesaid Memorandum
 issued by the Government of West Bengal.
 
 As mutually agreed inter alia, between RDPL and the Company vide New
 Development Agreement dated April 28, 2010 read with Addendum Agreement
 dated December 5, 2013, your Company received approx. 1,36,955 sq. ft.
 of constructed space in the Project during the previous year. In terms
 of the said Agreement, your Company took possession of the remaining
 1,95,075 sq. ft. of constructed space in the said Project, during the
 year under review. Accordingly, RDPL''s obligation to handover 3,32,030
 sq. ft. of constructed space to the Company has been completed.
 
 In view of the above, your Company had written back provision for
 contingent liability amounting to Rs. 93 Million in the previous year.
 The remaining provision amounting to Rs.123.2 Million has been written
 back in the financial year ended March 31, 2016 as no longer required.
 
 Notwithstanding anything contained in the Order and Memorandum as
 aforesaid issued by the Government of West Bengal, your Company is
 committed to invest in the development and modernization of
 manufacturing units in Batanagar and also shall continue to take all
 necessary steps to rejuvenate and improve lifestyles of its employees
 in the State of West Bengal.
 
 BOARD OF DIRECTORS AND BOARD MEETINGS
 
 Your Company has a duly constituted Board of Directors which is in
 compliance with the requirements of the Companies Act, 2013, Schedules
 thereto and Rules framed there under and also in terms of the provisions
 of the SEBI (Listing Obligations & Disclosure Requirements)
 Regulations, 2015 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.
 
 A total of five Meetings of the Board of Directors of your Company were
 held during the year under review, i.e., on May 27, 2015; August 5,
 2015; August 19, 2015; November 4, 2015 and February 10, 2016. The
 maximum interval between two meetings did not exceed 120 days, as
 prescribed in the Companies Act, 2013, Clause 49 of the erstwhile
 Listing Agreements with the Stock Exchanges and in the SEBI (Listing
 Obligations and Disclosure Requirements) Regulations, 2015. Details of
 all Board / Committee Meetings are given in the Corporate Governance
 Report which forms part of this Annual Report.
 
 AUDIT COMMITTEE
 
 Your Board has a duly constituted Audit Committee in terms of Section
 177 of the Companies Act, 2013 read with the Rules framed there under
 and Regulation 18 of the SEBI (Listing Obligations and Disclosure
 Requirements) Regulations, 2015. The term of reference of the Audit
 Committee has been approved by the Board. The Composition of the Audit
 Committee, no. of meetings held during the year under review, brief
 terms of reference and other details have been mentioned in the
 Corporate Governance Report section which is annexed to this Annual
 Report. All the recommendations made by the Audit Committee were
 accepted by your Board.
 
 NOMINATION AND REMUNERATION POLICY
 
 The Nomination and Remuneration Policy formulated by the Nomination and
 Remuneration Committee of the Board of Directors and approved by your
 Board provides for criteria for selection and appointment of Directors,
 Key Managerial Personnel (KMP) and Senior Management Personnel (SMP).
 The Policy provides for criteria for the Nomination and Remuneration
 Committee and the Board for fixing remuneration of the Directors, KMP,
 SMP as well as other employees of the Company. The Policy also provides
 points of reference for performance evaluation of the Board of
 Directors, the Committees of Directors and individual Directors of the
 Company. Performance evaluation of all the KMP, SMP and other employees
 are carried out based on the individual evaluation of Key Result Area
 (KRA). The Policy enumerates the powers, roles and responsibilities of
 the Nomination and Remuneration Committee.
 
 The Nomination and Remuneration Committee oversees the Company''s
 nomination process for Directors and in that reference identifies,
 screens and review individuals qualified to be appointed as a Director
 on the Board of Directors of the Company. 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. The Non-executive Directors (other than Independent
 Directors) are liable to retire by rotation at Annual General Meeting
 and if eligible, may seek approval of the Members for their
 re-appointment. Independent Directors of the Company are appointed to
 hold their office for a term up to five consecutive years on the Board
 of the Company. Based on their eligibility for re-appointment for
 another term of five consecutive years, 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, subject to approval of the Members of the
 Company. The Directors, KMP and SMP shall retire as per the applicable
 provisions of the Companies Act, 2013 and the policy of the Company.
 Your Board has the discretion to retain the Directors, KMP and SMP in
 the same position / remuneration or otherwise even after attaining the
 retirement age, for the benefit of the Company, subject to compliance
 of all applicable legislations.  While determining remuneration of the
 Directors, KMP, SMP 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 the remuneration to
 Directors, KMP, SMP and other employees 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, KMP, SMP and other employees. Performance
 Linked Incentive is determined by overall business performance of the
 Company. Annual increments are decided by the Nomination and
 Compensation 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 Non-Independent Directors of your
 Company do not receive any remuneration 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 is available on the website of the Company at www.bata.in and
 same is available at the link:
 http://bata.in/0/pdf/Remuneration-Policy_2015.pdf.
 
