Your Directors are pleased to present the 90th Annual Report covering the
operational and financial performance of your Company along with the Audited Financial
Statements for the financial year ended March 31, 2023.
FINANCIAL HIGHLIGHTS & PERFORMANCE
(Rs. in Million)
Particulars |
Financial Year ended on
March 31, 2023 (Audited) |
Financial Year ended on
March 31, 2022 (Audited) |
Revenue from operations |
34,515.68 |
23,877.19 |
Other Income |
373.51 |
558.97 |
Total |
34,889.19 |
24,436.16 |
Profit / (Loss) before
Taxation |
4,256.30 |
1,368.27 |
Provision for Taxation |
1,065.13 |
359.40 |
Net Profit / (Loss) |
3,191.17 |
1,008.87 |
Other Comprehensive Income /
(Loss) (net of tax) |
10.29 |
(4.35) |
Total Comprehensive
Income |
3,201.46 |
1,004.52 |
Your Company has prepared the Financial Statements for the financial year ended March
31, 2023, in terms of Sections 129, 133 and other applicable provisions, if any, of
Companies Act, 2013 (as amended) (the "Act") and Schedule III thereto read with
the Rules framed thereunder.
During the financial year ended March 31, 2023, your Company achieved a turnover of Rs.
34,515.68 Million as compared to the turnover of Rs. 23,877.19 Million recorded during the
previous financial year ended March 31, 2022, registering a growth of 44.56%. Your Company
posted a Net Profit of Rs 3,191.17 Million for the financial year ended March 31, 2023, as
against the Net Profit of Rs. 1,008.87 Million for the financial year ended March 31,
2022. The Net Profit for the financial year ended March 31, 2023, reflects a growth of
216.31% over the corresponding profit for the financial year ended March 31, 2022.
On a consolidated basis, your Company reports a turnover of Rs. 34,515.68 Million
during the financial year ended March 31, 2023 and a consolidated Net Profit of Rs.
3230.04 Million for the said financial year.
Your Company continued to be India's leading footwear brand by maintaining its focus on
- Evolution, Expansion and Efficiency.
During the first half of the year under review, your Company witnessed pent-up demand,
followed by demand for office wear as an increasing number of employers announced
return-to-office for their
workforce and physical re-opening of educational institutions across the Country. This
demand translated into highest-ever quarterly sales in the first quarter for your Company
with significant momentum across all sales channels.
Your Company continued to witness green shoots for the rest of the year on several
occasions such as festive seasons, wedding seasons, etc. Your Company also witnessed
significant uptick in demand for fashionable, trendy yet functional and comfortable
footwear. There was a distinct shift in consumer mindset including brand consciousness and
accordingly, your Company maintained its focus on evolution of its product portfolio with
the strategy of casualisation and offered premium fashionable products. This reflected in
overall ASP growth on a yearly basis and expansion in share of the premium category brands
like Hush Puppies, Marie Claire and Red Label. Your Company also saw encouraging demand
for its comfort and casual wear ranges of Bata Comfit, Floatz, etc.
Your Company continues to optimise its retail network, renovate stores to premiumise
customer experience and accelerate expansion through Franchise and Distribution networks.
The year under review marks highest ever expansion in Franchise stores with total
footprint crossing the 2000+ milestone for the first time. Distribution channel was scaled
up to 1150+ towns.
Continuous investments behind marketing campaigns throughout the year under review,
helped strengthening of the already solid brand recall. Your Company launched 'It's Got To
Be Bata' & 'Neo Casuals for Neo Leaders' campaigns which elevated connect with
customers.
With the advent of smart phones and ease of access to e-commerce websites, fast fashion
has reached Tier 2 - 4 cities. Your Company expanded its digital footprint through its own
website (www.bata.in) and major marketplaces. It has a robust e-commerce network that
delivers to over 27,000 Pin codes across the Country. Your Company continues to offer home
delivery through its Omni-channel from all Company- operated stores, thereby, increasing
its Pan-India footprint. During the year under review, home delivery services were
extended to select Franchise Stores on pilot basis. This would open up complete product
catalogue to a Franchisee customer as well. Home deliveries contributed to around 1
Million pairs for the year under review.
The Distribution Business and B2B Business of your Company continued to exhibit
promising growth with repeat orders and new customers. Bata Products are now available in
30,000+ MBOs in 1200+ towns.
Your Company stepped-up its infrastructure to enhance productivity and efficiencies in
value chain. Sourcing strategies of L2L, import substitution, etc., to support
Speed-to-Market contributed significantly to lead time reduction as well as in improving
margins across Retail and I&D businesses.
Your Company continues to invest in I.T. (ERP, Merchandising, Warehouse Management
System, etc.) to enhance productivity and support efficient future growth. ERP and High
Performance Merchandising were two large projects undertaken during the year under review.
Once deployed, HPM would assist in Merchandising for different cohorts and automate the
entire process upto replenishment of stores.
As a responsible corporate citizen and a trusted Brand, your Company is committed
towards its social responsibilities through various initiatives, details of which are
covered subsequently in this Report.
SHARE CAPITAL
The Authorised Share Capital of your Company as on March 31, 2023, stood at Rs. 700
Million divided into 140,000,000 equity shares of Rs. 5/- each. The Issued Share Capital
of your Company is Rs. 642.85 Million divided into 128,570,000 equity shares of
Rs. 5/- each and the Subscribed and Paid-up Share Capital is Rs. 642.64 Million divided
into 128,527,540 equity shares of Rs. 5/- each, fully paid-up.
DIVIDEND
The Board, at its meeting held on May 18, 2023, reviewed and amended the Dividend
Distribution Policy to include a provision that subject to the general considerations and
other parameters / conditions as mentioned in the Policy and further subject to adequate
Retained Earnings to meet requirements of capital expenditure, including for distribution,
supply chain, technology and strategic initiatives and working capital, your Board shall
endeavour to pay / recommend a dividend having pay-out of upto 60% of Profit After Tax for
that year. This provision is effective for dividend for the financial year 2022-23 and
onwards.
The amended Dividend Distribution Policy has been uploaded on the website of the
Company at www.bata.in under the tab "Investor Relations> Company
Policies" at https://www.bata.in/ company-policies.html and is available at the link https://www.bata.in/on/demandware.
static/-/Sites-bata-in-Library/default/ veadaf24d0adb1bcaa378b1c1293c96d71a988b9e/ pdf/CP
1905-Dividend-Revised 2023.pdf
In line with the amended Dividend Distribution Policy of your Company, your Board
recommends a Dividend of Rs. 13.50 (270%) per equity share of Rs. 5/- each, fully paid-up
of your Company, for the financial year ended March 31, 2023. The dividend, if declared,
by the Members at the forthcoming Annual General Meeting (AGM) shall be paid to the
eligible Members of the Company from Thursday, August 24, 2023 onwards. The total payout
of aforesaid dividend would be approximately Rs. 1,735.12 Million. Pursuant to the Finance
Act, 2020 read with the Income-tax Act, 1961, the dividend paid or distributed by a
company shall be taxable in the hands of the shareholders w.e.f. April 1, 2020.
Accordingly, in compliance with the said provisions, your Company shall make the payment
of dividend after necessary deduction of tax at source at the prescribed rates. For the
prescribed rates for various categories, the shareholders are requested to refer to the
Finance Act, 2020 and amendments thereof.
GENERAL RESERVE
Your Company has not transferred any amount to the General Reserve during the financial
year ended March 31, 2023.
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 Act during the financial year ended March
31, 2023.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
In terms of Section 186 of the Act and Rules framed thereunder, details of the Loans
given and Investments made by your Company have been disclosed in Note No. 5 of the Notes
to Financial Statements for the financial year ended March 31, 2023, which forms part of
this Annual Report. Your Company has not given any guarantee or provided any security
during the year under review. The disclosure as per Rule 8(5)(xii) of the Companies
(Accounts) Rules, 2014, as amended, is not applicable to your Company.
RELATED PARTY TRANSACTIONS
During the financial year ended March 31, 2023, all transactions with the Related
Parties as defined under the Act read with Rules framed thereunder, were in the ordinary
course of business and at arm's length basis. Your Company does not have a 'Material
Subsidiary' as defined under Regulation 16(1)(c) of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 (as amended) (the "Listing
Regulations").
