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Printed by: OGRO Printing & Packaging Industry

Bata Shoe Company (Bangladesh) Limited


Tongi, Gazipur, Bangladesh
Tel: +880-2-9810501-5
Fax: +880-2-9810511
www.batabd.com
facebook.com/batabangladesh
twitter.com/batabangladesh
welq m~Px Contents
2 cwiPvjKgjx 2 Board of directors

4 Kvvwbi Z_ 4 company information

5 evwlK mvaviY mfvi wew


6 notice of annual General meetinG

12 mfvcwZi fvlY
8 retail & marketinG events

16 cwiPvjKgjxi cwZe`b
9 manufacturinG

20 KcviU Mfb
10 corporate social responsiBility

28 Kgcvq mvwUwdKU
11. Human resources, product development &
mercHandisinG

29 wbixv KwgwUi cwZe`b


12 cHairman's statement

31 wbixK`i cwZe`b
16 directors' report

32 wwZc
20 corporate Governance

33 jvf-jvKmvb wnmve
28 compliance certificate

34 BKzBwU cwieZbi weeiY


29 audit committee report
31 auditors' report
35 bM` A_ cevni weeiY 32 statement of financial position

37 wnmvei wUKvmg~n 33 statement of profit or loss and otHer

67 cw dig
compreHensive income
34 statement of cHanGes in equity
35 statement of casH flows
37 notes to tHe financial statements
68 form of proxy

1
2014

Board of directors

Rajeev Gopalakrishnan Shaibal Sinha


chairman director
(appointed on 1 april 2014)
Present position
Present position senior vice president-Business development & finance
Group managing director, Bata emerging markets, south asia Bata emerging markets

Previous positions Previous position


managing director, Bata shoe company (Bangladesh) limited chief financial officer, Bata india
managing director, Bata shoe of thailand public company limited
vice president, retail operations, Bata india limited
vice president, wholesale operations, Bata india limited

Fernando Garcia Restrepo Rashidul Hasan


chairman independent director
(retired on 1 april 2014)
Present positions
Present position chairman, uttara finance & investments ltd.
Group managing director, manufacturing independent director, reckitt Benckiser Bangladesh ltd.
Previous positions independent director, monno Group of industries
Group managing director, Bata emerging markets (west) trustee, kumudini welfare trust of Bangladesh ltd.
president director, Bata indonesia Previous positions
managing director, Bata kenya founder chairman of idlc the first joint venture leasing company of Bangladesh
managing director, Bata india ceo & managing director of ipdc the first joint venture investment company of
vice president, wholesale & marketing, Bata ltd, toronto, canada Bangladesh.
managing director, Bata Bangladesh director General, department of industries of the republic of Bangladesh

Chitpan Kanhasiri
K M Rezaul Hasanat
Present position
independent director
vice chairman & managing director
(appointed on 1 april 2014)
Present position
chairman and ceo, viyellatex Group
Previous positions
trustee, Bangladesh csr center.
acting company manager, Bata malaysia sdn Bhd
advisory Board member, Green industry platform, unido
retail & non retail sales manager, Bata (thailand) limited

Kumar Nitesh

Present position
vice chairman & managing director
(retired on 1 april 2014)

Previous positions
managing director, Bata thailand
vice president, retail operations, Bata india limited

2 3
2014

Kvvwbi Z_ Company Information evwlK mvaviY mfvi wew


Kvvwb mUvwi Company Secretary GB wewi gvag Rvbvbv hvQ h, evUv my Kvvwb (evsjv`k) wjwgUW-Gi 43Zg evwlK mvaviY mfv wbwjwLZ Kvhvejx
gvt nvwmg iRv md. Hashim reza mv`bi Rb AvMvgx 25 Ryb 2015 enwZevi mKvj 10:30 wgwbU avgivB KviLvbv, XvKvq AbywZ ne:

wbixK
1. 31 wWm^i 2014 ZvwiL mgv eQii Rb cwiPvjKe`i cwZe`b MnY, weePbv I Abygv`b|
Auditors
mvBb dinv` G Kvs Hussain farhad & co.
PvUvW GKvDUvUm chartered accountants
2. 31 wWm^i 2014 ZvwiL mgv eQii Rb wbixwZ wnmve Ges wbixK`i cwZe`b MnY, weePbv I Abygv`b|
evwo bs-15, ivW bs-12
3. cwiPvjKe`i mycvwikKZ jfvsk NvlYv|
House # 15, road # 12
eK-Gd, wbKZb jkvb-1 Block-f, niketon Gulshan-1
XvKv-1212
4. cwiPvjKe`i wbevPb|
dhaka-1212

KcviU Mfb KgcvB Corporate Governance 5. 2015 mvji Rb wbixK wbqvM Ges Zuv`i cvwikwgK wbaviY|
wbixK Compliance Auditors
Aib G AY arun & anjan cwiPvjKgjxi Av`kg
PvUvW GKvDUvUm chartered accountants
evwo bs-18, (PZz_ Zjv), ivW bs-16 House # 18 (4th floor), road # 16
gvt nvwmg iRv
(cyivZb - 27), avbgw
Ux, 27 Gwcj 2015 Kvvwb mUvwi
(old -27), dhanmondi
XvKv-1209 dhaka -1209

`e:
AvBb Dc`v Legal Advisers
j& fvwj law valley 1. 10 g 2015 nQ iKW WU| h me kqvinvvi`i bvg D ZvwiL ch Kvvwbi kqvi iwRvi wKsev wWcwRUix
Avwgb Dwb G GmvwmqU&&m amin uddin & associates iwRvi bw_fz ne, ZuvivB jfvski Rb ea ej MY neb|
gvneyeyj nK G GmvwmqU&&m
2. GKRb m`m GB mvaviY mfvq DcwZ _vKZ Ges fvU c`vb KiZ cvib wKsev Zuvi ^c DcwZ nZ Ges fvU w`Z
mahbubul Hoque & associates

evsK Bankers GKRb cw wbqvM KiZ cvib|


Bvb evsK wjt
3. cw dig h_vh_fve c~iY Ki mfvi wbavwiZ mgqi 48 NUv c~e Kvvwbi iwRvW Awdm AekB Rgv w`Z ne|
eastern Bank ltd.
WvP&& evsjv evsK wjt
cw dig mshvRb Kiv njv|
dutch Bangla Bank ltd.
GBP Gm we wm wjt HsBc ltd.
Bmjvgx evsK (evsjv`k) wjt islami Bank (Bangladesh) ltd.

dvix Factories
1. Ux, MvRxcyi 1. tongi, Gazipur
2. avgivB, XvKv 2. dhamrai, dhaka

iwRvW Awdm Registered Office


evUv my Kvvwb (evsjv`k) wjwgUW Bata shoe company (Bangladesh) limited
Ux wk GjvKv tongi industrial area
Ux, MvRxcyi tongi, Gazipur

4 5
notice of annual General meeting
notice is hereby given that the 43rd annual General meetinG of Bata shoe company (Bangladesh) limited
will be held at dhamrai factory, dhaka, on 25 June 2015, thursday at 10:30 a.m. to transact the following business:
1. to receive, consider and adopt the directors report for the year ended 31 december 2014.
2. to receive, consider and adopt the audited financial statements of the company and the auditors report
thereon for the year ended 31 december 2014.
3. to declare dividend as recommended by the directors.
4. to elect directors.
5. to appoint auditors for the year 2015 and to fix their remuneration.

By order of the Board

Md. Hashim Reza


tongi, 27 april 2015 company secretary

NOTES:

1. 10 May 2015 is the RECORD DATE. shareholders whose names appearing in the share register of the
company or in the depository register on that date will be eligible to receive dividend as approved at the annual
General meeting.

2. a member eligible to attend and vote at the General meeting is entitled to appoint a proxy to attend the meeting
and vote on his/her behalf.

3. form of proxy, duly completed, must be deposited at the companys registered office at least 48 (forty- eight)
hours before the appointed time for the meeting. a proxy form is enclosed.

6 7
2014

retail

Bangladesh Brand forum (BBf) is an initiative with the vision: transforming


Bangladesh through applying Branding ethos among local corporate. with its
our retail channel continues to grow with the current setup along with the new
clear vision and to recognize leaders in Bangladeshs corporate sector in the
stores having achieved a growth of 8% as compared to previous year. in order to year 2014, Bangladesh Brand Forum (BBF) in collaboration with Millward
sustain this growth and to provide friendly and modern atmosphere in the stores, Brown, a leading rating agency organized an award ceremony named Best
an amount of tk. 152.9 million has been spent to open twenty one new stores at Brand Award 2014. the award unveiled the most highlighted brands in
key business locations. moreover, fifteen stores have also been renovated during Bangladesh in 30 categories, which was done through an extensive
this period. much of the expansion / renovation were focused on the big format nationwide survey by millward Brown, Bangladesh.
stores concept. as part of our strategy to exit from low turnover and non profitable
stores, we closed a total of thirteen stores which were under minimum benchmark.
mothers day is a very special day to all of us. it is an event that is
celebrated in every corners of the world. this year Bata Bangladesh not
only celebrated mothers day across the country but also took a special
initiative to celebrate the precious occasion with its loyal customers
through a contest.

Bata Bangladesh proudly organized dealers meet-2014 with a prize giving


ceremony of dhum dhamaka offer at Hotel lakeshore, Gulshan dhaka on 3rd
december, 2014. dealers from all around the country participated in this grand
event enthusiastically. the daylong event has different types of activities with the
dealers. the respected dealers participated in upcoming shoe line review and the
merchandising team helped them for better understanding.

manufacturing
marketing events
in 2014, we have done plenty of marketing events to highlight our brand image and to increase sell. Bata in our manufacturing operations we undertook some further restructuring in line
Bangladesh introduced many exclusive new lines of shoes the majority of which comes during festival periods. with company objectives at the beginning of the year. as a result, our production
these new arrivals were introduced in different Bata brands. some of them are as follows: facilities at tongi and dhamrai remained fully loaded throughout the period to meet
the demand of higher value products in particular pu sole footwear. these facilities
produced 26.8 million pairs of shoes.
fashion would never be completed without a well-designed pair of shoes. this
marketing insight prompted Bata to introduce a number of designers collections for
men, women and children in this 2014 spring summer season. to emphasize its
attractive and colorful collection, Bata Bangladesh recently organized a fashion
show highlighting its spring summer collection at level-7 of Bashundhara mall
shopping complex, dhaka. several journalists, media personals and a large
number of customers were also present.

the show introduced 2014s spring summer collection with its existing brands like Bata industrials
Bata, ambassador, marie claire, moccassino, weinbrenner, Bata comfit, patapata,
as one of the largest manufacturers of safety shoes, Bata plays a major role in safeguarding
power, north star and Bubblegummers. the launching of the new arrivals this year the health of the worlds workers. from the heavy duty work boots to elegant and sporty
brings out many different colorful collections and quality footwear by Bata. footwear, Bata industrial has a wide range of shoes for every vocation, where safety counts.
uncompromising quality with striking designs have put Bata shoes in a key position the brands exclusive features include; shock absorbing tunnel system, tritech plus anti-
to appeal to different segments of consumers. the fashion show was segmented slip soles, Bata cool comfort linings and integrated tpu toe caps. Harnessing its global
in different categories (mens, ladies and children) and different lifestyles following expertise, Bata industrial provides the highest level of protection while keeping the wearers
the latest trend with the country's top fashion models ramping. feet cool and comfortable while on the job.

8 9
2014
corporate social responsibility Human resources

BCP-BANGLADESH, SCHOLARSHIP FOR EMPLOYEE'S CHILDREN we are very much focused improving the professional skills of the
under Bata childrens program Bata Bangladesh arranged a scholarship human resources of the company. a large number of our personnel
program on 18th march, 2014. in this program they gave away participated in both overseas and local training programmes and
scholarship to five children of permanent unionized employees of tongi seminars. during 2014 a total of 9 employees participated in 9
and dhamrai who did outstanding result on their secondary examination. overseas training and 700 employees were envolved in 22 local
training programmes.

VITAMIN A PLUS CAMPAIGN-2014, BCP BANGLADESH


under Bata childrens program Bata Bangladesh participated vitamin a
plus campaign on 5th april, 2014 organized by Health and family
product development & merchandising
welfare ministry of Bangladesh Government. the four day vitamin a plus
campaign began across the country in a bid to prevent childhood
blindness and reduce child mortality.
Bata Comfit
Bata comfit promises unmatched comfort to its customers. through anatomically designed
footwear, soft uppers and footbeds featuring latest cushioning technologies, the brand
delivers comfort like no other. Bata comfit leverages chic, contemporary designs with its
BCP-Bangladesh, Art Competition & Health Check up program
patented comfort technology to ensure the wearer stays relaxed and stylish all day long.
Bata childrens program Bangladesh organized a day long program on
3rd June, 2014 at Bata dhamrai plant.
a colorful art competition, Health checkup and factory visit at dhamrai
plant attended by 30 underprivileged children from munmun kindergarten
school with the support of Bcp volunteers. 15 Bcp volunteers gave their Weinbrenner
full support to make the program successful. Bcp-Bangladesh also Built to suit the true outdoor explorers, weinbrenner embodies the essence of nature,
donated a bookshelf with books on various categories and toys for the exploration and leisure. weinbrenner features heavy duty materials combined with rugged
library of the school.
outsoles to ensure it withstands even the harshest challenges of nature. as a brand, it holds
loyal to its unbroken and unshaken no nonsense and for real reputation, something that
BCP BANGLADESH-HEALTH CHECKUP & SHOE DONATION echoes with the true blue explorers it caters to.
PROGRAM
Bata childrens program Bangladesh organized a day long program on
10th september, 2014 at Bata tongi plant.
Bcp-Bangladesh arranged a primary Health check up & distribute
medicine for 30 underprivileged children from mojar school, mirpur, Bubblegummers
dhaka.10 Bcp volunteers gave their full support to make the program stylish and colorful shoes for active kids. an international brand, specializing in childrens
successful. Bcp-Bangladesh also donated school shoes, socks and footwear, clothes and accessories, which is constantly innovating new designs and
toiletries item to those children. children received refreshment after the enhancing the quality of its products. Bubblegummers specializes in fun, fashionable
program.
footwear with an emphasis attention to the needs of the growing feet of the little stars.
mr. chitpan kanhasiri, company manager and mr. muhammad sohail
aslam, finance director attended the program

BCP BANGLADESH - SUPPORT GIRLS FOR TAILORING TRAINING


Bata childrens program Bangladesh organized a day long program on Patapata
17th december, 2014 at maer achol shelter, mirpur on the occasion of colorful, funky and carefree. theres a certain energy that comes from being outside on a
celebrating international Girls day. sun-splashed day in a world alight with promise. whether youre vacationing in the beaches
Bcp-Bangladesh donated two sewing machines to those underprivileged of st.martins or just puttering around the house, patapata is like a little holiday for your feet.
girls for their self dependent. 6 Bcp volunteers gave their full support to vibrant and fun, with distinctive designs that lets one express their playful side.
make the program a successful.