 BOARD EVALUATION
 
 In compliance with the requirements of the provisions of Section 178 of
 the Companies Act, 2013 read with Rules framed there under and
 provisions of Schedule IV to the Act as well as the SEBI (Listing
 Obligations and Disclosure Requirements) Regulations, 2015, your
 Company has carried out a performance evaluation programme for the
 Board of Directors, Committees of the Board and individual Directors
 for the financial year ended March 31, 2016.
 
 Such performance evaluation process was formulated in consultation with
 the Nomination and Remuneration Committee and approved by your Board.
 The performance evaluation, thus, included the following:
 
 (i) Board Assessment;
 
 (ii) Assessment of each of the Committees constituted by the Board;
 
 (iii) Self-assessment by each Director;
 
 (iv) Peer Assessment by each Director.
 
 Your Directors were circulated performance evaluation sheets with
 various parameters on a rating scale and to communicate the same to the
 Chairman of the Board of Directors and the Chairman / Chairperson of
 the respective Committees of the Board in confidential envelopes. The
 outcome of such performance evaluation was discussed at a separate
 meeting of the Independent Directors, held on May 3, 2016 and at the
 Board Meeting held on May 30, 2016.  Based on the aforesaid performance
 evaluation, it was decided to continue the terms of the appointed
 Independent Directors and also to seek approval of the shareholders at
 the forthcoming Annual General Meeting to the proposals of appointment
 / re-appointment of the Directors concerned.
 
 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 is annexed to this Board''s Report
 and marked as Annexure V.
 
 A Statement containing Information on particulars of employees of the
 Company drawing remuneration of not less than Rs.60 Lac per annum or
 Rs. 5 Lac per month when employed for part of the year as specified
 under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) &
 5(3) of the Companies (Appointment and Remuneration of Managerial
 Personnel) Rules, 2014, in the prescribed format, is annexed to this
 Board''s Report and marked as Annexure VI.
 
 WHISTLE BLOWER POLICY / VIGIL MECHANISM
 
 In terms of Section 177 of the Companies Act, 2013, Rules framed
 there under and Regulation 22 of the SEBI (Listing Obligations and
 Disclosure Requirements) Regulations, 2015, 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 the same has
 been uploaded on the website of the Company at
 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. However,
 during the year under review, there has been no incidence reported
 which requires action by the Vigil Mechanism Committee.
 
 POLICY ON PREVENTION OF INSIDER TRADING
 
 Your Company has adopted a Code of Conduct for Prevention of Insider
 Trading with a view to regulate trading in equity shares of the Company
 by the Directors and designated employees of the Company. The said Code
 of Conduct is available on the website of the Company at www.bata.in.
 The Code requires pre-clearance for dealing in Company''s shares and
 prohibits purchase or sale of shares in your Company by the Directors
 and designated employees, while they are in possession of unpublished
 price sensitive information and also during the period when the Trading
 Window remains closed.
 
 POLICY ON PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
 
 Your Company is committed to provide a safe and secure environment to
 its women employees across its functions and other women stakeholders,
 as they are considered as integral and important part of the
 Organization.
 
 Your Company has in place an Anti Sexual Harassment Policy in line with
 the requirements of the Sexual Harassment of Women at the Workplace
 (Prevention, Prohibition & Redressal) Act, 2013.
 
 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, 2016:
 
 - 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 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 generally accepted accounting principles 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.
 
 
 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.
 
 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. The Risk Management
 Committee held their first meeting on May 30, 2016.
 
 Your Board considers that the Internal Financial Controls, affecting
 the Financial Statements of your Company are adequate and are operating
 effectively.
 