During the year under review, your Company did not enter into any Related Party
Transaction which requires prior approval of the Members of your Company. All Related
Party Transactions entered into by your Company had prior approval of the Audit Committee
and the Board of Directors, as required under the Listing Regulations. Subsequently, the
Audit Committee and the Board have also reviewed the Related Party Transactions on a
quarterly basis. During the year under review, there have been no materially significant
Related Party Transactions having potential conflict with the interest of your Company.
Since all Related Party Transactions entered into by your Company were in the ordinary
course of business and also on an arm's length basis, therefore, details required to be
provided in the prescribed Form AOC - 2 are not applicable to your Company. Necessary
disclosures required under the Ind AS 24 have been made in Note No. 33 of the Notes to the
Financial Statements for the financial year ended March 31, 2023.
Investor Education and Protection Fund (IEPF)
In compliance with Sections 124 and 125 of the Act read with the Investor Education and
Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF
Rules") as amended from time to time, a sum of Rs. 19,75,708/- has been deposited
into the specified bank account of the IEPF, Government of India, towards unclaimed /
unpaid dividend amount for the 15 (fifteen) month period ended March 31, 2015.
As per the IEPF Rules, the corresponding equity shares in respect of which Dividend
remains unclaimed / unpaid for seven consecutive years or more, are required to be
transferred to the Demat Account of the IEPF Authority. During the year under review, your
Company has transferred 17,090 underlying Equity Shares to the Demat Account of the IEPF
Authority, in compliance with the aforesaid Rules.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN END OF THE
FINANCIAL YEAR AND THE DATE OF THIS REPORT
Except those disclosed in this Annual Report, there are no material changes and
commitments affecting the financial position of your Company between the end of the
financial year i.e., March 31, 2023 and the date of this Report.
SUBSIDIARIES
During the year under review, no company became or ceased to be a subsidiary, joint
venture or associate of your Company. As on the date of this Report, your Company has two
wholly owned subsidiaries viz., Bata Properties Limited and Way Finders Brands Limited
(WFBL).
During the year under review, the Objects Clause of the Memorandum of Association of
WFBL was amended to enable it to, inter alia, undertake business as manufacturers
and suppliers of boots and shoes.
The Annual Reports of these Subsidiaries will be made available for inspection by any
Member of the Company at the Registered Office of your Company at 27B, Camac Street, 1st
Floor, Kolkata - 700016, West Bengal, between 11:00 A.M. and 1:00 P.M. on any working day
upto the date of ensuing AGM. The Annual Reports of the aforesaid Subsidiaries
for the financial year ended March 31, 2023, shall be provided to any Member of your
Company upon receipt of written request. Members may also send an advance request at the
e-mail id - share. dept@bata.com for an electronic inspection of the aforesaid documents.
The Annual Reports along with the Audited Financial Statements of each of the
Subsidiaries of your Company are also available on the website of your Company at www.bata.in
Pursuant to Section 129(3) of the Act read with Rule 5 of the Companies (Accounts)
Rules, 2014 (as amended), a statement containing the salient features of Financial
Statements of the aforesaid Subsidiaries (including highlights of their performance and
contributions to the overall performance of the Company) has been provided in Form AOC-1
which forms part of this Annual Report.
The Audited Consolidated Financial Statements (CFS) of your Company for the financial
year ended March 31, 2023, prepared in compliance with Ind AS issued by the Institute of
Chartered Accountants of India (ICAI) and notified by the Ministry of Corporate Affairs
(MCA), Government of India also form part of this Annual Report.
Details of the Subsidiaries are given in the Annual Return in Form No. MGT - 7 as on
March 31, 2023. The Annual Return referred to in Section 92(3) of the Act is available on
the website of your Company at www. bata.in under the tab "Investor Relations
> Annual Reports" under the link https://www.bata.in/annual- reports.html
AUDIT AND AUDITORS
Statutory Auditors
In terms of Section 139 of the Act read with the Companies (Audit and Auditors) Rules,
2014 (as amended), M/s. Price Waterhouse Chartered Accountants LLP ("PwCA")
(ICAI Firm Registration No. 012754N/N500016), Chartered Accountants was appointed as the
Auditors of your Company for a consecutive period of 5 (five) years from the conclusion of
the 89th AGM held in the year 2022 until conclusion of the 94th AGM
of your Company.
PwCA has not informed the Company regarding any condition rendering them ineligible to
continue as the Auditors of the Company in terms of the provisions of the Act and the
Rules framed thereunder. A copy of the certificate issued by the Peer Review Board (ICAI)
as required under Regulation 33 of the Listing
Regulations has been submitted by PwCA to the Company.
The reports given by the Auditors on the Standalone and Consolidated Financial
Statements of your Company for the financial year ended March 31, 2023, form part of this
Annual Report and there is no qualification, reservation, adverse remark or disclaimer
given by the Auditors in their Reports. The Auditors of your Company have not reported any
fraud in terms of the second proviso to Section 143(12) of the Act.
Secretarial Auditors
In terms of Section 204 of the Act, read with Rule 9 of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 (as amended), your Board at its meeting
held on November 10, 2022 appointed M/s. Chandrasekaran Associates, (FRN: P1988DE002500),
Company Secretaries, 11- F, Pocket - IV, Mayur Vihar Phase - I, Delhi - 110091, as the
Secretarial Auditors of your Company, to conduct the Secretarial Audit for the financial
year ended March 31, 2023 and to submit Secretarial Audit Report thereon.
The Secretarial Audit Report as received from M/s. Chandrasekaran Associates in the
prescribed Form No. MR - 3 is annexed to this Board's Report and marked as Annexure - I
and does not contain any qualification, reservation, adverse remark or disclaimer.
CORPORATE GOVERNANCE REPORT
In compliance with Regulation 34 of the Listing Regulations read with Schedule V
thereto, the Corporate Governance Report of your Company for the financial year ended
March 31, 2023 is annexed as Annexure - II and forms part of this Annual Report.
The details of Credit Rating are given in the said report.
Other disclosures required to be made under the Listing Regulations, the Act and the
Rules made thereunder, have been included in the Corporate Governance Report and / or the
Financial Statements for the financial year ended March 31, 2023 to avoid repetition in
this Board's Report.
SIGNIFICANT AND MATERIAL LITIGATIONS / ORDERS
During the year under review, there were no significant material orders passed by the
Regulators / Courts and no litigation was outstanding as on March 31,
2023, which would impact the going concern status and future operations of your
Company. The details of litigation on tax matters are disclosed in the Auditor's Report
and Financial Statements which form part of this Annual Report. During the year under
review, no Corporate Insolvency Resolution application was made or proceeding was
initiated, by / against Bata India Limited under the provisions of the Insolvency and
Bankruptcy Code, 2016 (as amended). Further, no application / proceeding by / against Bata
India Limited under the provisions of the Insolvency and Bankruptcy Code, 2016 (as
amended) is pending as on March 31, 2023.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
In compliance with Section 134(3)(m) of the Act read with Rule 8 of the Companies
(Accounts) Rules, 2014 (as amended), a statement containing information on conservation of
energy, technology absorption, foreign exchange earnings and outgo of your Company, in the
prescribed format, is annexed to this Board's Report and marked as Annexure - III.
MANUFACTURING AND SOURCING
Your Company has an elaborate system-driven compliance programme in place, inter alia,
for thorough pre-review of the on-boarding procedure in case of a new manufacturing
partner in-sourcing and also for an associate manufacturer for its own factories. This
includes clearance of documents and a detailed compliance audit prior to approval. With
respect to Social & Environmental Responsibility (SER) audits of its value chain
sourcing partners, 58 audits were performed in 2022, resulting in a total average score of
88.6%. The factories have been audited by third party auditors and vendors are audited by
Bata's internal auditors to check their level of compliance.
Your Company has engaged "Lexplosion" for providing support on the statutory
and progressive compliances. The software provides real-time data visibility and a
compliance dashboard. Benchmarks have been achieved for factory in the fields of Quality
Management Systems (ISO 9001:2015) & Environment Management Systems (ISO 14001:2015).
In August 2022, the largest manufacturing plant of your Company received ISO 45001:2018
certification on Occupational Health & Safety.
