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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

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Contents
2

Board of directors

company information

notice of annual General meetinG

retail & marketinG events

manufacturinG

10

corporate social responsiBility

11.

Human resources, product development &


mercHandisinG

12

cHairman's statement

16

directors' report

20

corporate Governance

28

compliance certificate

29

audit committee report

31

auditors' report

32

statement of financial position

33

statement of profit or loss and otHer


compreHensive income

34

statement of cHanGes in equity

35

statement of casH flows

37

notes to tHe financial statements

68

form of proxy

2014

Board of directors
Rajeev Gopalakrishnan
chairman
(appointed on 1 april 2014)
Present position
Group managing director, Bata emerging markets, south asia

Shaibal Sinha
director
Present position
senior vice president-Business development & finance
Bata emerging markets

Previous positions
managing director, Bata shoe company (Bangladesh) limited
managing director, Bata shoe of thailand public company limited
vice president, retail operations, Bata india limited
vice president, wholesale operations, Bata india limited

Previous position
chief financial officer, Bata india

Fernando Garcia Restrepo


chairman
(retired on 1 april 2014)

Rashidul Hasan
independent director

Present position
Group managing director, manufacturing
Previous positions
Group managing director, Bata emerging markets (west)
president director, Bata indonesia
managing director, Bata kenya
managing director, Bata india
vice president, wholesale & marketing, Bata ltd, toronto, canada
managing director, Bata Bangladesh

Present positions
chairman, uttara finance & investments ltd.
independent director, reckitt Benckiser Bangladesh ltd.
independent director, monno Group of industries
trustee, kumudini welfare trust of Bangladesh ltd.
Previous positions
founder chairman of idlc the first joint venture leasing company of Bangladesh
ceo & managing director of ipdc the first joint venture investment company of
Bangladesh.
director General, department of industries of the republic of Bangladesh

Chitpan Kanhasiri
Present position
vice chairman & managing director
(appointed on 1 april 2014)
Previous positions
acting company manager, Bata malaysia sdn Bhd
retail & non retail sales manager, Bata (thailand) limited

K M Rezaul Hasanat
independent director
Present position
chairman and ceo, viyellatex Group
trustee, Bangladesh csr center.
advisory Board member, Green industry platform, unido

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

2014

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Company Information

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Company Secretary
md. Hashim reza

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Auditors
Hussain farhad & co.
chartered accountants
House # 15, road # 12
Block-f, niketon Gulshan-1
dhaka-1212

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Corporate Governance
Compliance Auditors
arun & anjan
chartered accountants
House # 18 (4th floor), road # 16
(old -27), dhanmondi
dhaka -1209

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Legal Advisers
law valley
amin uddin & associates
mahbubul Hoque & associates

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Bankers
eastern Bank ltd.
dutch Bangla Bank ltd.
HsBc ltd.
islami Bank (Bangladesh) ltd.

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Factories
1. tongi, Gazipur
2. dhamrai, dhaka

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Registered Office
Bata shoe company (Bangladesh) limited
tongi industrial area
tongi, Gazipur

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1.

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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

tongi, 27 april 2015

Md. Hashim Reza


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.

2014

retail
Bangladesh Brand forum (BBf) is an initiative with the vision: transforming
Bangladesh through applying Branding ethos among local corporate. with its
clear vision and to recognize leaders in Bangladeshs corporate sector in the
year 2014, Bangladesh Brand Forum (BBF) in collaboration with Millward
Brown, a leading rating agency organized an award ceremony named Best
Brand Award 2014. the award unveiled the most highlighted brands in
Bangladesh in 30 categories, which was done through an extensive
nationwide survey by millward Brown, Bangladesh.