 DIRECTORS AND KEY MANAGERIAL PERSONNEL
 
 Your Board at its meeting held on May 27, 2015 appointed Mr. Ravindra
 Dhariwal and Mr. Shaibal Sinha as Additional Directors with effect from
 May 27, 2015. Subsequently, at the Eighty Second Annual General Meeting
 of your Company held on August 5, 2015, appointment of Mr. Shaibal
 Sinha was approved by the Members of the Company as a Director of the
 Company, whose period of office is liable to determination by
 retirement of directors by rotation at the Annual General Meetings. In
 terms of the requirements of Section 149 of the Companies Act, 2013
 read with Schedule IV to the Act and Rules framed there under, the
 Members of the Company at the aforesaid Annual General Meeting
 appointed Mr. Ravindra Dhariwal as an Independent Director of your
 Company for a term of five consecutive years, effective from May 27,
 2015. Your Company has formalized the appointment of Mr. Ravindra
 Dhariwal as an Independent Director of your Company by issuing an
 Appointment Letter to him and the same is available on the website of
 the Company www.bata.in.  Subsequent to his attaining superannuation,
 Mr. Jorge Carbajal stepped down as a Non-Executive Director of your
 Company with effect from August 19, 2015. Mr. Ranjit Mathur, Director
 Finance & Chief Financial Officer, Mr. Kumar Nitesh, Managing
 Director-Retail and Mr. Jack G. N.  Clemons, Non-Executive Director
 resigned from the Board of Directors of your Company with effect from
 August 19, 2015, November 4, 2015 and November 12, 2015, respectively.
 Your Board places on record its deep appreciation for the contributions
 made by Mr. Jorge Carbajal, Mr.  Ranjit Mathur, Mr. Kumar Nitesh and
 Mr. Jack G. N. Clemons during their tenure as Directors of the Company
 and wishes them success in their future endeavours.  Consequent upon
 resignation of Mr. Ranjit Mathur, at the Board Meeting held on August
 19, 2015, your Board appointed Mr. Ram Kumar Gupta as an Additional
 Director of the Company with effect from August 19, 2015 to hold office
 up to the date of the forthcoming Annual General Meeting.  At the said
 Board Meeting, pursuant to Section 196 of the Companies Act, 2013 read
 with applicable Rules, Mr. Ram Kumar Gupta has also been appointed as a
 Whole-time Director designated as the Director Finance of the Company
 for a period of five years with effect from August 19, 2015, subject to
 approval of the Shareholders at the ensuing Annual General Meeting. In
 terms of Section 152(6) of the Companies Act, 2013 read with the
 provisions of the Articles of Association of the Company, Mr. Ram Kumar
 Gupta shall be liable to retire by rotation at Annual General Meetings.
 At the same Board Meeting, pursuant to Section 203 of the Companies
 Act, 2013, Mr. Ram Kumar Gupta was also appointed as the Chief
 Financial Officer and a Key Managerial Person of the Company for a
 period of five consecutive years with effect from August 19, 2015.  At
 the Board Meeting held on February 10, 2016, your Board appointed Mr.
 Christopher Kirk, Chairman of Bata Shoe Organization as an Additional
 Director of the Company with effect from February 10, 2016 to hold
 office up to the date of the forthcoming Annual General Meeting. Your
 Board recommends appointment of Mr. Christopher Kirk as a Non-
 Executive Director of the Company at the ensuing Annual General
 Meeting, whose period of office would be liable to determination by
 retirement of directors by rotation.  Your Directors welcome Mr.
 Christopher Kirk and Mr. Ram Kumar Gupta on the Board and wishes a
 successful association with them during their tenure as the Directors
 of the Company.
 
 The Company has received Notices under Section 160 of the Companies
 Act, 2013 from Members of the Company along with requisite deposits
 signifying the candidature of Mr. Christopher Kirk and Mr. Ram Kumar
 Gupta for their respective appointments as Directors of the Company at
 the ensuing Annual General Meeting.  Mr. Rajeev Gopalakrishnan,
 Managing Director was appointed for a period of five years with effect
 from February 23, 2011, in terms of the Shareholders approval obtained
 at the Seventy Eighth Annual General Meeting held on June 28, 2011 and
 accordingly held office till February 22, 2016. Your Board at its
 Meeting held on February 10, 2016, in accordance with Sections 196, 203
 and applicable provisions of the Companies Act, 2013 and Schedule V
 thereto read with Rules framed there under, re-appointed Mr. Rajeev
 Gopalakrishnan as the Managing Director, a Key Managerial Person, of
 the Company with revised remuneration for a period of five consecutive
 years with effect from February 23, 2016, subject to approval of the
 Members of the Company at the ensuing Annual General Meeting.
 
 In accordance with the provisions of Section 152 of the Companies Act,
 2013, Rules framed there under and the Articles of Association of your
 Company, Mr. Shaibal Sinha, Director is due to retire by rotation at
 the ensuing Annual General Meeting and being eligible, offers himself
 for re-appointment.
 
 Your Board is of the opinion that continued association of Mr. Rajeev
 Gopalakrishnan and Mr. Shaibal Sinha with the Board will be of immense
 benefit to your Company and, therefore, recommends their
 re-appointment.
 