Your Company was recognised in June 2022 by Winner Award (under Large Industry
Category)
under the ZED stream (Zero defect in Manufacturing & Zero Effect on Environment),
in the CII National ZED Competition and subsequently in November 2022, in the fields of
Environment, Cost Savings, and quality. Our Products meet the optimal Quality
Specifications and the systematic approach towards Zero Defect by implementation of DMAIC
process for continuous improvement and sustainable development.
To remain competitive, your Company continues to focus on innovation. "Life
Natural" antimicrobial material is offered for School shoes (Tennis, Naughty Boy,
Scout Ballerina and Hawaii Flip-Flop).
Under Sustainable initiatives, your Company converted the fuel from HSD to gas for
Thermopack, thereby, potentially reducing CO2 and SO2 emissions. Your Company also
implemented 3R (PVC, Rubber & EVA, Laminated Textile waste, along with reduction
initiatives like LED, Motion Sensors, efficient air compressors, VFD/Servo motors, Turbo
ventilators, integrated APFC electrical panels) initiative of "Reduce, Reuse &
Recycle" program. Additionally, your Company also have set-up Zero Discharge
facilities, Sewage Treatment Plants and Rain-Water Harvesting in various units.
Your Company continued its focus on capability and capacity development of indigenous
suppliers to reduce lead time and cost. Sourcing was taken nearer to the demand areas for
some products. Sourcing strategies of L2L, import substitution, etc., to support
Speed-to-Market, continue to contribute significantly to lead time reduction as well as in
improving margins.
RESEARCH AND DEVELOPMENT ACTIVITIES AND ENERGY CONSERVATION
Research and Development activities during the year under review continued to emphasise
on creating a pollution-free and a safe work environment. Technological improvement in
product development, material development, introduction of new footwear moulds, process
improvement, etc., were the key focus areas to improve quality of footwear and
productivity in manufacturing. Your Company developed Nail Penetration Resistance Safety
Boot as per BIS norms IS 15298-Part 2: 2016.
An expenditure of Rs. 63.72 Million was incurred on Research and Development (including
product development initiatives) during the year under review, as against Rs. 40.61
Million during the financial year 2021-22.
Your Company achieved reduction of air pollution and emissions at Batanagar Factory by
Briquette Consumption of 794 Ton. Your Company shall continue to invest on Research and
Development activities and energy saving measures in its manufacturing units.
Further information on conservation of energy and technology absorption are annexed to
this Report and marked as Annexure - III.
CORPORATE SOCIAL RESPONSIBILITY
Your Company operates on the belief that an organisation should exist to serve a social
purpose and enhance the lives of people connected through its business. Your Company has a
CSR Policy in place which aims to ensure that your Company continues to operate its
business in an economically, socially and environmentally sustainable manner, while
recognising the interests of all its stakeholders. It takes up CSR programmes which
benefit the communities in and around the vicinity of its operational presence, resulting
in enhancing the quality of lives of the people in those areas.
Your Company continued to demonstrate its social commitment to the communities in and
around which it operates. Our community interventions have been aligned with global
Sustainable Development Goals (SDGs), primarily on good health & wellbeing, quality
education, reducing inequalities and leveraging partnerships for success.
Details of composition of CSR Committee and other relevant details have been provided
in the Corporate Governance Report.
A sum of Rs. 25,954,243 (inclusive of amount required to be set-off and excess amount
spent for the financial year ended on March 31, 2023) was spent on various CSR initiatives
(covered hereinafter in this Report) for the financial year ended on March 31, 2023. The
unspent amount of Rs. 96,22,393 is towards certain ongoing projects and has been
transferred to Unspent CSR Account as per Section 135(6) of the Act. The Annual Report on
CSR activities, containing details of CSR expenditure, details of excess amount spent,
etc., is appended as Annexure - IV to this Report.
The salient features of the CSR Policy of your Company is appended as Annexure - V to
this Report and the complete policy has been uploaded on the website of your Company at
www.bata.in under the tab "Investor Relations >
Company Policies" at https://www.bata.in/on/
demandware.static/-/Sites-bata-in-Library/default/
vca1a6dc6c6c9dd1e1b2bd451ba8726ee06c054d7/ Staticpagesimages/Company%20Policies/CSR-
Policy-Bata-India-Ltd-2021.pdf
There has been no change in the CSR Policy during the year under review.
Promoting Education
Bata Children's Program
Your Company continued to support children under our Global Bata Children's Programme
(BCP), wherein we reached out to 4,000+ children and actively drove back to the school
program. BCP Program focused on their academics, STEM Learning, Foundational Literacy
& Numeracy, sports, mental health & wellbeing and conducting counseling sessions.
We addressed the basic needs of the children by building classrooms, setting up a dining
space, etc., to provide a cordial environment for studies.
During the year under review, your Company also focused on Foundational Literacy and
Numeracy among primary school children to impart grade level efficiency across the state
of Haryana. Your Company is ensuring effective implementation of Nipun Haryana Mission
through the state level partnered agency as a multi-year project.
Stride with Pride
Our Stride with Pride program was revamped wherein sustainability was given a focus
while serving the needs of the underserved. It also focused on the importance of foot care
and means to ensure it; around 2000 beneficiaries were sensitised.
Environment Sustainability Projects
Understanding the importance of environment conservation, Bata took up environment
sustainability projects - Solar Powering of 2 schools and setting up Rain Water Harvesting
Structure in 3 schools. This multi-year project is projected to reduce, upon
implementation, around 700 tonnes of Carbon Emission which is equivalent to planting
around 1100 trees in the next 25 years.
Girl Child Support
Bata implemented one of the most needed programs on Menstrual Hygiene & Awareness
wherein your Company addressed the availability of Sanitary Facilities, awareness about
myths related to Menstrual Health and the importance of nutrition
for good health & well-being. The program focused on the eco-system by sensitising
adolescent girls, boys, teachers, parents and school management committees.
Bata Heroes - Employee Volunteering
While addressing the needs of the community through CSR initiatives, your Company also
encourages its employees to participate in the cause through employee volunteering. It is
a core objective to make employee volunteering a self-driven culture of the organisation.
Thus, in a planned manner, your Company curated activities for employees to contribute,
such as organising / conducting activities / sessions on remarkable days like World Health
Day, Earth Day, Children's Day, Christmas, etc. Bata employees also participated in the
winter donation drive and supported other charities for a cause.
Your Company made significant strides to harness all its resources towards successful
execution of the CSR projects across all locations.
SUPPORT FROM BATA SHOE ORGANIZATION
Your Company continues to receive support from the Holding Company - Bata (BN) B.V.,
Amsterdam, The Netherlands and also from Bata Shoe Organization (BSO). Your Company also
enjoys the benefits of technical research through Global Footwear Services Pte. Ltd.,
Singapore (GFS). Your Company has renewed the Technical Collaboration Agreement with GFS
with effect from January 1, 2021 for a period of ten years. In terms of the said
Agreement, your Company receives guidance, training of personnel and services from GFS in
connection
with research & development, marketing, brand development, footwear technology,
testing & quality control, store location, layout & design, environment, health
& safety, risk & insurance management, etc. Your Company continues to obtain
expertise and experience from the personnel of GFS and other BSO group companies to
improve its product range and operational processes throughout the year. In terms of the
said Agreement, your Company has paid technical services fee of Rs. 387.97 Million to GFS
for the financial year ended March 31, 2023, which is around 1% of the Turnover of your
Company.
BOARD OF DIRECTORS, BOARD MEETINGS AND KEY MANAGERIAL PERSONNEL
Composition
Your Company's Board is duly constituted and is in compliance with the requirements of
the Act, the Listing Regulations and provisions of the Articles of Association of your
Company. Your Board has been constituted with requisite diversity, wisdom, expertise and
experience commensurate to the scale of operations of your Company.
Meetings
During the year under review, a total of 7 (seven) Meetings of the Board of Directors
of your Company were held, i.e., on May 25, 2022, August 11, 2022, September 22, 2022,
November 10, 2022, December 12, 2022, January 19, 2023 and February 14, 2023. Details of
Board composition and Board Meetings held during the financial year 2022-23 have been
provided in the Corporate Governance Report which forms part of this Annual Report.