10 11
2014

mfvcwZi fvlY 2014 chairman's statement 2014


Avgv`i LyPiv wefvM eZgvb cwiwwZi ga ek wKQy bZzb vi dividend for the year 2014 inclusive of 175% interim cash
LyjQ Ges MZ eQii Zzjbvq 8 fvM cew ARb KiQ| GB cew dividend which has already been paid in december, 2014.
ai ivLv Ges `vKvbwjZ 152.9 wgwjqb UvKv LiP Ki iZc~Y our retail channel continues to grow with the current setup
eemvwqK vb 21 wU ezZc~Y I AvaywbK cwiek mg bZzb vi along with the new stores having achieved a growth of 8%
Lvjv nqQ| ZvQvov GB mgqi ga 15wU `vKvbi msvi Kiv
as compared to previous year. in order to sustain this

nqQ| eo eo `vKvbi avibvK mvgb iLB AwaKvsk mmviY


growth and to provide friendly and modern atmosphere in

I msviKvh Pvjvbv nqwQj| Avgv`i eemvwqK b~bZg gvb`i


the stores, an amount of tk. 152.9 million has been spent
to open twenty one new stores at key business locations.
Kkj wnme Kg wew I AjvfRbK 13wU vi Avgiv e Ki moreover, fifteen stores have renovated during this period.
w`qwQ| much of the expansion / renovation were focused on the
big format stores concept. as part of our strategy to exit
Kvvwbi mvgwMK eemvq cvBKvix wefvMi Ae`vb MZ eQii from low turnover and non profitable stores, we closed a
Rajeev Gopalakrishnan Zzjbvq mvgvb Kg wQj| Gi KviY, Kg gyji Pj, cvwK, total of thirteen stores which were under minimum
BbRKUW cbmvgMxZ vbxq Drcv`K I Avg`vbxKviK`i m
benchmark.
chairman
Zxe cwZhvwMZvi myLxb nZ nqQ| Kvwvb BwZga GB performance from our wholesale division was slightly
cwieZbi w`K `w w`qQ| eemv mmviYi j Ges GB
below than the last year reason being more competition in
wcq kqvinvvie`, dear shareholders,
cwZhvwMZv gvKvejvi Rb bZzb bZzb cYmvgMx hvM Kiv nQ
the market with the local and imported merchandize
available especially in the low price articles like thongs,
Kvvwbi cwiPvjKgjxi c _K 43Zg evwlK mvaviY mfvq on behalf of the Board, i welcome you all to the 43rd hvZ Zvrchc~Yfve GKK wew, gvKU kqvi Ges Mo weqg~ji plastic and injected. company has already noticed the
AvMZ mKjK ^vMZ RvbvwQ Ges GKB mv_ Avwg MZ 31 wWm^i annual General meeting of the company and feel pleased
gvag cvBKvix wefvMi eemv ew Kiv hvq| GB mewKQzB ARb change in this segment. new product is being introduced to
2014 ZvwiL kl nIqv eQii evwlK Avw_K cwZe`b I Kiv ne ewaZ wWUi gvag bv nq eis weZv I cwiekK`i
to present the annual review of the companys overcome this challenge to provide opportunity to grow the

wbixK`i cwZe`bmn cwiPvjKgjxi cwZe`b Avcbv`i cvIbv UvKv Av`vq c~Y wbqb Avivci gvag|
performance and the audited financial statements for the business significantly and to capture unit sales, market

myL Dcvcb KiZ ci mvwbZeva KiwQ|


year ended december 31, 2014. share and also average selling price. all this will be
ivwb eemv MZ eQii Zzjbvq 3% eoQ| Gi djkwZZ ivwb
achieved without the need to buy the business through
the year 2014 was yet another difficult year as far as
2014 mvj wQj eemv Ges A_bwZK cwieki Rb DwM nevi gZ eemv DP g~ji Pvgovi cY wewZ mswk Abvb Kvvwbi
extended credit having absolute control over account
business and economic environment is concerned. the
AviKwU KwVb eQi | `k 2013 mvji gZ AviKwU ivRbwZK cPwjZ cYi Zzjbvq GwMqQ|
receivables from dealers and distributors.
country experienced legacies of 2013 in the form of
AwiZv wekl Ki eQii wZxqva agNU, niZvj, moK agitated political disorder accompanied with strikes, hartals export business showed an increase of 3% over the last

Aeivai gZ ivRbwZK Av`vjb cZ Ki | ZeyI Ggb and road blockades especially in the second half of the Avgv`i Drcv`b eevcbvq eQii iZ Kvvwbi msM year as a result of shifting business to high priced leather

AwiZvi gaI Avcbv`i Kvvwb j ARbi Rb cwZkwZe msMwZc~Y AviI wKQz cybMVb Kiv nq| Gi dj Avgv`i Ux I
year. even so your company remained committed to collection as compared to conventional products to other

avgivB cvU Drcv`b Kiv wekl Ki DPg~ji wcBD mvji


associate companies.
wQj| eevcbv KZci KVvi bRi`vwi mI Drcv`b I weqi
achieve its target. the operational performance, in terms of

gZ Kvhvewj `ki AvBb-kLjv cwiwwZ, gy`vxwZi gvMZ Pvc, cv`yKvmvgMx mviv eQii Pvwn`v gUvZ ciQ| GB myweavq
production and sales were achieved under the incredible in our manufacturing operations we undertook some

weqKgx msv AfixY welqvejx bwZevPKfve eemvK Kvvwb 26.8 wgwjqb RyZv Drcv`b KiQ|
guidance of our management team despite, bleak law and further restructuring in line with company objectives at the
beginning of the year. as a result, our production facilities
evavM KiQ|
order situation, persistent inflationary pressure and some
Avcbv`i Kvvwb Zvi HwZnMZ cY Pj, mvbWvK, mvgvi
in-house issues linked to sales staff that negatively at tongi and dhamrai remained fully loaded throughout the

2014 mvj Kvvwbi gvU weq wQj 8.077 wewjqb UvKv hv MZ jvBbi cPzi cwigvY weqK Dcv bv Ki MvnKi Pvwn`v K_v
impacted the business. period to meet the demand of higher value products in

gv_vq iL wbqwgZfve wewfb wefvM bZzb bZzb vBj I


particular pu sole footwear. these facilities produced 26.8
eQii Zzjbvq 3% ewk Ges gvU gybvdv nqQ 3.132 wewjqb the company business witnessed its record level with net million pairs.
UvKv hv MZ eQii Zzjbvq 4% ewk| Kvvwbi cwiPvjbvMZ gybvdv turnover of tk. 8.077 billion signifying a growth of 3% over
wWRvBbi cY evRvi nvwRi KiQ| GB mKj D`vMi Af~w
mvgvb Kg 1.207 wewjqb UvKv _K 1.063 wewjqb UvKvq
your company constantly introduced new products in all
Avgv`i cv`yKvi ghv`v ejvsk ew KiQ, ARb KiQ
last year. the Gross profit was recorded at tk. 3.132 billion
categories; taking into account consumer demand in
`uvwoqQ, hv MZ eQii Zzjbvq 12% Kg| gybvdv Kg nIqvi wcQb MvnK`i AvbyMZ| Avgv`i mvwbZ MvnK`i Rb mevaywbK
with improvement of 4% over previous year. operating
various market segments for new styles and designs,
cavb KviY wQj `vKvbi BRviv Pzwi LiP ew, weq-Kgx`i evi RyZv Avgiv cwZwbqZ evRvi wbq AvmwQ|
profit slightly decreased from tk. 1.207 billion to tk.1.063
without ignoring the necessity for volume sales, which is
weq Kwgkbi kZKiv nvi ew, ZvQvov Zuv`i wKQz myhvM myweav
billion, showing a decrease of 12% as compared to
our traditional strength, particularly in thongs, sandals and
Avcbv`i Kvvwb `ki RyZv wk eni Ki `vZv wnme Zvi
previous year. this decline is mainly because of increase
I fvZv ew | Kvvwb G eQi Ki cieZx gybvdv KiQ 700.670
summer lines. this initiative included improving the status
Ae`vb AevnZ iLQ| 2014 mvj KcviU Ki, fvU, weq
in stores lease agreement cost and settlement with the
wgwjqb UvKv hv MZ eQi wQj 813.084 wgwjqb UvKv| GLvb DjL
of our footwear, gaining loyalty and introducing the latest
sales staff to increase their commission percentage and
Ki, Ges Abvb jfx wnme RvZxq KvlvMvi 2.064 wewjqb
branded product for our valued customer.
Kiv cqvRb h, Avgv`i Kvvwbi BKzwqwUi wecixZ gybvdv certain allowances. profit after taxation was tk. 700.670
KiQ 27.26% Ges kqvi cwZ Avq KiQ 51.22 UvKv| UvKv c`vb KiQ hv weMZ eQii Zzjbvq 15% ewk|
million compared to tk. 813.084 million of last year. it is the company continues to be a major contributor to the
also worth mentioning here that our company achieved national exchequer and during 2014, paid tk. 2.064 billion
Kvvwbi GKwU KvhKix Znwej cevn eevcbv Pvjy iqQ hLvb return on equity of 27.26% and earnings per share of tk. Avgv`i AvwiK KggZv `ki kxl RyZv Drcv`bKvix wnmve in corporate tax, vat, custom duty and other levies which
A_i Atcevn I ewntcevn wbqwgZfve cwZdwjZ nq| Avgv`i cwiwPZ KiQ| GiB ^xKwZmic eQii miv evi
51.22. was 15% more than the last year.

cwiPvjKgjx m Gi Rb h eQi kl Kvvwbi m I `xN the company has an effective cash flow management cyivi, AvBwmGgGwe KZK c` miv KcviU mvbbv cksmvc
our sterling performance has made us a market leader in
gqv`x Kvb Avw_K mxgveZv bB| AvBwmGgGwe mvwUwdKU Ae gwiU 2014 jvf KiQ| evUv `ki
system in place whereby cash inflows and outflows are the shoe business. the company also managed to achieve

KcviU mvgvwRK `vwqZkxjZvq wZxq vb ARb KiQ| KcviU


Brand of the year award and icmaB certificate of merit
Kvvwbi KggZv I AMMwZi Dci wfw Ki 2014 mvji Rb
projected on regular basis. the Board is satisfied that there
for Best corporate report domestically and second
mvgvwRK `vwqZkxjZvi Ask wnme JITA cKi AvIZvq
are no short or long term financial constraints at the close
Avcbv`i cwiPvjKgjx bM` 105% P~ov jfvsk mycvwik
position in Bata award of the year in category crs under
of the period.
KiQb hv AeZxKvjxb jfvsk 175% mn gvU 280%| 2014 bvixmgvRK Mvgxb GjvKvq Zvi weq cK mshy Ki mgvR
Jita project which is empowering womens within the

mvji AeZxKvjxb jfvsk 175% wWm^i gvmB cwikva Kiv Zv`i gZvK Aviv my`p KiQ| Gjv mgvRi DbwZZ
Based on the performance and progress made by the country to involve themselves in the rural area sales
company, your directors have decided to recommend
Kvvwbi AwKvi I AvMn cybe KiQ|
project. this proves our commitment and enthusiasm
nqQ| 105% final cash dividend. this will make a total 280% cash towards the growth of the company.

12 13
Avcbv`i Kvvwb `ki mgvRi K_v weePbv Ki 2014 evUv your company believes in the development of the
wPjWbm& cvMvgi AvIZvq Qv`i ga Qvew Pvjy KiQ| GiB community in the country. in the year 2014 under Bata
AvIZvq Ux Ges avgivBqi BDwbqbfz 5 Rb vqx Kgxi mvb`i
childrens (Bcp) program your company arranged a

ga gvawgK cixvq Amvgvb djvdji Rb ew c`vb Kiv nq|


scholarship program. under this, five scholarships have
been awarded to the children of permanent unionized
ZvQvov wPjWbm& cvMvgi AvIZvq mgvRi myweav ewZ wk`i employees of both factories who did outstanding result in
AskMnb GKwU Avb`gq wPvsKb cwZhvwMZv, Zv`i ^v cixv their secondary school examination. Bcp also arranged a
I KviLvbv cwi`kbi eev KiQ|
colorful art competition, health check and factory visit
attended by underprivileged children.
Kvvwbi eemv ew ejvsk wbfi Ki Dchy cwkbi gvag the growth of our business is highly dependent on the
Kgx`i `Zv ewi Dci| Kvvwb GiB avivevwnKZvq gvbe m` skills imparted to our personnel through sound training.
Dbqb, Kvvwbi chywMZ mmvib I eemv cmvkbi DbwZZ the company has invested considerable time and money

h_ mgq I A_ wewbqvM KiQ| GwU Kvvwbi GKwU Pjgvb


on developing human resources during the period to

cwqv| Avgv`i Kgx`i cwkb memgq fwelZi Rb GKwU


acquire latest development in the field of technology and
business administration. this would be the ongoing
wewbqvM wnme weePbv Kiv nqQ hvZ Zv`i Rb my I wbivc` process for future periods. training of our employees has
KvRi cwiek c`vb Kiv hvq| always been considered as an investment for the future
with the objective to provide them with safe and healthy
eQievcx kwgK-eevcbv mK LyeB mnv`c~b wQj| kwgK`i working environment.
wZbeQi gqv`x PzwwU AvMvgx Ryb Dxb nj Zv`i `vex`vIqv I during the year, management and labour relations were
ewaZ eZb myweavw` wbq AvjvPbv Ki bZzb Pzw ^vwiZ ne| very cordial showing full harmony. a three-year agreement
Avwg Avkv ivwL fvj djvdj ARbi j eevcbv I wmweG
is expiring in June next year and will be signed with the

mswk Dfqi ga GKwU mvlRbK mK eRvq ivLe | my`i


union, which would provide increased benefits and higher
income to our unionized staff. i hope that the management
Kggq cwiek I kvwc~Y my`i mK eRvq ivLvi Rb Kvvwb and the c.B.a. will maintain a satisfactory relationship to
GeQi GKwU evwlK ebfvRb I AvtwefvMxq wKU Ljvi achieve better results for the benefit of all concerned. an
AvqvRb Ki|
event like annual picnic and departmental cricket
competition was also held to provide them pleasant
cwiPvjKgjxZ GKwU cwieZb GmQ| eevcbv cwiPvjK wnme environment.
wg. Kzgvi wbZk Gi RvqMvq wg. wPUcvb Kvbnvkix `vwqZ Mnb one change has been witnessed in the composition of the
KiQb| Avwg Zuvi cksmbxq D`vM I w`K wb`kbvq Kvvwb
Board, where mr. chitpan kanhasiri took over as managing

AbK `~i GwMq hve Avkv KiwQ|


director; in place of mr. kumar nitesh. i would like to place
on record my utmost regards and appreciation for his
Kvvwbi msNwewa Abymvi eevcbv cwiPvjK wg. wPUcvb
admirable efforts towards the growth of the company.

Kvbnvkix Qvov Abvb cwiPvjKe` GB evwlK mfvq Aemi Mnb in accordance with the articles of association of the
Kijb Ges cybtwbevPbi hvM weavq cv_x njb|
company, all the directors, except the managing director,
mr. chitpan kanhasiri will retire at the annual General
2014 mvji 30 wWm^i Avcbv`i Kvvwbi 10 UvKvi cwZwU meeting and being eligible offer themselves for re-election.

kqvi XvKv K GP 1,172.10 UvKv Ges PMvg K GP your company shares of a nominal value of tk. 10.00
1,143.80 UvKvq q-weq nq|
were traded at tk 1,172.10 on the dhaka stock exchange
and tk. 1,143.80 on the chittagong stock exchange
Avgiv hw` mvgb GZ PvB Zvnj Avgv`i m`v cwieZbkxj respectively on 30, december 2014.