 In terms of Section 102 of the Companies Act, 2013, Regulation 36 of
 the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
 2015 and the Secretarial Standards on General Meetings (SS-2) issued by
 the Institute of Company Secretaries of India, brief profiles of Mr.
 Christopher Kirk, Mr. Rajeev Gopalakrishnan, Mr. Ram Kumar Gupta and
 Mr. Shaibal Sinha have been annexed to the Notice convening the Eighty
 Third Annual General Meeting of the Members of the Company and the same
 form an integral part of this Annual Report.
 
 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 in
 terms of Section 149(6) of the Companies Act, 2013 and that there is no
 change in their status of Independence.
 
 Your Board has appointed 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 as the Key Managerial Personnel of your Company.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 Pursuant to provisions of Section 134 of the Companies Act, 2013, your
 Directors 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 at the end of the financial year and of the profit and loss
 of the company for that period;
 
 (c) they have taken proper and sufficient care for the maintenance of
 adequate accounting records in accordance with the provisions of this
 Act for safeguarding the assets of the company and for preventing and
 detecting fraud and other irregularities;
 
 (d) they have prepared the annual accounts on a going concern basis;
 
 (e) they have laid down internal financial controls to be followed by
 the company and that such internal financial controls are adequate and
 were operating effectively; &
 
 (f) they have devised proper systems to ensure compliance with the
 provisions of all applicable laws and that such systems were adequate
 and operating effectively.
 
 MANAGEMENT DISCUSSION AND ANALYSIS REPORT
 
 (a) Industry structure and developments
 
 The Global Footwear Market, by geography, is divided into four regions:
 North America, Europe, Asia Pacific and Rest of the World. In terms of
 volume, Asia Pacific is the largest contributor to the market,
 accounting for a market share of approximately 40%. The major reason is
 attributed to increasing middle class population and rapid expansion of
 footwear industry in emerging countries such as China and India among
 others. Presently, in terms of revenue, Global Footwear Market is
 valued at approx. USD 210 Billion and is expected to grow at a CAGR of
 2.5% from 2015 to 2023. In terms of volume, Global Footwear Market is
 approx. 10 Billion pairs, which may cross 12 Billion pairs in 2023 by
 growing at a CAGR of 2.3%
 
 India is the second largest producer of footwear in the world, next to
 China and has an ever-growing domestic market.  Annually, India
 produces about 2.1 Billion pairs and it is estimated that production of
 footwear will exceed 4 Billion pairs by 2020. The per capita
 consumption of footwear in India is set to grow rapidly from its
 existing level of 1.7 pairs per annum. The global average per capita
 consumption of footwear is 3 pairs per annum, whereas the same for
 developed countries in the World is more than 5 pairs per annum.
 
 The footwear industry is an important driver in the economic growth of
 India and is a significant segment of the leather industry. The Indian
 Footwear Market is divided into organized and unorganized segment,
 where the latter occupies about 65% of the overall market. In the
 recent past, the organized footwear sector has witnessed a faster
 growth and is expected to grow at 15% over the next few years.
 
 The Government of India now allows 100% Foreign Direct Investment (FDI)
 in Footwear manufacturing sector through the Automatic Route. The
 Indian Government is also boosting the Footwear Industry by reducing
 excise duty on certain category of footwear. Government of India in its
 Finance Budget 2016, has proposed reduction in excise duty for rubber
 sheets for soles and heels from 12.5% to 6% and an increase in
 abatement from retail sales price for calculating excise duty for
 footwear from 25% to 30%. Such step by the Government is creating a
 conducive investment climate towards attracting overseas investments
 and increasing employment potential within the Country.
 
 (b) Opportunities and Threats
 
 While India is the second largest footwear manufacturers of the World,
 only 10% footwear produced in India are being exported and the
 remaining 90% of the production are sold within the Country for
 domestic consumption. China continues to be leading country in the
 World as an exporter. Indian footwear industry is exploring ways to
 increase exports and the growth in export of footwear will depend on
 quality and cost competitiveness.
 
 India is attracting various established fashion brands of the World as
 well as retailers who are re-orienting their focus on the domestic
 footwear market, which has led to a significant increase in the number
 of retail outlets nationwide.  Furthermore, growing fashion
 consciousness and increasing demand for innovation in design and
 technology of footwear products is increasing competitiveness in the
 Markets.
 
 Your Company has enjoyed a presence in the Indian Footwear Industry for
 more than eight decades and has established an integrated
 manufacturing, supply chain and distribution network. Your Company
 understands the latest trends in footwear industry and will exploit its
 leadership position in the organized footwear industry and take
 appropriate steps to overcome the challenges in the footwear industry
 to achieve its objectives.
 