our retail channel continues to grow with the current setup along with the new
stores having achieved a growth of 8% as compared to previous year. in order to
sustain this growth and to provide friendly and modern atmosphere in the stores,
an amount of tk. 152.9 million has been spent to open twenty one new stores at
key business locations. moreover, fifteen stores have also been renovated during
this period. much of the expansion / renovation were focused on the big format
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
Bangladesh introduced many exclusive new lines of shoes the majority of which comes during festival periods.
these new arrivals were introduced in different Bata brands. some of them are as follows:

in our manufacturing operations we undertook some further restructuring in line


with company objectives at the beginning of the year. as a result, our production
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, ambassador, marie claire, moccassino, weinbrenner, Bata comfit, patapata,
power, north star and Bubblegummers. the launching of the new arrivals this year
brings out many different colorful collections and quality footwear by Bata.
uncompromising quality with striking designs have put Bata shoes in a key position
to appeal to different segments of consumers. the fashion show was segmented
in different categories (mens, ladies and children) and different lifestyles following
the latest trend with the country's top fashion models ramping.

Bata industrials
as one of the largest manufacturers of safety shoes, Bata plays a major role in safeguarding
the health of the worlds workers. from the heavy duty work boots to elegant and sporty
footwear, Bata industrial has a wide range of shoes for every vocation, where safety counts.
the brands exclusive features include; shock absorbing tunnel system, tritech plus antislip soles, Bata cool comfort linings and integrated tpu toe caps. Harnessing its global
expertise, Bata industrial provides the highest level of protection while keeping the wearers
feet cool and comfortable while on the job.

2014

corporate social responsibility

BCP-BANGLADESH, SCHOLARSHIP FOR EMPLOYEE'S CHILDREN


under Bata childrens program Bata Bangladesh arranged a scholarship
program on 18th march, 2014. in this program they gave away
scholarship to five children of permanent unionized employees of tongi
and dhamrai who did outstanding result on their secondary examination.

Human resources

we are very much focused improving the professional skills of the


human resources of the company. a large number of our personnel
participated in both overseas and local training programmes and
seminars. during 2014 a total of 9 employees participated in 9
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
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.

BCP-Bangladesh, Art Competition & Health Check up program

product development & merchandising


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
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
full support to make the program successful. Bcp-Bangladesh also
donated a bookshelf with books on various categories and toys for the
library of the school.
BCP BANGLADESH-HEALTH CHECKUP & SHOE DONATION
PROGRAM

Weinbrenner
Built to suit the true outdoor explorers, weinbrenner embodies the essence of nature,
exploration and leisure. weinbrenner features heavy duty materials combined with rugged
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
echoes with the true blue explorers it caters to.

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,
dhaka.10 Bcp volunteers gave their full support to make the program
successful. Bcp-Bangladesh also donated school shoes, socks and
toiletries item to those children. children received refreshment after the
program.

Bubblegummers
stylish and colorful shoes for active kids. an international brand, specializing in childrens
footwear, clothes and accessories, which is constantly innovating new designs and
enhancing the quality of its products. Bubblegummers specializes in fun, fashionable
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
17th december, 2014 at maer achol shelter, mirpur on the occasion of
celebrating international Girls day.
Bcp-Bangladesh donated two sewing machines to those underprivileged
girls for their self dependent. 6 Bcp volunteers gave their full support to
make the program a successful.

10

Patapata
colorful, funky and carefree. theres a certain energy that comes from being outside on a
sun-splashed day in a world alight with promise. whether youre vacationing in the beaches
of st.martins or just puttering around the house, patapata is like a little holiday for your feet.
vibrant and fun, with distinctive designs that lets one express their playful side.