A_bwZK, wecbb kZvejx I k cwZwZvi gvKvejv KiZ as we move forward, we are certain to face competitions
ne| Avgv`i h kw iqQ Zv w`q Avgiv fwelZ mB mKj
and challenges due to ever changing economic and

cwZhvwMZvK mdjfve AwZg KiZ cvie|


marketing conditions. Based on our strengths we are
confident to overcome successfully all the challenges in
Avwg cwiPvjKgjxi c _K Kvvwbi cwZ AevnZ mvnvh I
future.

mnhvwMZvi Rb ZvmvaviY huviv Avgv`i cYi Dci Avv


on behalf of your Board, i take this opportunity to express

iLQb, Avgv`i KgKZv-KgPvixe`, mKj kqvinvvie`,


my gratitude and appreciation to our customers for their
confidence in our products, our employees for their efforts,
Ges MYcRvZx evsjv`k miKvii wbKU KZZv cKvk I abev` all other stakeholders and the Government of the peoples
vcb KiwQ| republic of Bangladesh for their continuous support and
cooperation extended to the company.

ivRxf MvcvjvKvb Rajeev Gopalakrishnan


Pqvigvb chairman

14 15
15
2014
directors' report 2014
your directors have pleasure in submitting their report and audited financial statements of the company for Audit Committee Meeting
the year ended 31 december 2014 along with the preceding five years as follows:
the audit committee is a sub-committee of the Board. all members of the audit committee were appointed by
the Board of directors from amongst the members. they met twice during the year 2014. the company
Industry Outlook
secretary was the secretary of the committee. the audit committee is comprised of:
the footwear sector in the country witnessed a moderate growth during the year. the company attained a
growth of 3% during the current year. it is expected that the growth trend will increase under the prevailing mr. rashidul Hasan chairman independent director
market conditions. mr. fernando Garcia restrepo member (resigned on 1 april 2014)
mr. rajeev Gopalakrishnan member (appointed on 1 april 2014)
Cost of Sales & Profit Margin mr. kumar nitesh member (resigned on 1 april 2014)
mr. chitpan kanhasiri member (appointed on 1 april 2014)
the overall costs of raw materials remain stable internationally. so, the cost of sales has decreased in 2014 as
mr. shaibal sinha member
compared to net turnover due to strict control over the consumption of raw materials and other cost of
mr. k m rezaul Hasanat member as independent director
production. consequently the gross profit has increased over that of 2013.
Reports on Activities of the Audit Committee
Key Operating & Financial Information
the audit committee has performed regularly the following activities:
your directors have pleasure in submitting the key operating and financial data of the company for the year
ended 31 december 2014 along with the preceding five years below: oversee the financial reporting.
monitoring the choice of accounting policies, principles, internal control and risk management process.
Financial results 2014 2013 2012 2011 2010 2009
Taka Taka Taka Taka Taka Taka
oversee performance of statutory auditors.
000 000 000 000 000 000
net profit before tax 1,017,920 1,153,284 971,389 793,620 742,971 629,692 reviewing the annual financial statements before submission to the Board for approval.
provision for tax 317,250 340,200 299,473 213,003 199,000 180,286
reviewing the statement of significant related party transactions.
Net profit after tax 700,670 813,084 671,916 580,617 543,971 449,406
un-appropriated profit brought forward 2,009,391 1,606,707 1,313,782 1,075,166 873,194 724,748 The System of Internal Control
earlier year tax adjustment (3,240) - - - - -
the Board of directors assures the shareholders that the company has a robust risk management process to
loss on BB export winding up - - (2,791) - - -
ensure that the system of internal control is sound in design and has been effectively implemented and
Profit available for appropriation 2,706,771 2,414,792 1,982,907 1,655,782 1,417,166 1,174,154
monitored. although it is possible that all risks to the business are not known at present, the company takes
From which the Directors recommended the following appropriations:
reasonable steps to identify material risks that may hamper business results and systematically reviews these
risks in light of the changing internal and external environment in order to assess that the controls in place are
final dividend paid (previous year) 143,640 143,640 143,640 143,640 143,640 143,640 adequate to address these risks.
interim dividend paid (current year) 239,400 264,760 232,560 198,360 198,360 157,320
Total dividend 383.040 410,400 376,200 342,000 342,000 300,960 Directors Declaration as to Financial Statements
Un-appropriated profit carried forward 2,323,731 2,004,391 1,606,707 1,313,782 1,075,166 873,194
as part of preparation and presentation of the financial statements, the directors also report that:

Dividend a) the financial statements prepared by the management of the company present a true and fair view of
companys state of affairs, the result of its operations, cash flows and changes in equity.
for the year ended 31 december 2014 the Board of directors recommended an interim dividend of tk. 17.50 per
share amounting to tk 239,400,000 and now recommends a final dividend of tk. 10.50 per share amounting to b) proper books of accounts of the company have been maintained as required by law.
tk. 143,640,000 thus making a total dividend of tk. 28 per share amounting to tk. 383,040,000. c) appropriate accounting policies have been consistently applied in preparation of the financial statements
and the accounting estimates are based on reasonable and prudent judgment.
Directors Proposed for Re-Election d) the financial statements were prepared in accordance with Bangladesh accounting standards (Bas) and
the directors retiring as per article 104 of the companys articles of association are mr. rajeev Gopalakrishnan, Bangladesh financial reporting standards (Bfrs) as applicable in Bangladesh and there has not been any
mr. shaibal sinha, mr. rashidul Hasan and mr. k m rezaul Hasanat and being eligible offer themselves for departure there from.
re-election. e) the md and fd have certified to the Board that:

16 17
2014

i) they have reviewed the financial statements and believe: Pattern of Shareholdings Annexure - 1
a) these statements do not contain any materially untrue statement or omit any material fact or
contain statements that might be misleading; names of the shareholders along with their position of the shares are listed below:
b) these statements together present a true and fair view of the companys affairs and are in
Names of the shareholders Number of % holding
compliance with existing accounting standards and applicable laws. share held
i) parent/subsidiary/associate/related parties:
ii) there are, to the best of their knowledge and belief, no transactions entered into by the company
Bafin nederland (B.v.) 9,576,000 70.00
during the year which are fraudulent, illegal or in violation of the companys codes of conduct.
ii) directors/ceo/cs/cfo/audit Head and their
Auditors spouses and minor children
mr. rashidul Hasan 64 0.00
rahman rahman Huq (kpmG) chartered accountants, have offered their willingness to be appointed as
statutory auditors of the company. the Board recommends their appointment for the year 2015 and to continue iii) executives (Head of functions) nil nil
till the next annual General meeting. iv) shareholders, who hold 10% or more nil nil
on behalf of the Board of directors, v) others shareholders, who hold less than 10%
non-resident shareholders 1,101,254 8.05
local shareholders 3,002,682 21.95
Total 13,680,000 100.00
Chitpan Kanhasiri
managing director
27 april 2015 Board Meetings
the Board met 6 (six) times during the year 2014. the company secretary and finance director were also present
in the Board meetings. the attendance by each director is stated below:

Present Directors Name No. of Attendance


mr. fernando Garcia restrepo 02 meetings (resigned on 1 april 2014)
mr. kumar nitesh 02 meetings (resigned on 1 april 2014)
mr. rashidul Hasan 06 meetings
mr. k m rezaul Hasanat 03 meetings
mr. shaibal sinha 05 meetings
mr. chitpan kanhasiri 04 meetings (appointed on 1april 2014)
mr. rajeev Gopalakrishnan 01 meeting (appointed on 1 april 2014)

18 19
2014

Annexure

Status of compliance with the conditions imposed by the Bangladesh Securities and Exchange
Commission's Notification No. SEC/CMRRCD/2006-158/134/Admin/44 dated 07 August 2012 Issued under Compliance Status
section 2CC of the Securities and Exchange Ordinance, 1969: (Put in the Remarks
Condition Title appropriate column) (if any)
sec checklist: (report under condition no.7) No. Not
Complied Complied
Compliance Status
(Put in the Remarks (iv) the post of independent director(s) can not remain not no such
Condition Title appropriate column) (if any) vacant for more than 90 (ninety) days. applicable vacancy
created 2014
No. Not
Complied Complied (v) the Board shall lay down a code of conduct of all Board
members and annual compliance of the code to be
1.0 Board of Directors recorded.
1.1 Boards Size the tenure of office of an independent director shall be
(vi)
the number of Board directors should not be less than 5 (five) for a period of 3 (three) years, which may be extended
and more than 20 (twenty)
for 1 (one) term only.
1.3 Qualification of Independent Director (ID)
1.2 Independent Directors
(i) independent director shall be a knowledgeable
(i) at least one fifth (1/5) of the total number of directors in
individual with integrity who is able to ensure
the companys board shall be independent directors. compliance with financial, regulatory and corporate laws
(ii) a) who either does not hold any share or holds less than and can make meaningful contribution to business.
1% shares to the total paid-up shares of the company;

(ii) the person should be a Business leader / corporate
(ii) b) leader / Bureaucrat / university teacher with
who is not a sponsor of the company and is not
economics or Business studies or law background /
connected with the companies any sponsor or director
professionals like chartered accountants, cost &
or shareholder who holds one percent (1%) or more management accountants, and chartered secretaries.
share of the total paid-up shares of the company on the the independent director must have at least 12 (twelve)
basis of family relationship. years of corporate management / professional
(ii) c) experience.
who does not have any other relationship whether
pecuniary or otherwise, with the company or its (iii) in special cases the above qualifications may be not
subsidiary/ associated companies or its subsidiary
relaxed subject to prior approval of the commission. applicable
/associated companies. 1.4 Chairman of the Board and Chief Executive Officer
(ii) d) who is not a member, director or officer of any stock the positions of the chairman of the Board and the chief
exchange?
executive officer of the companies shall be filled by different
individuals with defined different roles and responsibilities. the

(ii) e) who is not a shareholder, director or officer of any chairman of the company shall be elected from among the
member of stock exchange or an intermediary of the directors of the company.
capital market.
1.5 The Directors Report to Shareholders
(ii) f) who is not a partner or an executive or was not a
partner or an executive during the preceding 3 (three) (i) industry outlook and possible future development in the
industry.
years of the concerned companys statutory audit firm.
(ii) segment-wise or product-wise performance.
(ii) g) who shall not be an independent director in more than
3 (three) listed companies. (iii) risks and concerns.
(ii) h) who has not been convicted by a court of competent (iv) a discussion on cost of Goods sold, Gross profit margin
jurisdiction as a defaulter in payment of any loan to a and net profit margin.
bank or a non-Bank financial institution (nBfi). (v) discussion on continuity of any extra-ordinary gain or no such
not
(ii) i) loss. gain/loss
who has not been convicted for a criminal offence applicable
occurred
involving moral turpitude.
(iii) (vi) Basis for related party transactions- a statement of all
the independent director(s) shall be appointed by the presented in
related party transactions should be disclosed in the
the financial
board of directors and approved by the shareholders in
the annual General meeting (aGm). annual report. statement

20 21
2014

Compliance Status Compliance Status


(Put in the Remarks (Put in the Remarks
Condition Title appropriate column) (if any) Condition Title appropriate column) (if any)
No. Not No. Not
Complied Complied Complied Complied
(vii) utilization of proceeds from public issues, rights issues not during 2014 (xxi) The pattern of shareholdings and name wise details disclosing the aggregate number
and / or through any others instruments. applicable there were no of shares:
public or right
issue of share (xxi) a) parent/subsidiary/associated companies and other
an explanation if the financial result deteriorate after the not related parties (name wise details).
(viii)
company goes for initial public offering (ipo), repeat applicable (xxi) b) directors, chief executive officer, company secretary,
public offering (rpo), rights offer, direct listing, etc.

chief financial officer, Head of internal audit and their
spouses and minor children (name wise details).
(ix) if significant variance occurs between quarterly not no such
financial performance and annual financial statements applicable variance (xxi) c) executives (top five salaried employees of the company,
the management shall explain about the variance on occurred other than the directors, chief executive officer,
their annual report. company secretary, chief financial officer and Head of
internal audit).
(x) remuneration to directors including independent
directors. (xxi) d) shareholders holding ten percent (10%) or more voting
interest in the company (name wise details).
(xi) the financial statements prepared by the management of
the issuer company present fairly its state of affairs, the (xxii) In case of appointment/re-appointment of a Director the Company shall disclose the following
result of its operations, cash flows and changes in equity. information to the Shareholders:

(xii) proper books of account of the issuer company have


been maintained.
(xxii) a) a brief resume of the director.
appropriate accounting policies have been consistently
(xxii) b) nature of his/her expertise in specific functional areas.
(xiii)
applied in preparation of the financial statements and (xxii) c) names of companies in which the person also holds the
that the accounting estimates are based on reasonable directorship and the membership of committees of the

and prudent judgment. board.
(xiv) international accounting standards (ias)/ Bangladesh 2.0 Chief Financial Officer (CFO), Head of Internal Audit and Company Secretary (CS)
accounting standards (Bas)/ international financial
reporting standards (ifrs)/ Bangladesh financial
2.1 the company shall appoint a chief financial officer (cfo), a Head
reporting standards (Bfrs), as applicable in
Bangladesh, have been followed in preparation of the
of internal audit (internal control and compliance) and a company
secretary (cs). the Board of directors should clearly define
financial statements and any departure there-from has
been adequately disclosed. respective roles, responsibilities and duties of the cfo, the Head of
internal audit and the cs.
(xv) the system of internal control is sound in design and
has been effectively implemented and monitored.
the cfo and the company secretary of the companies shall
2.2
attend the meetings of the Board of directors.
(xvi) there are no significant doubts upon the issuer ability of the
company's ability to continue as a going concern. if the company to 3.0 Audit Committee
issuer company is not considered to be a going continue as
(i) the company shall have an audit committee as a sub-
concern, the fact along with reasons thereof should be going concern
committee of the Board of directors.
disclosed.
(ii) the audit committee shall assist the Board of directors
(xvii) significant deviations from the last years operating not in ensuring that the financial statements reflect true and
results of the issuer company shall be highlighted and fair view of the state of affairs of the company and in
applicable
the reasons thereof should be explained. ensuring a good monitoring system within the business.
(xviii) key operating and financial data of at least preceding 5 the audit committee shall be responsible to the Board
(iii)
(five) years shall be summarized. of directors. the duties of the audit committee shall be
(xix) if the issuer company has not declared dividend (cash clearly set forth in writing.
not
or stock) for the year, the reasons thereof shall be given. applicable 3.1 Constitution of the Audit Committee
(xx) the number of Board meetings held during the year and the audit committee shall be composed of at least 3
attendance by each director shall be disclosed. (i)
(three) members.