 (c) Segment wise or product wise performance
 
 Your Company operates in two segments - Footwear & Accessories and
 Surplus Property Development. Your Company has chosen Footwear &
 Accessories as its primary segment.  Performances of major business
 categories and key brands of your Company during the financial year
 ended March 31, 2016 are highlighted below:
 
 Retail Business
 
 During the twelve month period ended March 31, 2016, your Company
 opened 26 new retail stores across India.
 
 The new stores are larger in size and are based on global design,
 making them look complete and enticing with adequate space to display
 the products. Your Company plans to add around 30 new retail stores
 every year to increase its presence in the Malls and High Street
 Markets and 30 new Franchisee stores also in the Tier-2 and Tier-3
 cities across India. Your Company plans to open 5 destination stores
 each year to provide a unique shopping experience with wide collection
 to the consumers. Such destination stores will comprise of very large
 retail space located at the outskirts of the cities with all amenities
 like ample parking space, children''s play area and food-court. In
 addition, your Company shall continue to make investment on renovating
 existing stores hence creating a delightful shopping experience for the
 customers by improving store layouts and creating an emphasis on key
 products within the retail stores.
 
 India has witnessed exponential growth in e-commerce business with
 customers preferring to shop online.  This leads to a lesser footfall
 and decreasing conversion rate, impacting the retail business across
 the Country.  Your Company believes that the present business model of
 e-commerce players offering huge discount is not sustainable in the
 long run and expects the customers'' footfall in retail store shall
 increase. In order to cater to the customers who prefer online
 shopping, your Company has been exploring various plans to facilitate
 their shopping choices through on-line kiosks from the retail stores of
 the Company.
 
 Digital Multi-Channel Business
 
 The business world is being digitized rapidly adding value to the
 customers on existing product offerings.  Technical innovations and
 web-based transactions have become the key to success. Your Company''s
 Digital Multi-Channel Business has quickly adopted these changes in
 consumer buying pattern and invested in strengthening this segment of
 business.
 
 Your Company''s online business has grown well during the year under
 review. Your Company sold more than 3.8 lacs pairs of footwear through
 online channels achieved a turnover of approx. Rs.360 Million. Your
 Company''s e-commerce presence has penetrated in more than 2000 cities
 across India.
 
 During the year under review, your Company''s e-commerce Division mainly
 focused on increasing its customer database by reaching out to new set
 of target audience and also establishing successful association with
 many reputed companies and banks, e.g., HDFC Bank, Standard Chartered
 Bank, State Bank of India, Deutsche Bank, Samsung, SpiceJet Airlines,
 etc. Such alliances helped your Company increase its brand awareness
 and customer database. Your Company''s products continued to be sold
 through its partners'' websites including Amazon, Myntra, Jabong,
 Flipkart, etc. Your Company has launched a ''Click and Collect'' service
 for its Stores in Delhi NCR Region. The customers can now shop the
 entire range of products available online with the click of a button
 and have their preferred footwear or accessories delivered to the local
 Bata retail store of their choice. Your Company has launched online
 exclusive product lines for both Spring-Summer Season and Autumn-Winter
 Season generating a good response from the customers.
 
 The website of the Company has been made more user-friendly in order to
 provide better interface. The website now provides facilities like easy
 navigation, simplistic designs, effortless checkout process and
 effective product shots. Your Company has also launched Bata Mobile
 Application with interactive user- interface which has also been well
 accepted in the market. Your Company has strengthened its e-commerce
 team and had recently launched Bata Blog, which acts as a style
 inspiration for the young audience and also provides frequent online
 customer surveys and customer feedback for improved services. Going
 forward, your Company shall expand its Digital Multi-Channel Business
 through various measures including placement of online kiosks in major
 retail stores, tie-up with payment banks and also increasing the
 presence of its product offerings through partners'' websites.
 
 Hush Puppies
 
 Your Company''s international premium brand ''Hush Puppies'' continues to
 live up to its brand image of comfort, quality and style. The year
 2015-16 was a milestone year for Hush Puppies as your Company sold over
 a Million pair in the year 2015 itself. In addition to being available
 through the retail stores, wholesale network and e-commerce channel of
 your Company, the brand has been expanding its presence through 68
 exclusive stores and 37 shop- in-shops in premium departmental stores.
 During the year under review, Hush Puppies embarked on a journey of
 re-positioning itself as an International Premium Lifestyle Casual
 Footwear brand.  Your Company shall continue to focus on offering
 unique products under this brand, which will be more comfortable with
 contemporary fashionable style, making ''Hush Puppies'' the most desired
 lifestyle footwear brand in India.
 