Changes in Board Composition
Details of changes in the Board Composition during the year under review are as under:
Sl. No. |
Name of the Directors |
Designation & Category |
Reasons and date of
appointment / re-appointment |
1. |
Mr. Gunjan Shah (DIN: 08525366) |
Managing Director and Chief
Executive Officer (Executive) |
Appointed as the Managing
Director w.e.f. October 1, 2021, at the 89th AGM held on August 12, 2022. |
2. |
Ms. Kanchan Chehal (DIN:
09263584) |
Director HR and CHRO
(Executive) |
Appointed as Whole-time
Director w.e.f. August 16, 2021, liable to retire by rotation, at the 89th AGM
held on August 12, 2022. |
3. |
Mr. Shaibal Sinha (DIN:
00082504) |
Non-Executive Director |
Retired by rotation and
re-appointed pursuant to Section 152(6) of the Act at the 89th AGM held on
August 12, 2022. |
With effect from the end of business hours on September 30, 2022, Ms. Kanchan Chehal
(DIN: 09263584), has relinquished her position as Whole-time Director of your Company in
order to take up a Global role with Bata Group. She continues to serve as a Non-Executive
Non-Independent Director.
With effect from the end of business hours on November 11, 2022, Ms. Vidhya Srinivasan
(DIN: 06900413), has relinquished her positions as Director Finance and CFO of your
Company in order to pursue opportunities outside.
Your Board at its Meeting held on April 25, 2023, approved the following, subject to
approval of the Members of your Company through Postal Ballot:
1. Appointment of Mr. Anil Ramesh Somani (DIN: 10119789) as a Whole-time Director,
designated as Director Finance and CFO (KMP) of your Company, liable to retire by
rotation, for a period of 5 (five) consecutive years commencing from April 25, 2023.
2. Appointment of Mr. Ravindra Dhariwal (DIN: 00003922) as a Non-Executive
Non-Independent Director of your Company, liable to retire by rotation, for a period of 2
(two) consecutive years commencing from May 27, 2023.
Your Board has also recommended the reappointment of Mr. Ashok Kumar Barat (DIN:
00492930) as an Independent Director of your Company, for a second term of 5 (five)
consecutive years commencing from December 17, 2023.
At the said meeting, your Board has also approved the Postal Ballot process to seek
Members' consent for the above appointment(s) / re-appointment(s). Further details in this
regard are given in the Corporate Governance Report annexed hereto and forming part of
this Report.
In order to pursue opportunities outside Bata Group, Mr. Alberto Toni (DIN: 08358691)
has stepped down as Director in your Company. The same is effective from the close of
business hours on May 18, 2023.
The Board places on record its appreciation for the valuable contributions made by the
directors during their respective tenure.
Other Information
Other details pertaining to the Directors, their appointment / cessation during the
year under review and their remuneration are given in the Corporate Governance Report
annexed hereto and forming part of this Report.
Director seeking appointment / re-appointment
Ms. Kanchan Chehal (DIN: 09263584), Non-Executive Non-Independent Director of your
Company, is liable to retire by rotation at the ensuing AGM and being
eligible, has offered herself for re-appointment. Your Board recommends her
re-appointment as a Director (Non-Executive Non-Independent) of your Company, liable to
retire by rotation. Further details alongwith necessary disclosure(s) in respect of Ms.
Chehal have been given in the Notice convening the 90th AGM of your Company.
Key Managerial Personnel
As on the date of this Report, Mr. Gunjan Shah (DIN: 08525366), Managing Director and
Chief Executive Officer, Mr. Anil Ramesh Somani (DIN: 10119789), Director Finance and
Chief Financial Officer and Mr. Nitin Bagaria (ACS-20228), Company Secretary &
Compliance Officer are the Key Managerial Personnel (KMP) of your Company.
Based on the recommendation / approval of the Nomination and Remuneration Committee and
the Audit Committee of the Board, Mr. Anil Ramesh Somani was appointed by your Board as
the Chief Financial Officer (KMP) of your Company, with effect from April 3, 2023. He was
subsequently appointed as a Whole-time Director of your Company, with effect from April
25, 2023.
During the year under review, Ms. Vidhya Srinivasan ceased to be a KMP, details of
which are given above.
Declaration by Independent Directors
The Independent Directors of your Company have submitted requisite declarations that
they continue to meet the criteria of Independence as laid down in Section 149(6) of the
Act and Regulations 16(1)
(b) and 25(8) of the Listing Regulations and there is no change in the status of their
Independence and have confirmed that they are not aware of any circumstance or situation
which exists or may be reasonably anticipated that could impair or impact their ability to
discharge their duties.
The Independent Directors of your Company are in compliance with the requirements under
Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014 (as
amended).
The Board of Directors further confirms that the Independent Directors also meet the
criteria of expertise, experience, integrity and proficiency in terms of Rule 8 of the
Companies (Accounts) Rules, 2014 (as amended).
Committees of the Board
Pursuant to various requirements under the Act and the Listing Regulations, the Board
of Directors
has constituted various committees, such as, Audit Committee, Nomination and
Remuneration Committee, Stakeholders Relationship Committee, Risk & Compliance
Management Committee and Corporate Social Responsibility Committee. The details of
composition, terms of reference, etc., pertaining to these committees are mentioned in the
Corporate Governance Report which forms part of this Annual Report.
The Board has constituted a committee, namely, Business Operations Committee to
primarily look into day-to-day matters relating to retail stores, banking, etc. The Board
has also constituted dedicated committees, namely, Real Estate Committee and Technology
Committee. The Real Estate Committee is primarily responsible to review, recommend and
assist the Board on all matters and transactions relating to the Real Estate of your
Company.
The Technology Committee primarily acts as a counsel and assists on Technology
Strategies to the Board. It also conducts periodic appraisal of Technology Projects of
your Company.
COMPLIANCE WITH SECRETARIAL STANDARDS
During the year under review, your Company has duly complied with the applicable
provisions of the Revised Secretarial Standards on Meetings of the Board of Directors
(SS-1) and General Meetings (SS- 2) issued by the Institute of Company Secretaries of
India (ICSI).
AUDIT COMMITTEE
The Board of Directors of your Company has duly constituted an Audit Committee in
compliance with the provisions of Section 177 of the Act, the Rules framed thereunder read
with Regulation 18 of the Listing Regulations. The recommendations made by the Audit
Committee are accepted by your Board.
Name of the Audit Committee members, number of meetings held during the year under
review, terms of reference and other requisite details have been provided in the Corporate
Governance Report which forms part of this Annual Report.
NOMINATION AND REMUNERATION POLICY
Your Board has adopted a Remuneration Policy for identification, selection and
appointment of Directors, Key Managerial Personnel (KMPs) and Senior Management Personnel
(SMPs) of your Company. The Policy provides criteria for fixing remuneration of the
Directors, KMPs, SMPs as well
as other employees of your Company. The Policy enumerates the powers, roles and
responsibilities of the Nomination and Remuneration Committee. There has been no change in
the said Policy during the year under review. However, your Board at its Meeting held on
April 25, 2023, amended the provisions relating to appointment of directors and their
remuneration in the said Policy.
Your Board, on the recommendations of the Nomination and Remuneration Committee,
appoints Director(s) of your Company based on his / her eligibility, experience and
qualifications and such appointment is approved by the Members of the Company at General
Meetings. The Policy also provides for Board Diversity criteria.
The amended Policy (containing the changes made therein) is appended as Annexure -
VI and has been uploaded on the website of your Company at www. bata.in under
the tab "Investor Relations > Company Policies" at https://www.bata.in/company-policies.html
and is available at the link https://www.bata.in/on/
demandware.static/-/Sites-bata-in-Library/default/ v4630e105168980f045e35a4a408a4a6d759e76c0/
pdf/250423-Bata-Nomination-and-Remuneration- Policy%202023.pdf
Your Company conducts a Board Evaluation process for the Board of Directors as a whole,
Board Committees and also for the Directors individually through self-assessment and peer
assessment. The details of Board Evaluation process for the financial year 2022-23 have
been provided in the Corporate Governance Report which forms part of this Annual Report.
DISCLOSURES ON REMUNERATION OF DIRECTORS AND EMPLOYEES OF THE COMPANY
Details as required under Section 197(12) of the Act read with Rules 5(1), 5(2) and
5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
(as amended), are annexed to this Board's Report and marked as Annexures - VII and VIII.