22 23
2014

Compliance Status Compliance Status


(Put in the Remarks (Put in the Remarks
Condition Title appropriate column) (if any) Condition Title appropriate column) (if any)
No. Not No. Not
Complied Complied Complied Complied
(ii) the Board of directors shall appoint members of the (x) when money is raised through initial public offering
audit committee who shall be directors of the company (ipo)/repeat public offering (rpo)/rights issue the
and shall include at least 1 (one) independent director. company shall disclose to the audit committee about
the uses/applications of funds by major category
(iii) all members of the audit committee should be not
(capital expenditure, sales and marketing expenses, applicable
financially literate and at least 1 (one) member shall working capital, etc), on a quarterly basis, as a part of
have accounting or related financial management
their quarterly declaration of financial results. further,
experience.
on an annual basis, the company shall prepare a
(iv) when the term of service of the committee members statement of funds utilized for the purposes other than
expires or there is any circumstance causing any those stated in the offer document/prospectus.
committee member to be unable to hold office until
3.4 Reporting of the Audit Committee
expiration of the term of service, thus making the not
applicable there was no
number of the committee members to be lower than the
such vacancy 3.4.1 Reporting to the Board of Directors
prescribed number of 3 (three) persons, the Board of
created (i) the audit committee shall report on its activities to the
directors shall appoint the new committee member(s)
to fill up the vacancy(ies) immediately or not later than 1
Board of directors.
(one) month from the date of vacancy(ies) in the (ii) The Audit Committee shall immediately report to the Board of Directors on the following
committee to ensure continuity of the performance of findings, if any:-
work of the audit committee. not
(ii) a) report on conflicts of interests. applicable
(v) the company secretary shall act as the secretary of the
committee. (ii) b) suspected or presumed fraud or irregularity or material not
defect in the internal control system. applicable
(vi) the quorum of the audit committee meeting shall not
(ii) c) suspected infringement of laws, including securities not
constitute without at least 1 (one) independent director. applicable
related laws, rules and regulations.
3.2 Chairman of the Audit Committee
(ii) d) any other matter which shall be disclosed to the Board not
(i) the Board of directors shall select 1 (one) member of of directors immediately. applicable
the audit committee to be chairman of the audit
3.4.2 Reporting to the Authorities:
committee, who shall be an independent director.
(ii) chairman of the audit committee shall remain present in if the audit committee has reported to the Board of directors about

the annual General meeting (aGm). anything which has material impact on the financial condition and
3.3 Role of Audit Committee results of operation and has discussed with the Board of directors
not
(i) oversee the financial reporting process. and the management that any rectification is necessary and if the applicable
audit committee finds that such rectification has been
(ii) monitor choice of accounting policies and principles.
unreasonably ignored, the audit committee shall report such
(iii) monitor internal control risk management process. finding to the commission, upon reporting of such matters to the
(iv) oversee hiring and performance of external auditors Board of directors for three times or completion of a period of 6
(v) review along with the management, the annual (six) months from the date of first reporting to the Board of
financial statements before submission to the board for directors, whichever is earlier
approval.
(vi) review along with the management, the quarterly and 3.5 Reporting to the Shareholders and General Investors:
half yearly financial statements before submission to the
board for approval.
(vii) report on activities carried out by the audit committee, including
review the adequacy of internal audit function.
any report made to the Board of directors under condition 3.4.1 (ii)
(viii) review statement of significant related party above during the year, shall be signed by the chairman of the

transactions submitted by the management.
audit committee and disclosed in the annual report of the issuer
(ix) review management letters/ letter of internal control company.
weakness issued by statutory auditors.

24 25
2014

Compliance Status Compliance Status


(Put in the Remarks (Put in the Remarks
Condition Title appropriate column) (if any) Condition Title appropriate column) (if any)
No. Not No. Not
Complied Complied Complied Complied
4.0 External /Statutory Auditors should not engage in the following services 6.0 Duties of Chief Executive Officer (CEO) and Chief Financial Officer (CFO)

appraisal or valuation services or fairness opinions. the ceo and cfo shall certify to the Board that:-
(i)
(ii) financial information systems design and (i) they have reviewed financial statements for the year and that to the best of their knowledge and belief:
implementation.
these statements do not contain any materially untrue
Book-keeping or other services related to the (i) a)
(iii) statement or omit any material fact or contain
accounting records or financial statements. statements that might be misleading;

Broker-dealer services. these statements together present a true and fair view
(iv) (i) b)
of the companys affairs and are in compliance with
actuarial services. existing accounting standards and applicable laws.
(v)
there are, to the best of knowledge and belief, no
internal audit services. (ii)
(vi) transactions entered into by the company during the
year which are fraudulent, illegal or violation of the
any other service that the audit committee determines.
(vii) companys code of conduct.
no partner or employees of the external audit firms shall 7.0 Reporting and Compliance of Corporate Governance
(viii) possess any share of the company they audit at least
during the tenure of their audit assignment of that (i) the company shall obtain a certificate from a practicing
the certificate
professional accountant/ secretary (chartered accountant/
company. is enclosed in
cost and management accountant/ chartered secretary)
regarding compliance of conditions of corporate this annual
audit/certification services on compliance of corporate report 2014
(ix) Governance Guidelines of the commission and shall send
governance as required under clause (i) of condition no. 7 the same to the shareholders along with the annual report
on a yearly basis.
5.0 Subsidiary Company
(ii) the directors of the company shall state in the directors'
report whether the company has complied with these
(i) provisions relating to the composition of the Board of conditions.
not
directors of the holding company shall be made
applicable
applicable to the composition of the Board of directors
of the subsidiary company.

(ii) at least 1 (one) independent director on the Board of


directors of the holding company shall be a director on not
applicable
the Board of directors of the subsidiary company.

(iii) the minutes of the Board meeting of the subsidiary


not
company shall be placed for review at the following applicable
Board meeting of the holding company.

(iv) the minutes of the respective Board meeting of the


holding company shall state that they have reviewed the not
applicable
affairs of the subsidiary company also.

(v) the audit committee of the holding company shall also


review the financial statements, in particular the not
investments made by the subsidiary company. applicable

26 27
2014

Arun & Anjan Audit Committee Report

C H A R T E R E D A C C O U N TA N T S the Board of directors of Bata shoe company (Bangladesh) limited has constituted an audit committee to support
the Board in fulfilling its oversight responsibilities.

the audit committee meeting was held twice for the year 2014. the finance director, company secretary and the
Head of internal audit were invitees to the audit committee meeting.
Certificate on Compliance with Conditions of Corporate Governance Guidelines
Purpose of the Audit Committee
to the Shareholders of Bata Shoe Company (Bangladesh) Limited the role of audit committee is to monitor the integrity of the financial statements of the company and review and,
when appropriate, make recommendations to the main board on business risks, internal controls and compliance.
(issued under condition no. 7 (i) of corporate Governance Guidelines of Bsec vide notification no. the committee satisfies itself by means of suitable steps and appropriate information, that proper and satisfactory
internal control system are in place to identify and contain business risks and the companys business is conducted
sec/cmrrcd/2006-158/134/admin/44 dated 07 august 2012) in a proper and financially appropriate manner.

we have examined the compliance with conditions of the corporate governance guidelines by Bata shoe company Major Responsibilities of the Audit Committee
in 2014, the audit committee reviewed its terms of reference in line with requirements of Bangladesh securities and
(Bangladesh) limited (herein after referred to the company) for the year ended 31 december 2014. these
exchange commissions (Bsec) notification on corporate governance. the committee carried out its duties in
conditions of corporate governance were issued by the Bangladesh securities and exchange commission (Bsec) accordance with the terms of reference of the audit committee. some of the major responsibilities of the audit
vide its notification no. sec/cmrrcd/2006-158/134/admin/44 dated 07 august 2012 and sec/cmrrcd/2006- committee are as follows:
review the annual, half-yearly and quarterly financial statements and other financial results, and upon
158/147/admin/48 dated 21 July 2013. its satisfaction of the review, recommend the same to the Board.
review the adequacy and effectiveness of financial reporting process, internal control system, risk
those charged with governance and the management of the company is responsible for complying with the management, auditing matters, and the companys processes for monitoring compliance with laws and
conditions of corporate governance guidelines were issued by the Bangladesh securities and exchange regulations and the codes of conduct.
commission (Bsec). those charged with the governance of the company are also responsible for stating in the recommend appointment, termination and determination of audit fees for statutory auditors. consider
the scope of work, and oversee and evaluate the work performed by statutory auditors. review permitted
director's report whether the company has complied with the conditions of corporate governance guidelines. non-audit services performed by statutory auditors.
exercise its oversight of the work of internal audit department of the company. review the effectiveness
our responsibility is to provide a certificate about whether the company is in compliance with the said conditions of of internal audit function including performance, structure, adequacy of resources, and compliance with
corporate governance based on our examination. our examination for the purpose of issuing this certificate was professional standards. examine audit findings and material weaknesses and monitor implementation of
audit action plans.
limited to the procedures including implementation thereof as adopted by the company for ensuring the compliance
of the conditions of corporate governance and correct reporting of the status of the compliance on the attached Major Activities of the Audit Committee
reviewed and recommended to the Board the quarterly and annual financial statements for the year
statement on the basis of evidence gathered and representation received. it is neither an audit nor an expression ended 31 december, 2014.
of opinion on the financial statement of the company. considered and made recommendation to the Board on the appointment and remuneration of external
auditors, rahman rahman Haq., chartered accountants for the year 2015.
to the best of our information and according to the explanations provided to us by the company, we certify that, the reviewed the management letter from external auditors for the year 2014 together with managements
responses to the findings.
company has complied for the year ended 31 december 2014 with the conditions of corporate governance
approved the internal audit plan for 2015, monitored progress and effected revisions when necessary.
stipulated in the above mentioned guidelines issued by Bsec dated 07 august 2012. discussed internal audit reports and findings in detail with auditors and members of management and
monitored the status of implementation of audit action plans and provided guidance to ensure timely
completion of action plans.
reviewed the activities of the compliance function, incidence reporting and actions, and the status of
enforcement of the companys codes of conduct.
reviewed the internal audit charter.
arun kumer kundu, aca
reviewed and received report on the matters as per requirement from the securities and exchange
manaGinG partner
commission (sec).
dated, dHaka; ARUN & ANJAN
28 april, 2015 CHARTERED ACCOUNTANTS the above matters are significant recommendations for continuous improvement and therefore duly noted.

office: House # 18 (4th floor), road # 16 (old-27), dhanmondi, dhaka 1209. Rashidul Hasan
tel: 9104704, cell: 01819 401724, e-mail: arunrrh@gmail.com chairman, audit committee

28 29
For every step
independent auditors' report to the shareholders of
Bata shoe company (Bangladesh) limited
Report on the Financial Statements
we have audited the accompanying financial statements of Bata shoe company (Bangladesh) limited ("the company") which
comprise the statement of financial position as at 31 december 2014, and the statement of profit or loss and other comprehensive
income, statement of changes in equity and statement of cash flows for the year then ended, and a summary of significant
accounting policies and other explanatory information.

Managements Responsibility for the Financial Statements


management is responsible for the preparation of financial statements that give a true and fair view in accordance with Bangladesh
financial reporting standards, and for such internal control as management determines is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility
our responsibility is to express an opinion on these financial statements based on our audit. we conducted our audit in accordance
with Bangladesh standards on auditing. those standards require that we comply with ethical requirements and plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
an audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
the procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. in making those risk assessments, we consider internal control relevant to the entitys
preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control. an audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements.

we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion
in our opinion, the financial statements give a true and fair view of the financial position of Bata shoe company (Bangladesh)
limited as at 31 december 2014, and of its financial performance and its cash flows for the year then ended in accordance with
Bangladesh financial reporting standards.

Report on Other Legal and Regulatory Requirements


in accordance with the companies act 1994 and the securities and exchange rules 1987, we also report the following:
a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the
purpose of our audit and made due verification thereof;
b) in our opinion, proper books of account as required by law have been kept by the company so far as it appeared from our
examination of those books;
c) the statement of financial position and statement of profit or loss and other comprehensive income dealt with by the report are
in agreement with the books of account; and
d) the expenditure incurred was for the purposes of the companys business.

dhaka, 27 april 2015 Hussain Farhad & Co.


Chartered Accountants

30 31
Bata Shoe Company (Bangladesh) Limited
2014
Bata Shoe Company (Bangladesh) Limited statement of profit or loss and other comprehensive income
statement of financial position as at 31 December 2014 for the year ended 31 December 2014

Notes 2014 2013 Notes 2014 2013


Taka Taka Taka Taka
Assets
property, plant and equipment 4 998,104,774 932,544,605 Revenue 19 8,076,995,037 7,878,975,170
capital work in progress 5 59,367,881 - cost of sales 20 (4,945,486,549) (4,857,762,141)
prepayments of rent 9.1 136,911,904 113,965,000 Gross profit 3,131,508,488 3,021,213,029
Total non-current assets 1,194,384,559 1,046,509,605 exchange gain/(loss) 6,886,918 4,351,351
other income 21 20,221,586 18,424,860
inventories 7 2,159,099,409 2,167,843,253 administration, selling and distribution expenses 22 (2,096,017,729) (1,837,320,706)
accounts receivable 8 455,472,117 435,657,233
Profit from operating activities 1,062,599,263 1,206,668,534
advances, deposits and prepayments 9 798,868,138 702,987,654
finance income 23 13,846,600 13,361,966
cash and cash equivalents 10 292,396,800 257,439,710
finance expenses 24 (4,951,020) (6,047,801)
Total current assets 3,705,836,464 3,563,927,850
Net finance income 8,895,580 7,314,165
Total assets 4,900,221,023 4,610,437,455 contribution to workers' profit participation fund 25 (53,574,742) (60,699,135)
Profit before income tax 29 1,017,920,101 1,153,283,564
Total equity attributable to equity holders of the company
income tax expense:
share capital 11 136,800,000 136,800,000
current tax 18 331,000,000 338,000,000
reserves and surplus 12 2,434,223,893 2,119,884,143
deferred tax 6 (13,750,000) 2,200,000
Total equity 2,571,023,893 2,256,684,143
317,250,000 340,200,000

Liabilities Profit for the year 700,670,101 813,083,564


deferred liability 13 162,343,000 134,506,744
deferred tax liability 6 750,000 14,500,000 Basic earnings per share (par value TK 10) 32 51.22 59.44

Total non-current liabilities 163,093,000 149,006,744


The annexed notes 1 to 40 form an integral part of these financial statements.
creditors for goods 14 526,075,948 460,953,222
creditors for expenses 15 346,800,443 443,624,893
creditors for other finance 16 262,185,527 273,340,269
accrued expenses 17 382,765,944 375,921,784
provision for tax 18 579,559,130 586,559,130
unclaimed dividend 68,717,138 64,347,270
Total current liabilities 2,166,104,130 2,204,746,568
Total liabilities 2,329,197,130 2,353,753,312
Total equity and liabilities 4,900,221,023 4,610,437,455

The annexed notes 1 to 40 form an integral part of these financial statements.