 Foot in
 
 Recognizing needs of the young consumers, your Company''s new retail
 concept - Foot in was created in the year 2012. It is a new business
 model with a different approach to cater to the young customers who are
 style conscious and trend-savvy shoppers and need quality merchandise
 at affordable price. Foot in has become the source for current
 fashionable footwear at great value. Foot in business is fast growing,
 featuring new and exciting store environments, trendy shoes and
 accessories designs at the right price. At present, your Company has 35
 exclusive Foot in stores across the Country, which are strategically
 located to cater to the target group of young shoppers.
 
 Bubble gummers and Disney
 
 In order to cater to the children category of customers, your Company
 has been introducing many new designs and innovative footwear for the
 children. Through Bubble gummers brand of footwear, your Company has
 always been striving to make quality shoes with uncompromising comfort
 and features that safeguard their little feet. Bubble gummers is
 retailed through all Bata stores across the Country and has been the
 first point of contact to start our consumers'' journey and long term
 association with Bata. With 18% of the Country''s population below the
 age of 10 years, potential to grow in the children category of footwear
 is huge. Therefore, it is one of the key focus areas for your Company
 today. With a revamped collection, a dedicated team to drive this
 brand, experience of being associations with brands like Angry Birds in
 the past and Walt Disney at present, your Company has robust plans to
 make Bubble gummers the best children footwear brand in the Country.
 Your Company has established an association with The Walt Disney
 Company India Pvt. Ltd. and working with a set of designers from
 Disney, to create a complete collection covering all types of footwear
 ranging from casual shoes, canvas shoes and ballerinas to everyday-wear
 sandals and chappals. Your Company has been exploring the possibilities
 to create exclusive ''Disney Corners'' in some of the key retail stores
 across major cities in India to highlight the collection and add value
 to the children category of footwear range. Your Company is confident
 that the young little customers will be excited and thrilled to see
 their favorite characters on their favorite shoes.
 
 Non-Retail Business
 
 Your Company''s urban wholesale business has recorded a good growth in
 turnover and profitability during the year under review. The urban
 wholesale business of your Company has been penetrating the markets
 through a wide network of more than 325 distributors across India. Your
 Company offers various incentive / loyalty rewards to its existing and
 new distributors for promoting the Company''s brands of footwear in the
 areas where the Company does not have retail presence of its own.
 During the year under review, your Company has strengthened its urban
 wholesale business monitoring team and efforts are being made to
 increase its market share in the wholesale footwear business.
 
 During the year under review, your Company''s Industrial business
 division has recorded a good growth in turnover and is now recognized
 as one of the foremost suppliers in the safety footwear market catering
 to the requirements of different industries in India. The division has
 expanded its coverage in the market and also continues to remain
 focused towards upgrading the market with newer technology products.
 The product range has been refreshed by launching new designs and new
 sole patterns as well as new PU-Rubber sole collection. Your Company
 provides more than 100,000 pairs of safety shoes for Indian Navy and
 other defence services.
 
 Your Company''s Institutional business has recorded better results
 during the financial year ended March 31, 2016 as compared to the
 previous financial period. The focus is to cater to segments like
 defense, aviation, education, corporate, etc. A new range for the
 healthcare segment has been launched with specialized footwear to be
 used in hospitals for doctors, nurses, front office staff, maintenance
 team, etc.
 
 Customer Care Initiatives
 
 Your Company has a dedicated customer care team with a toll free number
 to attend customer grievances and to resolve the same amicably. In the
 financial year 2014-15, your Company introduced a new initiative of
 customer loyalty program viz., ''The Bata Club''. During the year under
 review, this loyalty program has been introduced in more than 800
 retail stores across 47 cities in India. Since its introduction,
 approx. 6.7 Million Club Memberships have already been added to ''The
 Bata Club''. These Club members are communicated on priority about
 various new marketing offers and promotions as and when planned by your
 Company. Several personalized offers have been customized for these
 ''The Bata Club'' Members on the basis of their purchase behaviour and
 trends, e.g., Raksha Bandhan Campaign, Naturalizer product promotion,
 Pay less - Get more Offer, etc. Your Company aims to provide best in
 class support to its customers by addressing their queries and feedback
 through a dedicated helpdesk.
 
 (d) Outlook
 
 Despite a challenging retail environment and increase in competitive
 intensity, your Company continued to deliver steady improvement in its
 performance.. Your Company is taking appropriate steps to leverage its
 position to achieve good growth in terms of volumes and profitability.
 Your Company has been investing to strengthen its Digital Multi-
 Channel Business Division along with Logistics Division with due
 importance for delivery of footwear and accessories to the customers
 through ''delivery services'', ''cash on delivery'' and ''click and collect''
 services.
 