Further, the Non-Executive NonIndependent Directors of your Company (who are a part of BSO
/ Bata Group in any executive capacity) do not accept any sitting fees / commission.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134 of the Act, the Directors, to the best of their knowledge and
belief, hereby confirm that:
(a) in the preparation of the annual accounts, the
applicable accounting standards had been followed;
(b) they have selected such accounting policies and applied them consistently and made
judgments and estimates that are reasonable and prudent so as to give a true and fair view
of the state of affairs of the Company as at March 31, 2023 and of the profit of the
Company for that period;
(c) they have taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of the Act for safeguarding the
assets of the Company and for preventing and detecting fraud and other irregularities;
(d) they have prepared the annual accounts on a going concern basis;
(e) they have laid down internal financial controls to be followed by the Company and
that such internal financial controls are adequate and are operating effectively; and
(f) they have devised proper systems to ensure compliance with the provisions of all
applicable laws and such systems are adequate and operating effectively.
WHISTLE BLOWER POLICY / VIGIL MECHANISM
In terms of Section 177 of the Act and Rules framed thereunder read with Regulation 22
of the Listing Regulations, your Company has a Whistle Blower Policy / Vigil Mechanism in
place for the Directors and Employees of your Company through which genuine concerns
regarding various issues relating to inappropriate functioning of the organisation can be
raised. A Vigil Mechanism Committee under the Chairmanship of the Audit Committee Chairman
is also in place. Any concern relating to impact on human rights or issues caused by the
business shall also be addressed by the said committee. The Whistle Blower Policy has been
uploaded on the website of your Company at www.bata.in under the tab "Investor
Relations > Company Policies" at https://www.bata.in/company-policies.html
and is available at the link https://www.bata.in/on/
demandware.static/-/Sites-bata-in-Library/default/
vca1a6dc6c6c9dd1e1b2bd451ba8726ee06c054d7/ Staticpagesimages/Company%20Policies/Whistle-
Blower-Policy.pdf
The Policy provides access to the Legal Head of your Company and to the Chairman of the
Audit Committee. No person has been denied an
opportunity to have access to the Vigil Mechanism Committee and the Audit Committee
Chairman.
CONFIRMATION OF COMPLIANCE ON PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company is committed to provide a safe and secure environment to its women
employees across its functions and other women stakeholders, as they are considered as
integral and important part of the organisation.
In terms of Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013 (as amended) and Rules framed thereunder, your Company has duly
adopted a Policy and has also complied with the provisions relating to the constitution of
Internal Complaints Committee (ICC). A summary of the complaints dealt during the
financial year ended March 31, 2023, in terms of the said Act and Rules framed thereunder
has been provided in the Corporate Governance Report which forms part of this Annual
Report.
Your Company has been conducting awareness campaign across all its manufacturing units,
warehouses, retail stores and office premises to encourage its employees to be more
responsible and alert while discharging their duties.
RISK MANAGEMENT AND ADEQUACY OF INTERNAL FINANCIAL CONTROLS
Your Company's internal financial controls ensure that all assets of your Company are
properly safeguarded and protected, proper prevention and detection of frauds and errors
and all transactions are authorised, recorded and reported appropriately. Your Company
operates through definitive Chart of Authorities (COAs) and Standard Operating Procedures
(SOPs) in respect of its operations including financial transactions. Such COAs and SOPs
are regularly monitored and if required, modified from time to time depending on business
requirements.
Your Company has an adequate system of internal financial controls commensurate with
its size and scale of operations, procedures and policies, ensuring orderly and efficient
conduct of its business, including adherence to the Company's policies, safeguarding of
its assets, prevention and detection of frauds and errors, accuracy and completeness of
accounting records, and timely preparation of reliable financial information.
Such practice provides reasonable assurance that transactions are recorded as necessary
to permit
preparation of Financial Statements in accordance with the applicable legislations and
that the same are well within the COAs and SOPs, without exception. Your Company also
monitors, through its Internal Audit Team, the requirements of processes in order to
prevent or timely detect unauthorised acquisition, use or disposition of the Company's
Assets which could have a material effect on the Financial Statements of the Company. The
Internal Audit function is responsible to assist the Audit Committee and Risk &
Compliance Management Committee (RCM Committee) on an independent basis with a complete
review of the risk assessments and associated management action plans.
Risk Management is embedded in the Company's operating framework. Your Company believes
that risk resilience is key to achieving higher growth. To this effect, there is a robust
process in place to identify key risks across the Company and prioritise relevant action
plans to mitigate these risks. Risk Management framework is reviewed periodically which
includes discussing the management submissions on risks, prioritising key risks and
approving action plans to mitigate such risks. An assessment of cyber security has also
been carried out in compliance with the requirement of the Listing Regulations and a
mitigation plan has been made to counter such risks.
The Internal Audit Report and Risk Inventory Report are reviewed periodically by the
Audit Committee and the RCM Committee respectively. The Chief Internal Auditor is a
permanent invitee to the Audit Committee Meetings and a member of the RCM Committee. The
Audit Committee advises on various risk mitigation exercises on a regular basis. Your
Company has been maintaining a separate Internal Audit Team headed by the Chief Internal
Auditor appointed by the Audit Committee of your Board.
Further details pertaining to the RCM Committee and Meetings held during the year under
review are given in the Corporate Governance Report. Your Board is of the opinion that the
Internal Financial Controls, affecting the Financial Statements of your Company are
adequate and are operating effectively.
NON-APPLICABILITY OF MAINTENANCE OF COST RECORDS
The Central Government has not prescribed the maintenance of cost records under Section
148(1) of the Act and Rules framed thereunder with respect to the Company's nature of
business.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Industry Structure and Developments
India is globally the second largest footwear producer and consumer in the World. The
Footwear Industry also generates substantial employment with nearly 40% of the people
employed in the Industry being women. The Indian footwear market amounted to over USD 23
Billion in 2022, driven by demand for branded, premium, trendy yet functional and
comfortable footwear.
Economists expect the market to grow at a CAGR of 6.7% in 2022-2027 with domestic
footwear consumption contributing around 90% of indigenous manufacturing. Increasing
penetration of smart phones and internet connectivity is further propelling footwear
sales.
Consumer sentiments have revived swiftly from the pandemic shock and the domestic
footwear market is seeing growth. Exponential growth in the domestic travel and gradual
return of corporate travel have also played a significant role in the demand for footwear.
Factors like younger population, rise in standard of living, shift from unbranded to
branded footwear, increasing women workforce participation, increasing trend of owing
occasion wear and penetration of online marketplaces continue to drive demand for footwear
in India.
Opportunities and Threats
The Indian footwear market continues to remain under-penetrated as against the global
average. Economists predict the per capita footwear consumption to increase to ~2 - 2.1
pairs by 2025 from the current consumption of ~1.9 pairs. This would still be much below
the global average of 3 pairs.
One major factor contributing to the growth of the Indian footwear industry is the
increasing demand for footwear in the domestic market. The increasing population and
rising disposable income of consumers are leading to higher purchase of footwear.
Additionally, rising smart phone penetration, increasing digital payments and awareness
about online shopping, better variety and lucrative deals offered has led to increase in
online sales.
Footwear consumption has evolved from being need- based to trend-based with women
preferring higher lifestyle products. With increasing participation of women in the
workforce and higher incomes,
footwear segment is expected to witness strong growth. Women's and kids segment
continue to be the fastest-growing categories with increasing share in overall footwear
market.
India is at the intersection of sports, fitness, fashion and the casualisation of
lifestyle. Consumer demand for casual footwear is driving growth. Further, within the
Indian Footwear Industry, the organised footwear retail is expected to grow to ~40% of the
industry by 2025 on the back of factors like:
a) Shift in the perception of footwear to a fashion statement from a utility product.
b) Rapid urbanisation, opening of shopping malls in Tier 3 - 5 cities, higher
aspiration levels for branded products.
c) Digital penetration for branded footwear and rising brand awareness through
marketing.
d) Emergence of value products and improved penetration of EBOs in Tier 3 - 5 cities
and smaller towns.
e) Increased share of e-commerce to reach customers across varied age and income
profiles.
f) Enhancing customer experience.
g) Surge in demand for sports and athleisure footwear with increasing focus towards
sports and events such as marathons and adventure trips.
However, higher inflation and tightening financial conditions in India may impact
demand. With increasing consumer demand, the rise of e-commerce and supportive government
policies, the industry is expected to experience significant growth in the coming years.