Chitpan Kanhasiri Rashidul Hasan Md. Hashim Reza Chitpan Kanhasiri Rashidul Hasan Md. Hashim Reza
managing director director company secretary managing director director company secretary
& finance manager & finance manager

as per our report of same date. as per our report of same date.

dhaka, 27 april 2015 Hussain Farhad & Co. dhaka, 27 april 2015 Hussain Farhad & Co.
Chartered Accountants Chartered Accountants

32 33
2014
Bata Shoe Company (Bangladesh) Limited
statement of cash flows for the year ended 31 December 2014

2014 2013

(143,640,000)
(266,760,000)

(3,290,351)

(143,640,000)
(239,400,000)
1,854,000,579

813,083,564

2,256,684,143

700,670,101

2,571,023,893
Taka Taka

equity
Total

Taka
Cash flows from operating activities

cash receipts from customers 8,035,999,651 7,703,564,659


cash payments to and on behalf of employees (1,299,182,104) (1,250,878,202)

(143,640,000)
(266,760,000)

(3,290,351)

(143,640,000)
(239,400,000)
1,606,707,776

813,083,564

2,009,391,340

700,670,101

2,323,731,090
Retained
earnings

cash payments for deferred liabilities (10,350,777) (23,906,443)


Taka
statement of changes in equity for the year ended 31 December 2014

cash payments to suppliers and contractors for goods and services (5,718,535,019) (5,568,042,699)
Cash generated from operating activities 1,007,931,751 860,737,315

interest received from std account 6,117,072 5,192,660


48,863,000

48,863,000

48,863,000
-

-
-

-
-

-
-
Bata Shoe Company (Bangladesh) Limited

interest paid (4,951,020) (6,047,801)


General
reserve

Taka

income tax paid (371,925,383) (296,401,727)


Net cash from operating activities 637,172,420 563,480,447

Cash flows from investing activities


distributable

998,620

998,620

998,620
-

-
-

-
-

-
-
reserve
special
Non-

Taka

interest received from fdr 7,123,001 8,169,306


proceed from sales of property, plant and equipment 897,655 2,945,866
acquisition of property, plant and equipment (179,084,891) (150,580,289)
payment for capital work in progress (59,367,881) -
Reserve on
revaluation

60,631,183

60,631,183

60,631,183
-

-
-

-
-

-
-

Net cash used in investing activities (230,432,116) (139,465,117)


of land

Taka

Cash flows from financing activities

dividend paid (378,670,132) (404,386,141)


Net cash used in financing activities (378,670,132) (404,386,141)
136,800,000

136,800,000

136,800,000
-

-
-

-
-

-
-
capital
Share

Taka

Net cash increase/(decrease) in cash and cash equivalents 28,070,172 19,629,189

Cash and cash equivalents as at 1 January 257,439,710 233,459,170


Total comprehensive income for 2013

Total comprehensive income for 2014


interim dividend for the year 2013

interim dividend for the year 2014


Transactions with the shareholders

Transactions with the shareholders


final dividend for the year 2012

final dividend for the year 2013

effect of exchange rate fluctuations on cash held 6,886,918 4,351,351


Balance as at 31 December 2013

Balance as at 31 December 2014


earlier year tax adjustment
Balance as at 1 January 2013

Cash and cash equivalents as at 31 December (Note 10) 292,396,800 257,439,710


Particulars

profit for the year

profit for the year

34 35
2014
Bata Shoe Company (Bangladesh) Limited
notes to the financial statements as at and for the year ended 31 December 2014
1. Reporting entity

Bata shoe company (Bangladesh) limited (hereinafter referred to as "Bata"/"the company") is a public company
limited by shares. it was incorporated in Bangladesh in 1972 under the companies act 1913. the address of the
registered office of the company is tongi, Gazipur, Bangladesh. the company is one of the operating companies of
worldwide Bata shoe organization (Bso). the shares in the company are listed in both dhaka stock exchange
(dse) and chittagong stock exchange (cse) and mostly held by Bafin (nederland) B.v. the financial year of the
company covers one year from 1 January to 31 december.

the company is mainly engaged in manufacturing and marketing of leather, rubber, plastic, canvas footwear, hosiery
and accessories items. manufacturing plants of the company are situated at tongi and dhamrai.

2. Basis of preparation

2.1 Statement of compliance

these financial statements have been prepared in accordance with Bangladesh financial reporting standards
(Bfrs), the companies act 1994, the securities and exchange rules 1987 and other applicable laws and
regulations.

these financial statements were authorised for issue by the Board of directors at its 221st meeting held on 27 april
2015.

2.2 Basis of measurement

these financial statements have been prepared on historical cost basis except for land at tongi in the statement of
financial position which was revalued in 1979.

2.3 Functional and presentational currency

these financial statements are presented in Bangladesh taka (taka/tk) which is both functional and presentational
currency of the company. the amounts in these financial statements have been rounded off to the nearest taka
except for the amounts presented in revenue in note 19, segment reporting in note 35, related party transactions in
note 36.1 & 36.2 and operating lease payments disclosure in note 37 which have been rounded off to the nearest
thousand taka and credit facilities available as at 31 december in note 10.2 have been rounded off to the nearest
million taka.

2.4 Use of estimates and judgements

the preparation of these financial statements in conformity with Bfrss requires management to make judgements,
estimates and assumptions that affect the application of accounting policies and the reported amounts of assets,
liabilities, income and expenses. actual results may differ from these estimates.

estimates and underlying assumptions are reviewed on an ongoing basis. revisions to accounting estimates are
recognised in the period in which the estimates are revised and in any future periods affected.

information about critical judgements in applying accounting policies that have the most significant effect on the
amounts recognised in the financial statements is included in the following notes:

note 4 property, plant & equipment

note 6 deferred tax assets / (liabilities)

note 7 inventories

note 13 deferred liability

note 18 provision for tax

36 37
2014

3. Significant accounting policies 3.2.1.3.1 Accounts receivables


the accounting policies set out below have been applied consistently to all periods presented in these financial accounts receivables represent the amounts due from institutional customers, export customers etc. accounts
statements, and have been applied consistently, except as explained in note 3.3.3 which addresses review of receivables are stated net off bad debts provision.
useful lives of property, plant and equipment by management during the year 2011. provision for doubtful debts is made based on the company policy. Bad debts are written off on consideration of
the status of individual debtors.
3.1 Foreign currency
3.2.1.3.2 Cash and cash equivalents
transactions in foreign currencies are translated to the respective functional currencies of the company at
exchange rates on the date of the transactions. monetary assets and liabilities denominated in foreign currencies cash and cash equivalents comprise cash on hand, cash in transit and cash at bank including fixed deposits
on the reporting date are retranslated to the functional currency at the exchange rate at that date. having maturity of three months or less which are available for use by the company without any restriction. Bank
overdrafts that are repayable on demand and form an integral part of the companys cash management are
non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are included as a component of cash and cash equivalents.
retranslated to the functional currency at the exchange rate on the date that the fair value was determined. non-
3.2.1.4 Available-for-sale financial assets
monetary items in a foreign currency that are measured based on historical cost are translated using the exchange
rate on the date of the transaction. available-for-sale financial assets are non-derivative financial assets that are designated as available for sale or
are not classified in any of the above categories of financial assets. available-for-sale financial assets are
foreign currency differences arising on translation are recognised in profit or loss. recognised initially at fair value plus any directly attributable transaction costs. subsequent to initial recognition,
3.2 Financial instruments they are measured at fair value and changes therein, other than impairment losses and foreign currency
differences on available-for-sale debt instruments, are recognised in other comprehensive income and presented
a financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or in the fair value reserve in equity. when an investment is derecognised, the gain or loss accumulated in equity is
equity instrument of another entity. reclassified to profit or loss.
3.2.1 Non-derivative financial assets available for sale financial assets comprise security deposits.

the company initially recognises loans and receivables and deposits on the date that they are originated. all other 3.2.2 Non-derivative financial liabilities
financial assets are recognised initially on the trade date, which is the date the company becomes a party to the the company recognises all financial liabilities on the trade date which is the date the company becomes a party
contractual provisions of the instrument. to the contractual provisions of the instrument.
the company derecognises a financial asset when the contractual rights to the cash flows from the asset expire, the company derecognises a financial liability when its contractual obligations are discharged, cancelled or
or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which expired. financial liabilities comprise trade and other creditors only.
substantially all the risks and rewards of ownership of the financial asset are transferred. 3.2.2.1 Trade and other creditors
financial assets and liabilities are offset and the net amount presented in the statement of financial position when, the company recognises a financial liability initially at fair value less any directly attributable transaction costs.
and only when, the company has a legal right to offset the amounts and intends either to settle on a net basis or subsequent to initial recognition, these financial liabilities are measured at amortised cost using the effective
to realise the asset and settle the liability simultaneously. interest method.

the company classifies non-derivative financial assets into the following categories: financial assets at fair value 3.3 Property, plant and equipment
through profit or loss, held-to-maturity financial assets, loans and receivables and available for- sale financial 3.3.1 Recognition and measurement
assets.
items of property, plant and equipment excluding land are measured at cost less accumulated depreciation and
3.2.1.1 Financial assets at fair value through profit or loss accumulated impairment losses. land is measured at amount revalued in 1979.
a financial asset is classified as at fair value through profit or loss if it is classified as held for trading or is cost includes expenditures that are directly attributable to the acquisition of assets. the cost of self-constructed
designated as such on initial recognition. attributable transaction costs are recognised in profit or loss as incurred. assets includes the following:
financial assets at fair value through profit or loss are measured at fair value and changes therein, which takes - the cost of materials and direct labour;
into account any dividend income, are recognised in profit or loss. - any other cost directly attributable to bringing the asset to a working condition for the intended use;
3.2.1.2 Held-to-maturity financial assets - when the company has an obligation to remove the asset or restore the site, an estimate of the costs of
if the company has the positive intent and ability to hold debt securities to maturity, then such financial assets are dismantling and removing the items and restoring the site on which they are located; and
classified as held to maturity. Held-to-maturity financial assets are recognised initially at fair value plus any directly - capitalised borrowing costs.
attributable transaction costs. subsequent to initial recognition, held-to-maturity financial assets are measured at when parts of an item of property, plant and equipment have different useful lives, they are accounted for as
amortised cost using the effective interest method, less any impairment losses. separate items (major components) of property, plant and equipment.
3.2.1.3 Loans and receivables any gain or loss on disposal of an item of property, plant and equipment (calculated as the difference between the
loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active net proceeds from disposal and the carrying amount of the item) is recognised in profit or loss.
market. such assets are recognised initially at fair value plus any directly attributable transaction costs. 3.3.2 Subsequent costs
subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective subsequent expenditure is capitalised only when it is probable that the future economic benefits associated with
interest method, less any impairment losses. the expenditure will flow to the company. ongoing repairs and maintenance is expensed as incurred.

38 39
2014

3.3.3 Depreciation 3.6 Share capital


items of property, plant and equipment are depreciated on a straight-line basis in profit or loss over the estimated paid up capital represents total amount contributed by the shareholders and bonus shares issued by the company
useful lives of each component. land is not depreciated. to the ordinary shareholders. Holders of ordinary shares are entitled to receive dividends as declared from time to
addition during the year of property, plant and equipment are depreciated for full year irrespective of date of time and are entitled to vote at shareholders' meetings. in the event of a winding up of the company, ordinary
acquisition, while no depreciation is charged in the year of disposal. shareholders rank after all other shareholders and creditors and are fully entitled to any residual proceeds of
liquidation.
the estimated useful lives for the current and comparative years of property, plant and equipment are as follows:
3.7 Employee benefits
Year Year the company maintains both defined contribution plan and defined benefit plan for its eligible permanent employees.
2014 2013 the eligibility is determined according to the terms and conditions set forth in the respective deeds.
Building 40 40
3.7.1 Defined contribution plan
plant and machinery 13.33 13.33 a defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a
motor vehicles 5 5 separate entity and has no legal or constructive obligation to pay further amounts. obligations for contributions to
furniture, fixtures and equipment 4-13.33 4-13.33 defined contribution plans are recognised as an employee benefit expense in profit or loss in the periods during which
related services are rendered by employees.
depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if the company maintains three contributory provident funds for its permanent employees categorised as managers,
appropriate. the useful lives and depreciation method of certain type of property, plant and equipment were officers and supervisors and workers. the company also maintains a managerial staff pension fund which was a
revised in 2011.
defined benefit as contribution plan. these are administered by the Boards of trustees.
3.3.4 Capital work in progress
3.7.2 Defined benefit plan
property, plant and equipment that is being under construction/acquisition is accounted for as capital work in a defined benefit plan is a post-employment benefit plan other than a defined contribution plan. the companys net
progress until construction/acquisition is completed and measured at cost.
obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future
3.4 Inventories benefit that employees have earned in return for their service in the current and prior periods.
inventories except raw material in transit are measured at the lower of cost and net realisable value. the cost of the company maintains an unfunded gratuity scheme, provision in respect of which is made annually for the
inventories is based on the first-in first-out principle, and includes expenditure incurred in acquiring the inventories, employees other than managerial staff. Gratuity payable at the end of each year has been determined on the basis
production or conversion costs and other costs incurred in bringing them to their existing location and condition. of existing rules and regulations of the company. actuarial valuation of the gratuity fund is carried out by a
in the case of manufactured inventories and work in progress, cost includes an appropriate share of production professional actuary.
overheads based on normal operating capacity.
Short-term employee benefits
net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related
completion and selling expenses.
service is provided. a liability is recognised for the amount expected to be paid under short-term cash bonus or profit-
3.5 Impairment sharing plans if the company has a present legal or constructive obligation to pay this amount as a result of past
service provided by the employee, and the obligation can be estimated reliably.
3.5.1 Non-derivative financial assets
a financial asset not classified at fair value through profit or loss is assessed at each reporting date to determine 3.8 Provisions
whether there is objective evidence that it is impaired. a financial asset is impaired if objective evidence of a provision is recognised if, as a result of past event, the company has a present legal or constructive obligation that
impairment as a result of one or more events that occurred after the initial recognition of the asset, and that loss can reliably be estimated, and it is probable that an outflow of economic benefits will be required to settle the
events had an impact on the estimated future cash flows of that asset that can be estimated reliably. obligation.
3.5.1.1 Financial assets measured at amortised cost 3.9 Revenue
the company considers evidence of impairment for financial assets measured at amortised cost at both a specific revenue from the sale of goods in the course of ordinary activities is measured at fair value of the consideration
asset and collective level. an impairment loss in respect of a financial asset measured at amortised cost is received or receivable, net of returns and allowances, value added tax and trade discounts.
calculated as the difference between its carrying amount and the present value of the estimated future cash flows revenue is recognised when persuasive evidence exists that the significant risks and rewards of ownership have
discounted at the assets original effective interest rate. been transferred to the customer, recovery of the consideration is probable, the associated costs and possible return
3.5.1.2 Available-for-sale financial assets of goods can be estimated reliably, there is no continuing management involvement with the goods, and the amount
of revenue can be measured reliably.
impairment losses on available-for-sale financial assets are recognised by reclassifying the losses accumulated
in the fair value reserve in equity to profit or loss. the cumulative loss that is reclassified from equity to profit or 3.10 Lease payments
loss is the difference between the acquisition cost, net of any principle repayment and amortisation, and the payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the
current fair value, less any impairment loss recognised previously in profit or loss. lease. lease incentives received are recognised as an integral part of the total lease expenses, over the term of the
3.5.2 Non-financial assets lease.
the carrying amounts of the company's non-financial assets, other than inventories and deferred tax assets, are at inception of an arrangement, the company determines whether such an arrangement is or contains a lease. this
reviewed at each reporting date to determine whether there is any indication of impairment. if any such indication will be the case if the following two criteria are met:
exists then the recoverable amount of the asset is estimated. an impairment loss is recognised if the carrying - the fulfillment of the arrangement is dependent on the use of a specific asset or assets; and
amount of an asset or its related cash-generating unit (cGu) exceeds its estimated recoverable amount. - the arrangement contains a right to use the asset(s).