 India has a good potential for the footwear industry in view of rapid
 change in lifestyle, increase in disposable income of middle-class
 people and continuous growth in number of working women. Customers''
 preference for branded products is providing a better opportunity to
 the players in organized footwear markets in India.
 
 (e) Risks and concerns
 
 Your Company through its Audit Committee and recently constituted Risk
 Management Committee monitors its major risks and concerns at regular
 intervals. Appropriate steps are taken in consultations with all
 concerned to mitigate such risks. In addition to the business risks,
 some of the major risks and concerns are summarized as under:
 
 i.  Globally competitive business environment
 
 Ever increasing competition from local and overseas players in the
 footwear industry remains a major challenge for your Company.
 
 In addition to the above, your Company is concerned about the current
 sluggish retail growth and slow infrastructural development in India.
 Many of your Company''s retail stores are large formats stores located
 in Malls. Increases in rental costs and high cost of raw materials may
 negatively impact business performance of your Company. In order to
 overcome these risks and concerns, your Company has taken appropriate
 measures, e.g., long term lease agreement for retail stores,
 alternative sources of raw materials, ensuring availability of skilled
 laborers, etc. Your Company believes such measures are adequate to
 mitigate the aforesaid risks and concerns.
 
 ii.  Risk related to changes in law and regulations
 
 Your Company operates in a complex regulatory environment and fully
 abides by the laws and regulations of the Country it operates in. Any
 change in the laws and regulations governing the leather and footwear
 industry may affect the business and financial performance of your
 Company.
 
 iii.  Contingent Liabilities involving Litigations
 
 During the normal course of its business operations, your Company has
 been subjected to several legal cases in connection with or incidental
 thereto. These litigations include civil cases, excise and customs
 related cases, etc. filed by and against the Company. These cases are
 being pursued with due importance and in consultation with legal
 experts in respective areas. Your Board believes that the outcome of
 these cases is unlikely to cause a materially adverse effect on the
 Company''s profitability or business performance. Your Company has a
 Contingent Liability of Rs. 949.43 Million as on March 31, 2016 as
 compared to Rs. 767.15 Million as on March 31, 2015. Attention of the
 Shareholders is drawn to the explanations mentioned in point no. 31 of
 the Notes to Financial Statements as attached.. In view of the present
 status and based on legal advice received, your Board is of the opinion
 that no provision is required to be made against these Contingent
 Liabilities during the year under review.
 
 iv.  Trade Unions related risks
 
 Your Company has several recognized Trade Unions and enjoys harmonious
 relationship with all its employees.  During the year under review,
 your Company has entered into long term agreements with its Workers''
 Unions at Manufacturing Units. During the year, your Company
 successfully negotiated Long Term Settlements with the Workers'' Union
 at Bataganj and with the Shop Employees'' Union. The industrial
 relations at all the units of the Company have been harmonious and
 peaceful with active involvement of the employees in the collective
 bargaining process.
 
 (f) Internal Control Systems and their adequacy
 
 Your Company has an adequate system of internal controls commensurate
 with its size and scale of operations, to ensure that all assets of the
 Company are safeguarded and protected and that all transactions are
 authorized, recorded and reported appropriately. 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.
 
 (g) Discussion on financial performance
 
 Your Company has been able to achieve profitable growth continuously
 for a decade now and believes that this is sustainable, barring
 unforeseen circumstances.
 
 The Earning per Share (EPS) (Basic and Diluted) of your Company for the
 financial year ended March 31, 2016 was at Rs. 17.02. The EPS for the
 fifteen month period ended March 31, 2015 -the previous financial year
 of the Company was Rs. 17.99. The EPS for the twelve month period ended
 March 31, 2015 was approx. Rs. 14.92. As informed through earlier
 Annual Reports, your Company does not have any Bank Borrowings since
 April-2010 and the entire capital expenditure has been funded through
 internal sources.
 
 Capital Expenditure incurred during the year under review amounted to
 Rs.794.41 Million as compared to Rs.1538.77 Million during the fifteen
 month period ended March 31, 2015.
 
 (h) Material developments in human resource / industrial relations
 front, including number of people employed
 
 Industrial Relations and Personnel
 
 Your Company has been continuously working to improve human resources
 skills, competencies and capabilities in the Company, which is critical
 to achieve results as per our strategic business ambitions. Some key
 initiatives have been taken in the year 2015-16 in this direction.
 These are summarized below:
 
 (i) Building up the best team in all functional areas
 
 During the year, your Company has hired over 25 middle and senior level
 Executives in various functional areas like Retail Operations, Non
 Retail and Merchandising. These professionals come with rich and varied
 domain experience within and across industries. Addition of these
 skills and competencies will address the gaps and take the Company
 towards further growth.
 