To accelerate growth and expansion, your Company continues to work on multiple
initiatives - Driving Portfolio Evolution, Accelerating Expansion via Franchise &
Distribution, Marketing Investments, Exploding Digital Footprint, Agile & Efficient
Supply Chain, Staying nimble on costs with Talent, Process, Technology investments at the
core.
Your Company is working aggressively on increasing its presence in Tier 3 - 5 cities
through opening of franchise stores and distribution network.
Your Company also has opportunities in the I&D business, as Bata is the only player
which is present across categories and price points. However, the competition continues to
grow with unorganised sector moving into organised space.
Apart from the above, casualisation and
premiumisation of product portfolio, innovation, scaling up digital channels and
productivity enhancement will continue to be the priority of your Company along with
investments in our brands and stores.
Key Focus Areas Marketing and Campaigns
Bata India continues to remain a strong brand in the footwear industry by consistently
delivering on fashion trends with the promise of comfort. The strategic growth levers were
amplified by your Company through extensive research and consumer insight-led marketing
campaigns. The marketing initiatives, focused on delivering the message of exceptional
value to the customers, helped Bata maintain its strong brand image in a highly
competitive market.
Sneaker culture has become a global phenomenon, making inroads into mainstream fashion
amongst the Gen Z and Millennials. In order to offer a large variety to choose from under
one roof, your Company launched a vibrant and groovy campaign 'Unlimited Sneakers at Bata'
which put forth the proposition of 300+ Sneaker styles from 9 brands. The Sneaker Studio
concept which piloted and was widely accepted last year, was rolled out to over 530 Bata
and Franchise stores during the year under review.
During the year under review, Bata became the first footwear brand in India to bring
the disruptive format of 3D OOH advertising. Made to engage with the Gen Z and
Millennials, the hyper-realistic billboard created a visually compelling story for Bata's
Sneaker Studio.
We set out to strengthen Bata's proposition of being a fashion-forward brand that
offers a fitting blend of style and comfort. To resonate with the Gen Z and Millennials
target audience, Bata's brand ambassador Bollywood actor Ms. Disha Patani became the face
of the Brand for fashion, casual and sneaker collections.
Catering to the consumer trends of casualisation, we launched the 24x7 Casual
Collection with the 360-degree campaign - 'It's Got To Be Bata' with Ms. Disha Patani.
Both the collection and the campaign derived inspiration from the versatile roles that
women play today while never compromising on style.
To strengthen the Brand with young leaders of the corporate world, we launched Neo
Casuals for Neo Leaders campaign highlighting the new casual range for Hush Puppies. The
campaign was based on
consumer trends, changes in leadership codes and listening to corporate consumers to
enhance Bata's resonance and aspirational value among the target group. It celebrated the
Neo Leaders of today who have been at the forefront of propelling positive change and
inspiring others with their progressive and exemplary leadership style.
During the festive season, 'Impressions Collection' campaign was derived from the
consumer insight that great shoes can get one noticed and kick-start conversations at
get-togethers and parties, leaving a lasting impression. Featuring Bollywood's fashion and
youth icon Mr. Kartik Aryan, the campaign highlighted Bata's stylish collection for the
wedding and festive season from brands like Bata, Bata Red Label, Marie Claire, Hush
Puppies and Naturalizer.
Bata's digital campaigns and engagement with fashion, lifestyle and entrepreneurial
influencers throughout the year, reached over 250 million potential audiences. Bata's
marketing efforts were recognised by the industry through awards like E4M Pitch for Top 50
Brands and IPRCCA for Best Influencer Impact- Social Media/PR & Thought Leadership.
The marketing campaigns successfully positioned Bata as a leader in the footwear
industry, showcasing its commitment to provide customers with comfortable, stylish and
versatile footwear.
Consumer Experience
In order to bring innovative ways to engage with the audience and integrate technology
at every step of the consumer journey, your Company renovated 140+ stores during the year
under review, with upgraded music and jukebox innovation that allows shoppers to play
their favourite songs as they browse the new fashion and casual collections. In select
stores, 3D Holographic Unit, Lift & Learn Technology, Digital LED screens and QR codes
for online experiences were introduced.
Bata launched the first Augmented Reality Sneaker Studio on Bata.in allowing users to
try sneakers on their feet virtually using AR. It brings an 'endless aisle' of sneakers to
life as customers can superimpose shoes on their feet, try multiple options, share with
their friends and place orders from the same interface. Bata was amongst one of the first
footwear brands to bring these features at such a scale across website and stores in
India.
Bata's latest innovation is the AR Try On feature on
Bata.in enabling the users to try on different sneaker styles virtually by simply
selecting the shoe and pointing their mobile phone's camera to their feet.
Innovation - Products
During the year under review, as consumers returned to a more balanced lifestyle, with
work from office, celebrations and socialising back on the agenda, your Company presented
an equally varied footwear assortment for the season. Red Label & Marie Claire styles
gained market share at retail level, as fashion categories witnessed revival in demand,
with the boom for fitness and outdoor wear normalising that emerged during the pandemic.
Sneakers continued to be the dominant category for your Company. Futuristic, innovative
and more premium iterations of Power Brand provided newness, while lifestyle inspired
North Star looks remained the key. XORISE +500 GT with Tunnel system was quite a popular
style. It delivered - Comfort, Cushioning & an amazing rebound with an upper
constructed with Technical Engineered Mesh and a special outsole that provides 50% better
traction.
"Floatz" - a casual, washable and comfortable footwear saw extreme popularity
as more consumers prioritised time spent in nature or at home. During the year under
review, your Company launched Floatz 2.0 collection which comes with a bright dual colour
sideband, added anatomical support, +50% more cushioning and are extremely light-weight
and flexible.
Your Company maintained its focus on formal wear as an increasing number of employers
announced return-to-office for their workforce.
Bata Club
Bata Club continues to be the strongest pillar for driving footfall and business. Your
Company continues to invest in new technology like machine learning & AI science to
drive propensity modelling, cross and same category recommendation and optimized
one-to-one communication for "Right customer at Right time". Automation of
campaigns was done on different lifecycle segments to drive customers back into stores and
online to make a repeat purchase and thereby increasing the active user base.
More focused approach on data science technologies and Omni-channel strategy, led to a
28% increase in active user base over the last year.
Segment wise or product wise performance
Your Company operates in Footwear & Accessories Segment only and performances of
major business categories and key brands of your Company during the financial year ended
March 31, 2023 are highlighted below:
Retail Business
Since end of 2021, your Company witnessed significant uptick in demand and revitalised
its operations across geographies. Your Company continued its expansion drive through
Franchisee & COCO Model. The year saw good traction in terms of opening of new stores.
A total of 116 Franchisee Stores were opened during the year under review, taking the
total to 400+ Franchisee Stores. With 'Shop in Shops' (SIS), your Company made deeper
forays into major Departmental Stores. Overall store count crossed 2000 mark during the
year under review and is a major milestone in the history of your Company. During the year
under review, your Company renovated 140+ stores.
Enhancement of Customer Experience remained at the core of your Company and with
continuous improvements, a Net Promoter Score of 80 was achieved for the year. To improve
customer experience, your Company introduced New Avatar Stores in RED 2.0 Model by
renovating stores.
Bata Shoe Care and Bata Shoe Spa were introduced in select stores. Option of Digital
receipts were given to the customers wherein they can also have visibility of the Loyalty
program.
We continued our focus on controlling our costs related to retail store expenses and
generated substantial savings by negotiating rents across our stores.
Your Company also focused on creating the right environment for team development and
training. In order to focus our efforts towards that direction, your Company launched Step
Up program for Store Managers, District Managers and Retail Managers. We also introduced
"Udaan" for the development and growth of the Store Sales Teams. The Infinity
Incentive introduced during the year made sure that store teams stay motivated and put
their best foot forward. We also took a strong step towards improving our diversity ratio
at all levels within our teams.
Digital Multi-Channel Business
E-commerce business continued its steady growth path during the year under review.
Bata.in platform migration to Salesforce Commerce Cloud has stabilised and have started
to show impact on the business growth. Better merchandise assortment display has led to
higher ASPs and margin improvements. Bata.in also piloted the Chatbot and Virtual Try-On
launch to provide a better engagement and immersive user experience.