40 41
2014

3.11 Finance income and expenses 4. Property, plant and equipment


finance income comprises interest income on funds invested, interest on shop managers account held with the
4(a) Year 2014
company and foreign exchange gain on translation of foreign currency that are recognised in profit or loss. interest
income is recognised on accrual basis. cost/valuation depreciation

finance expense comprises interest expense on overdraft, finance lease and interest on shop managers account disposals/ adjustment written down
particulars as at additions transfers as at as at charged for as at value as at
held with the company and foreign exchange loss on translation of foreign currency. all finance expenses are 1 January during during 31 december 1 January for disposals/ 31 december 31 december
recognised in the statement of comprehensive income. 2014 the year the year 2014 2014 the year transfers 2014 2014

3.12 Tax taka taka taka taka taka taka taka taka taka

income tax expense comprises current and deferred tax. income tax expense is recognised in the statement of land 1 86,057,856 - - 86,057,856 - - - - 86,057,856
comprehensive income except to the extent that it relates to items recognised directly in equity, in which case it is Building 2 377,877,942 6,201,709 - 384,079,651 181,131,213 7,915,712 - 189,046,925 195,032,726
recognised in equity.
plant and machinery 738,770,886 16,119,562 - 754,890,448 442,684,864 33,102,947 - 475,787,811 279,102,637
3.12.1 Current tax
current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively motor vehicles 25,008,751 - (4,257,655) 20,751,096 21,376,683 1,408,389 (4,257,655) 18,527,417 2,223,679
enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Bata qualifies as a
"publicly traded company"; hence the applicable tax rate is 27.50 %. it enjoys 10% rebate on income tax payable furniture, fixtures
and equipment 611,965,123 156,763,620 (2,307,471) 766,421,272 261,943,193 70,788,228 (1,998,025) 330,733,396 435,687,876
for declaring dividend at more than 30% of paid up capital.
1,839,680,558 179,084,891 (6,565,126) 2,012,200,323 907,135,953 113,215,276 (6,255,680) 1,014,095,549 998,104,774
3.12.2 Deferred tax
deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities 4(b) Year 2013
for financial reporting purposes and the amounts used for taxation purposes. deferred tax is measured at the tax cost/valuation depreciation
rates that are expected to be applied to the temporary differences when they are reversed, based on the laws that disposals/ adjustment written down
have been enacted or substantively enacted by the reporting date. deferred tax assets and liabilities are offset if particulars as at additions transfers as at as at charged for as at value as at
there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied 1 January during during 31 december 1 January for disposals/ 31 december 31 december
2013 the year the year 2013 2013 the year transfers 2013 2013
by the same tax authority on the same taxable entity.
taka taka taka taka taka taka taka taka taka
a deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the land 1 86,057,856 - - 86,057,856 - - - - 86,057,856
extent that it is probable that future taxable profits will be available against which they can be utilised. deferred tax
assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related Building 2 376,199,684 1,678,258 - 377,877,942 173,370,544 7,760,669 - 181,131,213 196,746,729

tax benefit will be realised. plant and machinery 715,581,267 34,001,788 (10,812,169) 738,770,886 420,509,650 32,483,177 (10,307,963) 442,684,864 296,086,022
3.13 Earnings per share motor vehicles 25,008,751 - - 25,008,751 19,648,227 1,728,456 - 21,376,683 3,632,068
the company presents basic and diluted (when dilution is applicable) earnings per share (eps) for its ordinary
furniture, fixtures
shares. Basic eps is calculated by dividing the profit or loss attributable to ordinary shareholders of the company and equipment 501,033,308 116,959,715 (6,027,900) 611,965,123 210,026,312 57,719,700 (5,802,819) 261,943,193 350,021,930
with the weighted average number of ordinary shares outstanding during the period, adjusted for the effect of change 1,703,880,866 152,639,761 (16,840,069) 1,839,680,558 823,554,733 99,692,002 (16,110,782) 907,135,953 932,544,605
in number of shares for bonus issue, share split and reverse split. diluted eps is determined by adjusting the profit
or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding, for
the effects of all dilutive potential ordinary shares. However, dilution of eps is not applicable for these financial 1 land of tongi factory was revalued by tk. 60,631,183 in 1979.
statements as there was no dilutive potential ordinary shares during the relevant periods. 2 Building includes properties at 24 Bangabandhu avenue, dhaka which were purchased in 1985 from the Government of Bangladesh at a cost of tk.
3.14 Segment reporting 5,344,417. sale deed is yet to be executed.
an operating segment is a component of the company that engages in business activities from which it may earn
revenues and incur expenses, including revenues and expenses that relate to transactions with any of the 4.1 Depreciation charged to:
companys other components. all operating segments operating results are reviewed regularly by the companys 2014 2013
management to make decisions about resources to be allocated to the segment and to assess its performance, and Taka Taka
for which discrete financial information is available.
segment results that are reported to the management include items directly attributable to a segment as well as cost of goods manufactured (note 20.1) 32,565,175 32,168,316
those that can be allocated on a reasonable basis.
administration, selling and distribution expenses (note 22) 80,650,101 67,523,686
3.15 Duty drawback
duty drawback claimed on export sales is adjusted against cost of imported raw materials. 113,215,276 99,692,002

3.16 Sales proceeds from wastage, scrap etc. 4.2 Disposal of property, plant and equipment
sales of empty drum of chemicals, split leather and other wastage of materials have been adjusted with cost of raw
materials consumed. income from non-operating activities is recognised as other income. original accumulated Book sales mode of
particulars cost depreciation value value disposal purchaser
3.17 Workers' profit participation fund (WPPF)
taka taka taka taka
the company provides 5% of its profit before charging such expense as wppf in accordance with "the Bangladesh
machinery 4,257,655 4,257,655 - 486,238 auction various parties
labour act 2006".
computer 414,086 282,781 131,305 282,624 negotiations insurance claim / various parties
3.18 Events after the reporting period
events after the reporting period which provide additional information about the company's position at the date of furniture and
statement of financial position or those that indicate the going concern assumption is not appropriate are reflected in equipment in shops 1,893,385 1,715,244 178,141 128,793 auction various parties
the financial statements. events after the reporting period that are not adjusting events are disclosed in the notes 6,565,126 6,255,680 309,446 897,655
when material.

42 43
2014

4.3 C&F value of imported capital assets carrying amount taxable/


the import of capital assets by the company at c&f value was as follows: on the date of (deductible)
statement of temporary
financial position tax base difference
capital assets foreign currency local currency
2014 2013 2014 2013 Taka Taka Taka
(taka) (taka) (b) As at 31 December 2013
plant and machinery and usd 1,014,479 139,165 78,746,051 10,968,163 property, plant and equipment
furniture and fixtures in shops GBp - 44,447 - 5,502,514
(excluding land and certain motor vehicles) 845,586,872 629,033,786 216,553,086
eur - 123,000 - 13,265,796
1,014,479 306,612 78,746,051 29,736,473
provision for staff gratuity (net of payment) (134,506,744) - (134,506,744)
reserve against personal accounts (24,106,081) - (24,106,081)
2014 2013 net taxable temporary difference 57,940,261
Taka Taka
5. Capital work in progress
deferred tax liability (14,500,000)
Balance as at 1 January - 2,059,472
add: addition during the year 59,367,881 36,749,879
2014 2013
59,367,881 38,809,351 Taka Taka
less: transfer to property plant & equipment during the year - 38,809,351 7. Inventories
Balance as at 31 december (note 5.1) 59,367,881 - raw materials 349,157,694 414,102,307
work in process 63,491,401 43,306,956
5.1 Capital work in progress represent as follows finished goods 1,746,450,314 1,710,433,990
2,159,099,409 2,167,843,253
plant and machinery 56,203,366 -
furniture for different stores 3,164,515 - 8. Accounts receivable
59,367,881 - trade (unsecured) - considered good
6. Deferred tax assets / ( liabilities) export customers - non Bso companies 1,458,871 14,961,782
export customers - Bso companies 8,053,327 5,928,296
deferred tax assets/(liability) is arrived at as follows:
receivables from dealers 446,760,746 375,027,081
receivables from institutional sale 18,943,582 38,303,981
Balance as at 1 January (14,500,000) (12,300,000)
475,216,526 434,221,140
addition/reduction during the year 13,750,000 (2,200,000)
others (unsecured) - considered good
Balance as at 31 december (750,000) (14,500,000)
interest receivable 606,527 -
vat claims 586,664 249,379
carrying amount taxable/
import claim receivable 36,094 -
on the date of (deductible)
Joint venture commission receivable - 589,838
statement of temporary
financial position tax base difference duty drawback claim receivable - 596,876
Taka Taka Taka 1,229,285 1,436,093

(a) As at 31 December 2014


total accounts receivable 476,445,811 435,657,233
property, plant and equipment provision for doubtful debts (note: 8.1) (20,973,694) -
(excluding land and certain motor vehicles)
911,481,709 697,795,195 213,686,514 455,472,117 435,657,233

provision for staff gratuity (note 13) (162,343,000) - (162,343,000) 8.1 Provision for doubtful debts
provision for bad and doubtful debts (note 8.1) (20,973,694) - (20,973,694)
Balance as at 1 January - -
reserve against personal accounts (27,467,293) - (27,467,293)
net taxable temporary difference 2,902,527 provision made during the year 20,973,694 -

deferred tax liability (750,000) Balance as at 31 december 20,973,694 -

44 45
2014

accounts receivable are aged as below: 10. Cash and cash equivalents
2014 2013
2014 2013
Below Over Below Over
six months six months six months six months Taka Taka
Taka Taka Taka Taka cash balances:
on hand 1,817 16,325
export customers - non Bso companies 1,458,871 - 14,961,782 -
in transit:
export customers - Bso companies 8,053,327 - 5,928,296 -
from stores 33,107,436 35,328,276
receivables from dealers 426,052,762 20,707,984 375,027,081 -
from depots 37,767,000 490,000
receivables from institutional sale 18,677,872 265,710 38,303,981 - from institutions 4,986,350 47,403,691
interest receivable 606,527 - - -
vat claims 586,664 - 249,379 - Balances with banks in:
Joint venture commission receivable 36,094 - 589,838 - current accounts
duty draw back claim receivable - - 596,876 - in taka (192,689,653) (109,532,576)
455,472,117 20,973,694 435,657,233 - in usd 2,885,844 19,420,791
fixed deposits 200,000,000 6,000,000
8.2 Debts due by directors, officers and other related parties short term deposits 206,338,006 258,313,203
as at 31 december 2014, accounts receivables does not include any amount due by: 216,534,197 174,201,418
(a) directors and other officers of the company; 292,396,800 257,439,710
(b) firms or private limited companies respectively in which any director of the company is a partner, director or member, 10.1 Book overdrafts
other than those disclosed in note 34.1; and the current accounts include book overdrafts (i.e. cheque outstanding in excess of deposits) from eastern Bank
(c) companies under the same management. limited and HsBc as follows:
2014 2013
2014 2013 Taka Taka
Taka Taka
eastern Bank limited 200,021,799 122,976,414
9. Advances, deposits and prepayments
HsBc 1,131,093 3,569,506
advances (considered good) to:
201,152,892 126,545,920
agents and employees 15,378,295 2,729,173
suppliers against materials and services 6,695,559 8,931,150 10.2 Credit facilities available as at 31 December
22,073,854 11,660,323 the company enjoys both funded and non funded short term working capital facilities with two banks. the non funded
facilities include letters of credit (lc), letters of Guarantee, packing credit, ldBp, fdBp and foreign exchange
advance income tax 179,048,804 148,413,771
forward contracts (fx forward). the funded facilities include overdraft facility, short term loan and import loan. the
security and other deposits 485,239,534 441,512,793 aggregate amount of available short term working capital facilities is tk 1,000 million (2013: tk 1,000 million) of which
prepayments to landlords (current portion - note 9.1) 112,505,946 101,400,767 non funded limit is tk 700 million (2013: tk 700 million) and funded limit is tk 300 million (2013: tk 300 million).
798,868,138 702,987,654
details of the total facilities are stated below:
(a) HSBC Bank
9.1 Prepayments of rent
i) l/c facility - tk 300 million (2013: tk 300 million).
prepayments to landlords 249,417,850 215,365,767 ii) overdraft / short term loan facility - tk 100 million (2013: tk 100 million).
less: current portion (note 9) 112,505,946 101,400,767
non-current portion 136,911,904 113,965,000 (b) EBL Bank
i) l/c facility - tk 394 million (2013: tk 394 million).
9.2 Loans and advances to directors, officers and other related parties ii) overdraft facility / short term loan facility - tk 200 million (2013: tk 200 million).
other than those mentioned in the note above, there were no loans or advances to: iii) letters of Guarantee - tk. 6 million (2013: tk 6 million)
(a directors of the company; 2014 2013
(b) firms or private limited companies respectively in which any director of the company is a partner, director (Tk in million) (Tk in million)
or member; and total credit facilities available 1,000 1,000
(c) companies under the same management. credit facilities availed 110 248

46 47
2014

11. Share capital 12. Reserves and surplus

2014 2013 2014 2013


Taka Taka
Taka Taka
authorised: reserve on revaluation of land 60,631,183 60,631,183
non-distributable special reserve (note 12.1) 998,620 998,620
20,000,000 ordinary shares of tk 10 each 200,000,000 200,000,000 General reserve 48,863,000 48,863,000
unappropriated profit (note 12.2) 2,323,731,090 2,009,391,340
issued, subscribed and paid up: 2,434,223,893 2,119,884,143

2,850,723 ordinary shares of tk 10 each issued for cash 28,507,230 28,507,230 12.1 Non-distributable special reserve
this represents 90% of the cumulative post-tax profit in respect of certain categories of income up to 1992 as defined
and directed by Bangladesh Bank. since 1993, the requirement for continuing to create such special reserve is
10,829,277 ordinary shares (including 7,202,400 bonus shares) applicable only to the profit on sale of immovable assets such as land, buildings, etc.
of tk 10 each issued for consideration other than cash 108,292,770 108,292,770
12.2 Unappropriated profit
136,800,000 136,800,000
2014 2013
Taka Taka
the shares are listed both in the dhaka stock exchange limited and chittagong stock exchange limited and quoted Balance as at 1 January 2,009,391,340 1,606,707,776
at tk 1,172.10 (2013: tk 690.00) and tk 1,143.80 (2013: tk 691.00) per share at 31 december 2014 respectively. profit for the year 700,670,101 813,083,564
percentage of shareholdings : earlier year tax adjustment (3,290,351) -
interim dividend (239,400,000) (266,760,000)
2014 2013
final dividend (143,640,000) (143,640,000)
% Taka % Taka 2,323,731,090 2,009,391,340

Bafin (nederland) B.v 70.00 95,760,000 70.00 95,760,000 13. Deferred liability
Balance as at 1 January 134,506,744 123,817,664
non-resident shareholders 8.05 11,012,540 7.47 10,216,680 add: provision made / (reversed) during the year 38,142,033 34,595,523
local shareholders 21.95 30,027,460 22.53 30,823,320 172,648,777 158,413,187
less: paid during the year 10,305,777 23,906,443
100.00 136,800,000 100.00 136,800,000
Balance as at 31 december 162,343,000 134,506,744
classification of shareholders by range:
deferred liability represents provision for staff gratuity up to 31 december 2014.