 (ii) Creating bench strength and building up capability for future
 growth Management Training Program Your Company has put in place a
 structured Management Training program for roles in Retail Operations,
 Merchandising and Product Design. As part of the program, the Company
 has recruited design and fashion professionals as well as Management
 Graduates from well-known Institutes. After a 12 month long training
 under the mentorship of experienced leaders, these Management Trainees
 are now ready for independent responsibilities. Your Company continues
 to recruit Summer Interns who worked on very specific business impact
 initiatives.
 
 (iii) Training and Development
 
 Retail Training Academy
 
 Your Company had set up a Retail Training Academy in February -2014.
 The Academy designs and delivers specialized courses for different
 roles like Sales Promoters, Store Managers, District Managers and
 Retail Managers. The courses have been designed to ensure comprehensive
 learning of Product as well as Business operations. In the year 2015-16
 the Retail Training Academy trained:
 
 31 District Managers and Retail Managers under 13.5 weeks duration
 Advanced District Administration Professional Training (ADAPT) program
 109 Store Managers under 7.5 weeks duration Store Managers Advance
 Retail Training (SMART) program 204 experienced Store Managers under a
 week long Fully Integrated Retail Store Training (FIRST) program
 urrently, the Academy conducts programs at Gurgaon, Bangalore, Kolkata
 and Mumbai.  ''Passion to Serve'' Training to Store Employees and Store
 Managers
 
 In order to improve customer experience at our Stores, your Company
 rolled out ''Passion to Serve'' Program across Stores in key metro
 cities. The objective of the program is to retain and grow existing
 customers as well as attract new customers. The Store Managers and the
 Sales Promoters along with District Managers were trained in this two
 days'' training session. The training was also followed by mystery
 shopping in order to assess the impact. As part of the program a career
 path was also laid out for a performing Sales Promoter.  During the
 year, over 100 Store Managers and 1011 Sales Promoters were trained.
 
 Product Training
 
 Retail Training Academy (RTA) imparts in-store Product Category
 specific training program to Sales Promoters across stores. Currently
 three different programs namely Power Champs, Comfort Champs and
 Non-Footwear Products Champs are being conducted that covers all
 technologies and products available in the Stores. So far more than 300
 Sales Promoters were trained under the Champs Training Program. This
 program helps Sales Promoters understand products, technologies and any
 special features thus acquiring the product specific selling skills.
 
 People employed
 
 As on March 31, 2016, there were 4,796 permanent employees on the rolls
 of your Company.
 
 CAUTIONARY STATEMENT
 
 Statements in the Management Discussion and Analysis Report describing
 the estimates, expectations or predictions may be ''forward-looking
 statements'' within the meaning of applicable laws and regulations.
 Actual results could differ materially from those expressed or implied.
 Important factors that would make a difference to the Company''s
 operations include demand-supply conditions, raw material prices,
 changes in Government Regulations, tax regimes, economic developments
 within the Country and outside the Country and other factors such as
 litigation and labor negotiations.
 
 CORPORATE GOVERNANCE
 
 In compliance with the provisions of Regulation 34 of the SEBI (Listing
 Obligations and Disclosure Requirements) Regulations, 2015 read with
 Schedule V to the said Regulations, the Corporate Governance Report of
 your Company and a Certificate on Corporate Governance Compliance
 received from M/s. S. R. Batliboi & Co., LLP, Chartered Accountants,
 the Statutory Auditors of your Company, are annexed to this Annual
 Report.
 
 ACKNOWLEDGEMENTS
 
 Your Board acknowledges the support and co-operation received from all
 its stakeholders including our dear shareholders as well as regulatory
 authorities of the Central Government and all State Governments in
 India as they endeavour to create an enabling environment for industry
 and commerce to prosper.
 
 Your Board continues to remain thankful to Bata Shoe Organization for
 their continuous support, guidance and co- operation in conducting the
 business operations of the Company in India.
 
 Your Board wishes to place on record its deep appreciation of the
 Independent Directors. All of them, despite their busy schedule and
 other exigencies, immensely contribute to the Company through their
 strategic guidance and valuable suggestions in improving the business
 performance of the Company.
 
 Your Board appreciates the relentless effort of the Management Team
 lead by the Managing Director who steers the Company in achieving
 better performances year-on-year. Our employees are our biggest
 strength and we gratefully acknowledge their contribution to the
 Company in achieving its objectives to serve our customers.
 
                          For and on behalf of the Board of Directors
 
 
                                                          UDAY KHANNA
 
 Place : Gurgaon                                             Chairman
 
 Date : May 30, 2016                                  (DIN: 00079129)
Source : Dion Global Solutions Limited
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