In addition, Home Delivery Services initially offered only in over 1200 COCO stores,
now have been extended to select Franchisee stores as well on a pilot basis. This will
open up the complete product catalogue to a Franchisee customer as well. Home Delivery
continues to contribute around 1 million pairs of sales in a year.
B2B business has been steady on Amazon and Flipkart with sharp focus on growth
opportunities across categories and brands.
Investment in technology integrations improved customer experience on Bata.in, Returns
and Refunds and also led to significant reduction in customer complaints.
BATA Comfit Ladies
Comfit Ladies continues to be a promising brand in our portfolio offering unparalleled
comfort with style. Your Company introduced newer generation of Active Walk Collection,
called Active 2.0. Overall, the collection can be divided into Classic and Active, wherein
Classic has wedges, blocks and the Active has chunky white outsoles.
BATA Red Label
Ladies Red Label offers most stylish, trendy run-way fashion shoes in various styles
featuring colours of the season. This brand will also feature the Ethnic Collection in
various heel heights, heel designs, bridal collection colours along with the existing
Evening Collection.
Hush Puppies
In Hush Puppies, your Company continues to focus on technology and comfort as a part of
product expansion strategy. With introduction of new product technologies like Bounce Max,
Bounce, Bounce Plus and Deep Comfort, the Brand has ensured the right blend of technology
and comfort. With changing consumer trends, Hush Puppies has been increasing its focus on
casual shoes. In order to meet the aspirational lifestyle needs of consumers, the Brand
has also introduced the premium footwear range which has become the epitome of style and
comfort.
The new range for men and women boasts of new age casuals, heels and ballerinas in
finest quality leather, High-end knitted fabrics and soft colorful suede for men and
women.
The multichannel, Hush Puppies Brand expansion is also driven by right consumer
traction and right wardrobe fitment for the loyal consumer base that the Brand enjoys.
Non-Retail Business
Your Company's non-retail business division comprises of Multi-Brand Outlets, Key
Accounts, industrial and institutional business divisions and exports. With the change in
consumer behavior as well as Trade Dynamics, we have made changes to provide better
service to our Trade Partners and Consumers. We continue to focus on select categories
like School and Men's closed where we have advantages and also on casualisation through
Sneakers.
Overall health of the business has improved inspite of sluggish market and your Company
is gaining market share.
Bata availability in MBO is now in 1200+ towns and 550+ enterprises provide Bata shoes
to their Employee/Customers through our B2B Division.
Outlook
The current global economic state, inflation and rising rentals due to boom in
commercial real estate market pose challenges to the Indian Footwear Market. Your Company
continues to keep its pace with its customers and evolve in every aspect including styles,
footwear segments and comfortable yet stylish portfolio.
Customer aspirations are raising towards branded products and with opening of shopping
malls in smaller towns, customers expect the same experiences as those in Metros. Adoption
of social media by youth has given an opportunity to brands to reach the consumers
directly through targeted campaigns. Accordingly, your Company is expanding its physical
footprint, especially in Tier 3 - 5 cities, through MBO route as well as through Franchise
route and its digital footprint through its own website and marketplaces. Your Company is
communicating with the customers with focus on relevant content and to target new
audiences on social platforms and reach further into Tier 3 - 5 cities.
Your Company is also working on the brand appeal
amongst Millennials and the Gen Z. Your Company is strategically positioned to harness
the present challenges, given the strength of its Brand, innovation capabilities, retail
foothold and growing online presence in footwear and accessories category. Your Company
continues to implement various cost- savings measures across the network and is actively
fleshing out new opportunities across the value chain to capture the emerging consumer
demand efficiently.
With regard to online sales, your Company expects to see its digital sales outpace
overall growth and plans to have a robust approach whether it is through D2C channel,
E-commerce platforms or Omnichannel approacheswhich are a big hit amongst the
customers.
Risks and Concerns and Contingent Liabilities
Your Company acknowledges the footwear industry is undergoing transformation. Customer
needs & expectations from footwear industry, purchasing channels and buying habits
have evolved. New expectations around customer experience/ product discoverability are
influencing business growth drivers and key initiatives. Your Company acknowledges the
fact that competition from both domestic and international players, especially at the
bottom of the pyramid, is increasing with every passing day.
Your Company acknowledges that continuous evolution of the product portfolio mix is
required to maintain relevance of Bata Brand amongst Millennials and the Gen Z. Your
Company also realises that modernisation of I.T. systems alongwith having suitable
protection from risk of loss / theft of data / other vulnerabilities is a key requirement
for business continuity and continuous customer service. Your Company continuously adapts
to comply with relevant changes in the Government laws and policies to minimise any
adverse impact on sales, cost and operations. Your Company also monitors external factors
such as raw material prices, inflation and other geo-political factors to assess and
mitigate any adverse effect on business and results of operations.
Your Company monitors its major risks and concerns at regular intervals. Appropriate
steps are taken in consultation with all concerned including the RCM Committee and the
Audit Committee of the Board to identify and mitigate such risks.
During the normal course of its business operations, your Company has been subjected to
litigations
in connection with or incidental thereto. These litigations include civil cases, excise
and customs related cases, etc. filed by and against the Company. These cases are being
pursued with due importance and in consultation with legal experts in respective areas.
Your Board believes that the outcome of these cases is unlikely to cause a materially
adverse effect on the Company's profitability or business performance. Your Company has a
Contingent Liability of Rs. 390.56 Million as on March 31, 2023 as compared to Rs. 828.37
Million as on March 31, 2022. Attention is drawn to the explanations mentioned in Note No.
29 of the Notes to Financial Statements for the financial year ended March 31, 2023. In
view of the present status and based on legal advice obtained from time to time, your
Board is of the opinion that no provision is required to be made against these Contingent
Liabilities.
Internal control systems and their adequacy
A separate paragraph on internal control systems and their adequacy has been provided
elsewhere in the Board's Report.
Discussion on financial performance
The Earnings per Share (EPS - Basic and Diluted) of your Company for the financial year
ended March 31, 2023 was at Rs. 24.83 as compared to the (EPS - Basic and Diluted) for the
previous financial year ended March 31, 2022 at Rs. 7.85. Your Company recorded an EBITDA
margin of 22.91% during the financial year under review as compared to 17.41% during the
financial year 2021-22.
Your Company does not have any Bank Borrowings and the entire capital expenditure has
been funded through internal sources.
The Capital Expenditure incurred during the year under review amounted to Rs. 957.85
Million as compared to Rs. 491.73 Million in the previous year.
Details of significant changes in key financial ratios alongwith explanation
In compliance with the requirement of the Listing Regulations, the key financial ratios
of the Company alongwith explanation for significant changes (i.e., for change of 25% or
more as compared to the immediately previous financial year) has been provided hereunder:
Sl. No. |
Particulars |
2022-23 |
2021-22 |
(i) |
Debtors to Sales (in days) |
8 |
12 |
(ii) |
Inventory to Turnover Ratio
(in months) |
1.71 |
1.50 |
(iii) |
Interest Coverage Ratio* |
4.60 |
1.87 |
(iv) |
Current ratio |
1.95 |
2.44 |
(v) |
Debt Equity Ratio** |
0.87 |
0.60 |
(vi) |
Operating Profit Margin (%) |
14.37 |
7.28 |
(vii) |
Net Profit Margin (%) |
9.2 |
4.2 |
(viii) |
Return on Net worth (%) |
22.3 |
5.6 |
* There is no borrowing in the Company. However, Finance cost includes interest
expenses accounted for various deposits in accordance with Ind AS 109, Financial
Instruments and interest expense accounted on various lease contracts in accordance with
Ind AS 116.
** Leases has been considered as debts.
The significant changes over previous year across all ratios is due to higher sales
& profitability, faster realisations and improvement in consumer sentiments and return
to normalcy post lifting of lockdowns restrictions. Return on Net worth is also higher due
to decrease in Other Equity on account of payment of Special Dividend during the financial
year under review. For detailed explanation, please refer to Note no. 36 of the Notes to
Standalone Financial Statements for the year ended March 31, 2023.
The other financial ratios of the Company relating to previous 10 years has been
provided in other part of Annual Report 2022-23.