Shareholder's range Number of shareholders Number of shares 14. Creditors for goods
payable to local suppliers 508,452,080 450,535,227
2014 2013 2014 2013 payable to Bso companies 17,623,868 10,417,995
less than 501 shares 5,195 5,562 683,221 683,221 526,075,948 460,953,222

501 to 5,000 shares 375 432 653,626 653,626 15. Creditors for expenses
payable to local suppliers 74,952,545 43,945,078
5,001 to 10,000 shares 24 38 277,540 277,540 payable to Bso companies 271,847,898 399,679,815
10,001 to 20,000 shares 27 21 310,597 310,597 346,800,443 443,624,893

20,001 to 30,000 shares 11 5 122,768 122,768 16. Creditors for other finance
workers' profit participation fund (note 25) 53,574,742 60,699,135
30,001 to 40,000 shares 6 6 212,500 212,500 personal accounts of employees and agents 78,983,164 77,488,548
40,001 to 50,000 shares 1 3 143,100 143,100 security and other deposits 25,544,500 24,794,500
provident fund 9,168,418 6,983,994
50,001 to 100,000 shares 2 4 280,500 280,500 tax deducted at source 47,441,190 60,933,617
pension fund 1,942,427 1,992,092
100,001 to 1,000,000 shares 7 4 1,420,148 1,420,148 vat deducted at source 2,972,806 5,318,418
over 1,000,000 shares 1 1 9,576,000 9,576,000 salary and wages payable 21,321,732 20,469,098
others 21,236,548 14,660,867
5,649 6,076 13,680,000 13,680,000 262,185,527 273,340,269

48 49
2014

17. Accrued expenses 20. Cost of sales


2014 2013
2014 2013 Taka Taka
Taka Taka
stock of finished goods as at 1 January 1,710,433,990 1,393,434,546
Bonus 63,280,000 77,190,000 add: cost of goods manufactured (note 20.1) 3,795,906,908 4,160,006,319
utility 10,958,000 9,320,000 finished goods purchased 1,185,595,965 1,014,755,266
legal & audit fee 2,418,050 1,681,500 cost of finished goods available for sale 6,691,936,863 6,568,196,131
royalty 23,043,028 16,222,717 less: stock of finished goods as at 31 december 1,746,450,314 1,710,433,990
Joint venture commission 8,453,726 9,953,699
4,945,486,549 4,857,762,141
other accrued liabilities 274,613,140 261,553,868
382,765,944 375,921,784 the opening and closing stocks of goods produced are shown below:

18. Provision for tax Figures in '000 pairs


current year 331,000,000 338,000,000
Closing Opening
earlier years (net of advance tax) 248,559,130 248,559,130
stock stock
579,559,130 586,559,130
shoes 4,923 5,812

18.1 Reconciliation of effective tax


2014 2013 20.1 Cost of goods manufactured
2014 2013
% Taka % Taka Taka Taka

profit for the year 700,670,101 813,083,564


cost of materials consumed (note 20.1.1) 2,908,608,450 3,175,668,229
total income tax expense 317,250,000 340,200,000
profit excluding income tax 1,017,920,101 1,153,283,564 direct wages 539,920,622 608,160,128
prime cost 3,448,529,072 3,783,828,357
factors affecting the tax charge for current period:
manufacturing overhead:
income tax using the companys domestic tax rate 27.50% 279,928,028 27.50% 317,152,980
non-deductible expenses 8.74% 88,931,627 5.22% 60,233,055 remuneration to employees 171,410,278 166,539,121
tax exempt income -0.20% (2,000,995) -0.18% (2,033,809) Gas, water and electricity 52,694,243 53,987,687
tax incentives -3.60% (36,685,866) -3.25% (37,447,238) repairs and maintenance (note 20.1.2) 64,774,558 61,780,700
round off adjustment 0.07% 699,046 0.01% 158,298 insurance 7,612,131 6,628,127
uniform for workers - 1,295,831
under/(over) provided in prior year -1.34% (13,621,840) 0.19% 2,136,714
Health and other welfare expenses 24,048,092 19,461,945
31.17% 317,250,000 29.50% 340,200,000 travelling 7,020,354 7,272,112
postage 1,927,520 2,248,952
19. Revenue freight and transport - -
stationery 2,355,905 2,200,109
entertainment 3,154,025 3,912,495
Unit 2014 2013 depreciation (note 4.1) 32,565,175 32,168,316

Quantity Amount Quantity Amount 367,562,281 357,495,395


in '000 '000 Taka in '000 '000 Taka cost of production 3,816,091,353 4,141,323,752

local
difference in work in process:
shoes pair 29,050 7,673,652 30,885 7,536,145
Hosiery & accessories 313,467 255,830 work in process as at 1 January 43,306,956 61,989,523
work in process as at 31 december 63,491,401 43,306,956
export 89,876 87,000 (20,184,445) 18,682,567
8,076,995 7,878,975 cost of goods manufactured 3,795,906,908 4,160,006,319

50 51
2014

21. Other income

856,585,188

2,052,023,262
2,908,608,450

3,175,668,229

repairs and maintenance amounting to tk 64,774,558 includes tk 39,061,847 (including c&f value of us$ 477,120 and eur 18,120 of imported items) representing
consumption 2014 2013
Notes Taka Taka
(taka)
value

Gain /(loss) on disposal of property, plant and equipment 588,209 2,216,579


discount for early payment 19,633,377 16,208,281
20,221,586 18,424,860

22. Administration, selling and distribution expenses

actual production in pairs

22,884

7,033
29,917
2013
108,958,065

222,222,823
331,180,888

391,028,070

figures in '000
closing stock

remuneration to employees 527,535,810 432,844,696


(taka)
value

Health and other welfare expenses 13,780,529 11,447,544

cost of materials consumed is 29% imported and 71% locally purchased (2013: 32% imported and 68% locally purchased).
travelling expenses 77,962,266 64,177,638
Bank charges 1,603,264 1,518,053

19,742

7,060
26,802
repairs and maintenance 70,465,915 67,779,048

2014
stationery 17,982,488 18,859,686
duty drawback of tk. 1,353,308 claimed on export sales have been adjusted against cost of raw materials.

postage, telegram and telephone 10,406,046 10,591,968


entertainment expenses 16,370,347 19,044,746
838,960,194

2,009,801,074
2,848,761,268

3,147,328,613

subscription and donation 1,653,134 1,175,134


advertisement 34,003,739 38,701,217

26,487

9,504
35,991
2013
purchase

production capacity in pairs


(taka)
value

rent, rates and taxes 385,356,807 308,222,099


figures in '000 General charges 22.1 51,479,092 20,176,439
directors' fees 104,000 98,000
auditors' fees 546,250 517,500
26,487 legal and other professional fees 22.2 6,925,960 5,534,136

9,954
36,441
2014

insurance 5,881,058 4,405,721


land revenue 999,786 486,191
freight and transport 72,028,955 69,974,432
Statement of production capacity and actual production

packing expenses 80,936,766 65,782,437


opening stock

126,583,059

264,445,011
391,028,070

419,367,686

cost of spare parts, moulds and accessories consumed.

commission 22.3 240,690,360 259,626,584


value
(taka)

royalty on Hush puppies brand 22.4 13,592,913 11,220,757


royalty on dr. scholl brand 22.4 4,385,579 5,001,960
royalty on naturalizer Brand 22.4 434,965 -
Global footwear services fees 22.4 131,340,405 117,443,066
trade mark licence fees 22.4 171,167,152 167,796,620
it fees 9,882,726 7,333,587
20.1.1 Cost of materials consumed

electricity 67,851,316 60,037,761


20.1.2 Repairs and maintenance

depreciation 4.1 80,650,101 67,523,686


2,096,017,729 1,837,320,706
local purchase

22.1 General charges


description

imported

dhamrai

General charges comprises of provision for bad debt tk 20,973,694 (note: 8.1).
tongi
2014

2013

22.2 Legal and other professional fees


legal and other professional fees include fees of tk 1,134,700 (2013: tk 1,740,300) to the audit firms in connection
20.2

with global reporting, tax certification and services regarding assessments/appeals and advisory services.

52 53
2014

22.3 Commission 29. Profit before tax


2014 2013 profit before tax tk.1,017,920,101 (2013: tk. 1,153,283,564) includes profit amounting to tk 34,150,225 (2013: tk.
Taka Taka
96,321,757) of leather shoe factory at dhamrai and tk.983,769,876 (2013: tk. 1,056,961,807) at tongi.
retail 149,478,335 157,079,228
wholesale 90,954,453 101,594,988
export 257,572 952,368 30. Remittance of foreign currency
240,690,360 259,626,584 Amount Amount
in foreign in local
22.4 royalty on Hush puppies, dr. scholl and naturalizer brands, Global footwear services fees and trade mark licence
fees of tk 13,592,913 tk. 4,385,579 tk.434,965 tk. 131,340,405 and tk 171,167,152 respectively represent Name of party Nature of transaction Currency currency currency
equivalent foreign currency of usd 175,945, usd 56,767, usd 5,630, sGd 2,100,000 and usd 2,215,572 provided Taka
during the year. Bafin (nederland) B.v. dividend usd 3,085,147 241,315,200

23. Finance income


interest on: ssl international plc royalty on dr. scholl Brand GBp - -
fixed deposit 7,123,001 8,169,306
short term deposit 6,117,072 5,192,660 Global footwear services management services fees sGd 1,663,200 103,862,682
personal account 606,527 - pte. ltd., singapore
13,846,600 13,361,966
wolverine world royalty on Hush puppies Brand usd 127,912 10,098,681
24. Finance expenses
wide inc., usa
interest on:
overdraft 375,145 1,261,274 euro footwear Holdings it fees eur 60,000 6,525,000
personal account 4,575,875 4,786,527 s.a.r.l usd 1,318 102,773
4,951,020 6,047,801 Bata Brands s.a.r.l - trade mark licence fees usd 3,850,524 301,945,237
25. Contribution to workers' profit participation fund swiss Branch
profit from operating activities 1,062,599,263 1,206,668,534 the figures represent net off tax.
net finance income/(expenses) 8,895,580 7,314,165
profit before contribution to workers' profit participation fund 1,071,494,843 1,213,982,699 31. Earnings in foreign currency
workers' profit participation fund @ 5% 53,574,742 60,699,135
2014 2013

26. Emoluments to directors Taka Taka


remuneration 13,063,088 14,013,348 export of shoes and other footwear goods 89,875,763 87,000,227
Bonus 4,185,600 6,857,534
retirement benefit schemes 994,239 1,141,200
Housing 3,960,000 3,300,000 32. Earnings per share
22,202,927 25,312,082
32.1 Basic earnings per share (EPS)
27. Emoluments to managers
remuneration 99,558,844 85,642,410
the computation of eps is given below:
retirement benefit schemes 13,909,833 13,792,865
Housing 12,539,349 10,168,444 earnings attributable to the ordinary shareholders (net profit after tax) 700,670,101 813,083,564

126,008,026 109,603,719 weighted average number of ordinary shares outstanding during the year 13,680,000 13,680,000

28. Contribution to employees' provident fund and pension fund Basic earnings per share (eps) 51.22 59.44

during the year the company contributed the following amounts to the employees' provident fund and pension fund:
32.2 Diluted earning per share
provident fund: no diluted earnings per share is required to be calculated for the year as there was no scope for dilution during
managers 6,597,914 6,176,487
these years.
officers & supervisors 10,421,968 9,396,078
workers 11,027,469 10,415,714
28,047,351 25,988,279 33. Number of employees
pension fund 8,306,158 7,616,378 the number of employees for the whole year or part thereof who received a total remuneration of tk 36,000 and
36,353,509 33,604,657 above was 1,816 (2013: 1,464).

54 55
2014

34. Financial risk management b) Ageing of receivables


2014 2013
the management has overall responsibility for the establishment and oversight of the company's risk management
Taka Taka
framework. the company's risk management policies are established to identify and analyse the risks faced by the
company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. risk management
the ageing of gross accounts receivables as at 31 december was:
policies, procedures and systems are reviewed regularly to reflect changes in market conditions and the company's
activities. this note presents information about the company's exposure to each of the following risks, the company's
objectives, policies and processes for measuring and managing risk, and the company's management of capital. the accounts receivable were aged as below:
company has exposure to the following risks from its use of financial instruments.
Export customers - Non BSO companies
credit risk invoiced 0-30 days 1,458,871 10,709,730
liquidity risk
market risk invoiced 31-60 days - 4,252,052
1,458,871 14,961,782
34.1 Credit risk
credit risk is the risk of a financial loss to the company if a customer or counterparty to a financial instrument fails to Export customers - BSO companies
meet its contractual obligations, and arises principally from the company's receivables from dealers, institutional and
invoiced 0-30 days 2,009,362 2,694,588
export customers etc.
invoiced 31-60 days 2,678,863 1,840,583
management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis.
invoiced 61-90 days 3,365,102 1,393,125
in monitoring credit risk, debtors are Grouped according to their risk profile, i.e. their legal status, financial condition,
8,053,327 5,928,296
ageing profile etc. accounts receivable are mainly related to sale of shoes, hosiery, accessories and finished leather
etc.
Receivables from domestics
the maximum exposure to credit risk is represented by the carrying amount of each financial asset in the statement
of financial position. invoiced 0-30 days 239,917,290 236,670,250
invoiced 31-60 days 165,819,770 171,420,677
a) Exposure to credit risk
invoiced 61-90 days 22,993,621 4,038,684
the carrying amount of financial assets represents the maximum credit exposure. the maximum exposure to credit invoiced 91-365 days 20,688,011 1,201,451
risk at the reporting date was: invoiced over 365 days 16,285,636 -

2014 2013 465,704,328 413,331,062


Taka Taka
trade receivable c) Impairment losses
export customers - non Bso companies 1,458,871 14,961,782
export customers - Bso companies 8,053,327 5,928,296
impairment losses on the above receivables were recognised as per the company policy mentioned in note 3.2.1.1.
receivables from dealers 446,760,746 375,027,081
quantitative disclosure for such impairment losses are as below:
receivables from institutional sale 18,943,582 38,303,981
475,216,526 434,221,140
Receivables from dealers
others receivable 1,229,285 1,436,093
security and other deposits 485,239,534 441,512,792 accounts receivable 446,760,746 375,027,081
cash and cash equivalents 292,396,800 257,439,710 provision for doubtful debts (note 8.1) (20,960,474) -
1,254,082,145 1,134,609,735 425,800,272 375,027,081
the maximum exposure to credit risk for accounts receivable as at 31 december by geographic regions was:
Receivables from institutional sale
domestic 465,704,328 413,331,062
asia 8,053,327 15,660,570
accounts receivable 18,943,582 38,303,982
australia 1,458,871 4,644,602
provision for doubtful debts (note 8.1) (13,220) -
south america - 584,906
475,216,526 434,221,140 18,930,362 38,303,982

56 57
58
34.2 Liquidity risk
liquidity risk is the risk that the company will not be able to meet its financial obligations as they fall due. the company's approach to managing liquidity (cash and cash equivalents)
is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable
losses or risking damage to the company's reputation. typically, the company ensures that it has sufficient cash and cash equivalents to meet expected operational expenses,
including financial obligations through preparation of the cash flow forecast, based on time line of payment of financial obligations and accordingly arrange for sufficient liquidity/fund
to make the expected payments within due dates. moreover, the company has short term credit facilities with scheduled commercial banks to ensure payment of obligation in the
event that there is insufficient cash to make the required payment. the requirement is determined in advance through cash flow projections and credit lines with banks are negotiated
accordingly.