Material developments in the human resource / industrial relations front, including
number of people employed
Your Company has been continuously working to advance human resources skills,
competencies and capabilities within the organisation, which are critical to achieve
desired results in line with our strategic business ambitions. Some key initiatives that
have been taken in this direction during the year under review are summarised below:
Employee Engagement
Bata Founders Day - Commemorating the day when Bata as a company in its global
presence first got registered commercially, we celebrated the month of September 2022 with
various interventions across all locations in India. The theme of the celebrations was
"giving back to society" and valuing the contributions of our employees. In the
true spirit of the celebration, we felicitated our employees with "Long Service
Awards".
Fam Jam for Bata Employees - In continuation of our journey to make Bata as
employer by choice, "Fam Jam" was celebrated in March 2023, wherein we rejoiced
and thanked the families of Bata employees for the continued support to their members who
dedicatedly work for the organisation, making it a success story.
Sports Tournament - With an aim to build a stronger One Team connects, a Cricket
match, Volleyball & Carrom Board match were organised for the Bata team in factories.
Health Check-up Camp - With a view to scrutiny the health of Bata workers,
medical checkup camps were organised. We also organised Covid booster Vaccination dose
camp for Bata employees.
Customer Centricity
Win as One, # Be Bold - National Retail Summit and rewards event was organised
to felicitate and reward employees whose exemplary contribution and dedication has led the
organisation to strive ahead and succeed. The event also showcased the achievement and the
path forward to scale up the ladder of aspiration and growth.
Digitisation - Performance Management
The journey of digitisation for the HR processes started about 8 years ago. During the
year under review, the
onboarding of SAP - SF took place and the PMGM Module went live which covers Annual
Performance Review process & Goal Setting 2023. This greatly eased the entire process
of review, right from the Employee to the Manager. Features like 'Employee
Acknowledgements' on completed appraisal, 'Get Feedback' from cross functional
stakeholders, upload of supporting documents, etc. have resulted in creating higher
transparency, reduced manual intervention and greater empowerment to the teams.
Implementation of other modules such as SAP- SF, namely, Employee Central, Compensation
Modules, Succession & Development and Recruiting Management are planned for ensuing
years.
Training, Learning & Development
Learning & Development
Based on Bata employee survey and feedback, one of the key initiatives for Bata was to
enhance the Learning & Development initiatives. Accordingly, your Company launched its
online Learning Platform for key talents in December 2022. The platform in association
with Skillsoft Percipio has been launched under our L&D framework "The Bata
e-University".
BATA e-University marks an important milestone as it will support individual talent
needs in diverse areas aligned to Bata's long-term learning and aspirations through one
single platform for all L&D needs, under three L&D pillars, Functional
Capabilities, Behavioral Capabilities and Leadership Development.
Career Management
Internal Growth - Internal Job Postings and Internal movements remained focus
areas to support the business with opportunities for our employees to learn, perform and
grow within the organisation. STEP UP and Career Ladder programs for the store teams were
continued with Assessment Centers assessing Bata Competencies.
Agile Workforce - Keeping in mind the changing aspects and working environment
of business, we continued the journey with a growth delta in a Flexible working model for
offering better agility, flexible timings and enhanced customer service basis business
requirements. This model also supports our frontline store operations.
Leadership Development - Flagship programs - Bata Leader and Bata Highflyers
were introduced in collaboration with Schlageter Institute, Germany to address the
development needs of High Performing employees. This program
focuses on both building leadership competencies (behavioural) facilitated by Schlagers
International Coaches as well as functional session facilitated by BATA Subject Matter
Experts. The training has been created keeping in mind a blended design with classroom
sessions, VLTs webinars and adopt an experiential learning methodology.
Diversity & Inclusion
Your Company maintained its focus on the agenda of Diversity & Inclusion
across the organisation. With the vision of having more diverse workforce, Bata has been
rigorously working towards hiring a diverse talent pool.
Your Company is committed to providing a work environment, free from harassment
of any kind and in particular, a work environment that has zero tolerance for sexual
harassment. We conducted 'Prevention of Sexual Harassment at Workplace (POSH)' virtual
awareness sessions for all employees at a Pan India level.
Industry Recognition
Your Company has been recognised as one of the "Best Organizations for
Women for 2023" at the 'Economic Times Best Organizations for Women Conclave 2023 -
Powered by Femina'. Economic Times along with their research partner evaluated a universe
of 1000 brands that met atleast 80% of the qualifying criteria and Bata India received the
recognition basis the research studies.
Bataganj Factory was recognised with "Best Employee Award" on the
occasion of May Day and Shram Kalyan Diwas from the Labour Department.
3 Awards at UBS Forums - Bata's CSR Model for Implementation was awarded the
Best CSR Model of the Year Award, Best COVID Response for our Initiatives in Covid and
Bata's Stride with Pride Initiative was Recognised as Innovative Project of the year.
Industrial Relations
Industrial relations across all the manufacturing
units of your Company have been harmonious and
peaceful with active involvement of the employees in the collective bargaining process.
Your Company has also encouraged wholehearted participation of the employees and union in
improving productivity as well as quality of its products.
As on March 31, 2023, there were 4421 permanent employees on the rolls of your
Company.
CAUTIONARY STATEMENT
There are certain Statements which have been made in the Management Discussion and
Analysis Report describing the estimates, expectations or predictions, may be read as
'forward-looking statements' within the meaning of applicable laws and regulations. The
actual results may differ materially from those expressed or implied. The important
factors that would make a difference to the Company's operations include demand-supply
conditions, raw material prices, changes in Government Policies, Governing Laws, Tax
regimes, Global Economic Developments and other factors such as litigation and labour
negotiations.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)
In compliance with Regulation 34(2)(f) of the Listing Regulations, read with the SEBI
Circular No. SEBI/ HO/CFD/CMD-2/P/CIR/2021/562 dated May 10, 2021, your Company is pleased
to publish its 1st Business Responsibility and Sustainability Report (BRSR) for the year
2022-23, in a fair and transparent manner, covering the essential indicators that are
required to be reported on a mandatory basis. The Report is aligned with your Company's
approach towards sustainable, inclusive and resilient development, which is annexed to the
Board's Report and marked as Annexure - IX. The BRSR has been uploaded on the
website of the Company at www.bata.in and is available at the link
https://www.bata.in/bataindia/a- 29_s-181_c-42/investor-relations.html
Annexures forming part of this Report
The Annexures referred to in this Report and other information which are required to be
disclosed are annexed herewith and form part of this Report:
Annexure |
Particulars |
I Secretarial Audit Report |
II |
Corporate Governance Report |
III |
Particulars of Conservation
of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo |
IV & V |
Annual Report on CSR
activities and CSR Policy (Salient features) |
VI |
Nomination and Remuneration
Policy |
VII & VIII |
Disclosures on remuneration
of directors and employees of the Company |
IX |
Business Responsibility and
Sustainability Report |
Considering the provisions of Section 136 of the Act, this Annual Report, excluding the
information on remuneration of employees in terms of Rules 5(2) and 5(3) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended) is being
sent to the members of the Company and others entitled thereto. The said information would
be available for inspection, by members, at the Registered Office of the Company or
through electronic mode, during business hours on working days upto the date of the 90th
AGM of the Company. Any member interested in obtaining a copy thereof may write in this
regard to the Company Secretary of the Company.
ACKNOWLEDGEMENT AND APPRECIATION
Your Board is grateful for the continuous patronage of our customers and remains
committed to serving them by delivering more style and comfort at every step.
Your Board appreciates the support of our business partners, suppliers, associates and
dealers as well as the regulatory authorities of the Central and State Governments in
India throughout our journey. Your Board looks forward to their continued assistance and
co-operation in the coming years.
Your Board is deeply obliged for the unwavering support and trust reposed by you, our
investors & shareholders and is also thankful to the Bata Shoe Organization (BSO) for
their continuous guidance and support throughout the year. Your Board also
takes this opportunity to thank the communities your Company operates in, who have
reposed their trust in us.
The ownership and responsiveness shown by all stakeholders reflects the spirit of this
great organisation. Your Board would like to express its appreciation for the support and
commitment shown by employees, workmen and staff including the frontline staff working in
our stores and Management headed by the Executive Directors in achieving robust
performance on all fronts.
Your Board also places on record its deep appreciation to the Non-Executive Directors,
including the Independent Directors of your Company, for their guidance, sharing of
knowledge, experience and wisdom, for taking the appropriate decisions in achieving its
business goals.
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