the following are the contractual maturities of financial liabilities:

As at 31 December 2014

nominal interest contractual within 6 months within 6-12


carrying amount maturity period rate cash flows or less months
taka taka taka taka
Accounts payable

Creditors for goods


payable to local suppliers 508,452,080 June 2015 n/a 508,452,080 508,452,080 -
payable to Bso companies 17,623,868 June 2015 n/a 17,623,868 17,623,868 -
526,075,948 526,075,948 526,075,948 -
Creditors for expenses
payable to local suppliers 74,952,545 June 2015 n/a 74,952,545 74,952,545 -
payable to Bso companies 271,847,898 december 2015 n/a 271,847,898 244,225,548 27,622,350
346,800,443 346,800,443 319,178,093 27,622,350
Creditors for other finance
personal accounts of employees and agents 78,983,164 June 2015 8.5% 78,983,164 1,538,675 77,444,489
security and other deposits 25,544,500 June 2015 n/a 25,544,500 25,544,500 -
tax deducted at source 47,441,190 June 2015 n/a 47,441,190 47,441,190 -
vat deducted at source 2,972,806 June 2015 n/a 2,972,806 2,972,806 -
salary and wages payable 21,321,732 June 2015 n/a 21,321,732 21,321,732 -
others liabilities 21,236,548 June 2015 n/a 21,236,548 21,236,548 -
197,499,940 197,499,940 120,055,451 77,444,489
Accrued liabilities
Bonus 63,280,000 June 2015 n/a 63,280,000 63,280,000 -
utility 10,958,000 June 2015 n/a 10,958,000 10,958,000 -
legal & audit fee 2,418,050 June 2015 n/a 2,418,050 2,418,050 -
royalty 23,043,028 June 2015 n/a 23,043,028 4,629,571 18,413,457
Joint venture commission 8,453,726 June 2015 n/a 8,453,726 8,453,726 -
other accrued liabilities 274,613,140 december 2015 n/a 274,613,140 68,029,136 206,584,004
382,765,944 382,765,944 157,768,483 224,997,461

Unclaimed dividend 68,717,138 december 2015 n/a 68,717,138 42,000,000 26,717,138

exposure to liquidity risk in respect of the company's financial statements at 31 december 2014 does not vary significantly from above.

As at 31 December 2013

nominal interest contractual within 6 months within 6-12


carrying amount maturity period rate cash flows or less months
taka taka taka taka

Accounts payable

Creditors for goods


payable to local suppliers 450,535,227 June 2014 n/a 450,535,227 450,535,227 -
payable to Bso companies 10,417,995 June 2014 n/a 10,417,995 10,417,995 -
460,953,222 460,953,222 460,953,222 -
Creditors for expenses
payable to local suppliers 43,945,078 June 2014 n/a 43,945,078 43,945,078 -
payable to Bso companies 399,679,815 december 2014 n/a 399,679,815 231,883,195 167,796,620
443,624,893 443,624,893 275,828,273 167,796,620
Creditors for other finance
personal accounts of employees and agents 77,488,548 June 2014 8.5% 77,488,548 7,402,507 70,086,041
security and other deposits 24,794,500 June 2014 n/a 24,794,500 24,794,500 -
tax deducted at source 60,933,617 June 2014 n/a 60,933,617 60,933,617 -
vat deducted at source 5,318,418 June 2014 n/a 5,318,418 5,318,418 -
salary and wages payable 20,469,098 June 2014 n/a 20,469,098 20,469,098 -
others liabilities 14,660,866 June 2014 n/a 14,660,866 14,660,866 -
203,665,047 203,665,047 133,579,006 70,086,041
Accrued liabilities
Bonus 77,190,000 June 2014 n/a 77,190,000 77,190,000 -
utility 9,320,000 June 2014 n/a 9,320,000 9,320,000 -
legal & audit fee 1,681,500 June 2014 n/a 1,681,500 1,681,500 -
royalty 16,222,717 June 2014 n/a 16,222,717 - 16,222,717
Joint venture commission 9,953,699 June 2014 n/a 9,953,699 9,953,699 -
other accrued liabilities 261,553,868 december 2014 n/a 261,553,868 134,168,975 127,384,893
375,921,784 375,921,784 232,314,174 143,607,610

Unclaimed dividend 64,347,270 december 2014 n/a 64,347,270 39,000,000 25,347,270

exposure to liquidity risk in respect of the company's financial statements at 31 december 2013 does not vary significantly from above.
2014

59
2014

34.3 Market risk b) Interest rate risk


market risk is the risk that any change in market prices, such as foreign exchange rates and interest rates will affect the the interest bearing financial instrument for the company is the short term deposit (std) account maintained by the company
company's income or the value of its holdings of financial instruments. the objective of market risk management is to
manage and control market risk exposures within acceptable parameters. with its commercial banks. these are highly liquid and very short term deposits with nominal interest rate. interest rate fluctuation
for such investment have little impact on financial statements. therefore, interest rate risk for the company is insignificant.
a) Currency risk/foreign exchange rate risk
the company is exposed to currency risk on sales and purchases with foreign customers and suppliers including Bata c) Accounting classification and fair values
Group (globally) and on royalty payment. majority of the company's foreign currency transactions are denominated in usd.
the company maintains usd bank account where all receipts are deposited and all corresponding payments are made. fair value of financial assets and liabilities together with carrying amount shown in the statement of financial position are
as follows:
i) Exposure to currency risk
the company's exposure to foreign currency risk was as follows based on notional amounts: 2014 2013
carrying amount fair value carrying amount fair value
As at 31 December 2014 As at 31 December 2013
Taka Taka Taka Taka
usd sGd eur usd sGd eur
Foreign currency denominated assets
Receivables, cash & cash equivalent
accounts receivable 123,592 - - 274,750 - - trade receivable, net 475,216,526 475,216,526 434,221,140 434,221,140
cash at bank other receivables 1,229,285 1,229,285 1,436,093 1,436,093
islamic Bank Bangladesh limited - - - 54,706 - -
eastern Bank limited 22,225 - - 162,660 - - cash and cash equivalents 292,396,800 292,396,800 257,439,710 257,439,710
HsBc 15,129 - - 33,920 - -
total 160,946 - - 526,036 - - Available for sale financial assets
Foreign currency denominated liabilities security deposits 485,239,534 485,239,534 441,512,793 441,512,793

trade and other payables for expenses (2,443,418) (1,890,000) (86,667) (4,330,133) (1,663,200) (66,000) Liabilities carried at amortised costs
total (2,443,418) (1,890,000) (86,667) (4,330,133) (1,663,200) (66,000) creditors for goods 526,075,948 526,075,948 460,953,222 460,953,222
net exposure (2,282,472) (1,890,000) (86,667) (3,804,097) (1,663,200) (66,000)
creditors for expenses 346,800,443 346,800,443 443,624,893 443,624,893
creditors for other finance 262,185,527 262,185,527 273,340,267 273,340,267
payable to other entities represents payable for Global footwear service fees, it fees etc. accrued expenses 382,765,944 382,765,944 375,921,784 375,921,784
exposure to currency risk as at 31 december 2014 in respect of the financial statements does not vary from above. the
company has a foreign exchange gain amounting to tk. 6,886,918 during the year ended 31 december 2014.
the following significant exchange rates are applied during the year: 35. Segment reporting
the company has two operating segments, domestic and unallocated, which are the company's strategic divisions. they
exchange rate as at
are managed separately because they require different technology and marketing strategies. for each of the strategic
31 dec 2014 31 dec 2013
divisions, the company's management reviews internal management reports at least on a monthly basis. of these two,
taka taka
only domestic segment is reportable. the following summary describes the operations in the company's reportable
us dollar 77.26 77.29 segments:
singapore dollar 58.46 61.22
euro (eur) 93.91 106.46 Domestic this segment is mainly engaged in manufacturing and marketing of leather, rubber, plastic and canvas
footwear, hosiery and accessories in domestic market.
ii) Foreign exchange rate sensitivity analysis for foreign currency expenditures
2014 2013
a strengthening or weakening of the taka, as indicated below, against the usd, sGd and eur at 31 december would have
increased/(decreased) equity and profit or loss by the amounts shown below. this analysis is based on foreign currency particulars reportable business segment reportable business segment
exchange rate variances that the company considered to be reasonably possible at the reporting date. the analysis assumes domestic unallocated total domestic unallocated total
that all other variables, in particular interest rates, remain constant. the analysis is performed on the same basis for 2014, albeit
Taka 000 Taka 000 Taka 000 Taka 000 Taka 000 Taka 000
that the reasonably possible foreign exchange rate variances were different, as indicated below:
strengthening weakening
Revenue 7,987,119 89,876 8,076,995 7,791,975 87,000 7,878,975
profit or loss profit or loss
taka taka cost of sales (4,884,620) (60,867) (4,945,487) (4,852,040) (5,722) (4,857,762)
At 31 December 2014 Gross profit 3,102,499 29,009 3,131,508 2,939,935 81,278 3,021,213
usd (0.04 percent movement) (70,538) 70,538 exchange gain/(loss) - 6,887 6,887 - 4,351 4,351
sGd (4.51 percent movement) (4,983,072) 4,983,072 other income - 20,222 20,222 - 18,425 18,425
eur (11.79 percent movement) (959,576) 959,576 administrative, selling and distribution exp. (1,546,326) (549,692) (2,096,018) (1,321,424) (515,896) (1,837,320)
Reportable segment result 1,556,173 (493,574) 1,062,599 1,618,511 (411,842) 1,206,669
At 31 December 2013
usd (3 percent movement) (8,820,560) 8,820,560 Segment assets and liabilities
sGd (6 percent movement) (6,109,266) 6,109,266 the necessary information regarding assets and liabilities of operating segments are not separable and individually identifiable
eur (1 percent movement) (70,264) 70,264 for this purpose. for this reason the assets and liabilities of the respective segments have not been presented here.

60 61
2014

36. Related party disclosures 38. Capital expenditure and financial commitment
during the year ended 31 december 2014, company entered into a number of transactions with related parties / there were no capital expenditure and financial commitments as at 31 december 2014 (2013: nil)
associated enterprises in the normal course of business. relationship with related parties / associated enterprises,
39. Contingent liabilities
nature of these transactions and amount thereof have been set out below in accordance with the provisions of Bas
24: related party disclosures. there are contingent liabilities on account of unresolved disputed corporate tax assessments and vat claims by the
authority aggregating to tk. 480,314,000 (2013: tk 460,620,000). considering the merits of the cases, it has not been
deemed necessary to make provisions for all such disputed claims.
36.1 Related party transactions
2014 2013 there is also contingent liability in respect of outstanding letters of credit of tk. 104 million (2013: tk 243 million) and letter
of guarantee of tk. 5.7 million (2013: tk 5.7 million).
Taka 000 Taka 000
relationship with company nature of transaction 40. Other disclosures

40.1 Comparatives
Holding company dividend payment (241,315) (258,552) previous year's figures have been rearranged, wherever necessary, to conform to current year's presentation.

40.2 Interim dividend


associated companies purchase of goods (328,892) (235,740)
Bata paid an interim dividend @ tk 17.50 per share of tk 10 each aggregating to tk 239,400,000 which was approved by
services received (12,349) (9,049) the Board of directors at its 220th meeting held on 24 november 2014.
sale of goods 54,504 38,518
40.3 Events after the reporting period
services provided 4,095 1,022
the Board of directors of Bata, at its 221st meeting held on 27 april 2015, proposed tk 10.50 per share, amounting to a
trade mark licence fees (171,167) (167,797)
total of tk 143,640,000 as final dividend for the year ended 31 december 2014, which represents 105% of the paid up
it fees (9,883) (7,334) capital. total dividend for the year ended 31 december 2014 including the interim dividend (see note 40.2) thus comes to
tk 383,040,000 which is 280% of paid up capital. these dividends are subject to final approval by the shareholders at the
forthcoming annual General meeting of the company.
36.2 the company in normal course of business conducts transactions with its related parties. Balances of related parties
at the reporting date have been shown under receivables and payables. the company continues to have a policy,
whereby all transactions with related parties and associated undertakings are entered into at arm's length in the light
of commercial terms and conditions.

36.3 Receivables/(payables) with related parties


2014 2013
Taka 000 Taka 000
relationship with company nature of transaction

associated companies purchase of goods (17,624) (13,390)


services received (23) -
sale of goods 8,053 1,351
services provided 36 1,337
trade mark licence fees (171,167) (14,567)
it fees (8,094) (632)

37. Operating lease payments disclosure


non-cancellable operating lease rentals are payable as follows:
2014 2013
Taka 000 Taka 000

less than one year 466,001 359,200


Between one and five years 3,006,778 1,833,752
more than five years 1,158,562 578,495
4,631,341 2,771,447

62 63
Exhibit - I
Bata Shoe Company (Bangladesh) Limited
statement of profit or loss and other comprehensive income for the year
ended 31 December 2014
2014 2013
Manufacturing Trading Total Total
Taka Taka Taka Taka

Revenue 7,012,029,483 1,064,965,554 8,076,995,037 7,878,975,170


cost of goods sold (4,346,514,269) (598,972,280) (4,945,486,549) (4,857,762,141)
Gross profit 2,665,515,214 465,993,274 3,131,508,488 3,021,213,029
other income 20,221,586 - 20,221,586 18,424,860
administration, selling and
distribution expenses (1,784,130,291) (311,887,438) (2,096,017,729) (1,837,320,706)
Profit from operating activities 901,606,509 154,105,836 1,055,712,345 1,202,317,183
finance income 17,648,371 3,085,147 20,733,518 17,713,317
finance expenses (4,214,308) (736,712) (4,951,020) (6,047,801)
contribution to wppf (45,602,820) (7,971,922) (53,574,742) (60,699,135)
Profit before income tax 869,437,752 148,482,349 1,017,920,101 1,153,283,564
tax expense:
current tax 314,159,660 16,840,340 331,000,000 338,000,000
deferred tax (13,750,000) (13,750,000) 2,200,000
300,409,660 16,840,340 317,250,000 340,200,000
Profit after tax for the year 569,028,092 131,642,009 700,670,101 813,083,564

64 65
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66 67
form of proxy
please quote
Shareholder's Folio / BO No. No. of Shares held

i/we

of

being shareholder(s) of BATA SHOE COMPANY (BANGLADESH) LIMITED, entitled to vote hereby appoint
mr./ms.
as my/our proxy to attend and vote for me/us and on my/our behalf at the 43rd annual General meeting of the
company to be held on thursday 25 June 2015 and any adjournment thereof and poll that may be taken in
consequenced thereof.

as witness my/our hand this day of 2015

signature of shareholder (s) signature of proxy

date signature of witness

revenue stamp
of tk. 20.00

(signature of shareholder (s) must be in accordance with specimen signature with the company.)

ATTENDANCE

i/we hereby record my/our presence at the 43rd annual General meeting of Bata Shoe Company
(Bangladesh) Limited at dhamrai factory, dhaka on thursday 25 June 2015 at 10:30 a.m.

full name of the shareholder


(in block letter) signature

full name of the proxy


(in block letter) signature

shareholder's folio / Bo no.


shareholders are requested to hand over the attendance slip at entrance of the meeting hall.

68 37

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