11

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2014

chairman's statement 2014


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Rajeev Gopalakrishnan
chairman

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12

dear shareholders,
on behalf of the Board, i welcome you all to the 43rd
annual General meeting of the company and feel pleased
to present the annual review of the companys
performance and the audited financial statements for the
year ended december 31, 2014.
the year 2014 was yet another difficult year as far as
business and economic environment is concerned. the
country experienced legacies of 2013 in the form of
agitated political disorder accompanied with strikes, hartals
and road blockades especially in the second half of the
year. even so your company remained committed to
achieve its target. the operational performance, in terms of
production and sales were achieved under the incredible
guidance of our management team despite, bleak law and
order situation, persistent inflationary pressure and some
in-house issues linked to sales staff that negatively
impacted the business.
the company business witnessed its record level with net
turnover of tk. 8.077 billion signifying a growth of 3% over
last year. the Gross profit was recorded at tk. 3.132 billion
with improvement of 4% over previous year. operating
profit slightly decreased from tk. 1.207 billion to tk.1.063
billion, showing a decrease of 12% as compared to
previous year. this decline is mainly because of increase
in stores lease agreement cost and settlement with the
sales staff to increase their commission percentage and
certain allowances. profit after taxation was tk. 700.670
million compared to tk. 813.084 million of last year. it is
also worth mentioning here that our company achieved
return on equity of 27.26% and earnings per share of tk.
51.22.
the company has an effective cash flow management
system in place whereby cash inflows and outflows are
projected on regular basis. the Board is satisfied that there
are no short or long term financial constraints at the close
of the period.
Based on the performance and progress made by the
company, your directors have decided to recommend
105% final cash dividend. this will make a total 280% cash

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dividend for the year 2014 inclusive of 175% interim cash


dividend which has already been paid in december, 2014.
our retail channel continues to grow with the current setup
along with the new stores having achieved a growth of 8%
as compared to previous year. in order to sustain this
growth and to provide friendly and modern atmosphere in
the stores, an amount of tk. 152.9 million has been spent
to open twenty one new stores at key business locations.
moreover, fifteen stores have renovated during this period.
much of the expansion / renovation were focused on the
big format 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.
performance from our wholesale division was slightly
below than the last year reason being more competition in
the market with the local and imported merchandize
available especially in the low price articles like thongs,
plastic and injected. company has already noticed the
change in this segment. new product is being introduced to
overcome this challenge to provide opportunity to grow the
business significantly and to capture unit sales, market
share and also average selling price. all this will be
achieved without the need to buy the business through
extended credit having absolute control over account
receivables from dealers and distributors.
export business showed an increase of 3% over the last
year as a result of shifting business to high priced leather
collection as compared to conventional products to other
associate companies.
in our manufacturing operations we undertook some
further restructuring in line with company objectives at the
beginning of the year. as a result, our production 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.
your company constantly introduced new products in all
categories; taking into account consumer demand in
various market segments for new styles and designs,
without ignoring the necessity for volume sales, which is
our traditional strength, particularly in thongs, sandals and
summer lines. this initiative included improving the status
of our footwear, gaining loyalty and introducing the latest
branded product for our valued customer.
the company continues to be a major contributor to the
national exchequer and during 2014, paid tk. 2.064 billion
in corporate tax, vat, custom duty and other levies which
was 15% more than the last year.
our sterling performance has made us a market leader in
the shoe business. the company also managed to achieve
Brand of the year award and icmaB certificate of merit
for Best corporate report domestically and second
position in Bata award of the year in category crs under
Jita project which is empowering womens within the
country to involve themselves in the rural area sales
project. this proves our commitment and enthusiasm
towards the growth of the company.

13

Avcbv`i Kvvwb `ki mgvRi K_v weePbv Ki 2014 evUv


wPjWbm& cvMvgi AvIZvq Qv`i ga Qvew Pvjy KiQ| GiB
AvIZvq Ux Ges avgivBqi BDwbqbfz 5 Rb vqx Kgxi mvb`i
ga gvawgK cixvq Amvgvb djvdji Rb ew c`vb Kiv nq|
ZvQvov wPjWbm& cvMvgi AvIZvq mgvRi myweav ewZ wk`i
AskMnb GKwU Avb`gq wPvsKb cwZhvwMZv, Zv`i ^v cixv
I KviLvbv cwi`kbi eev KiQ|

Kvvwbi eemv ew ejvsk wbfi Ki Dchy cwkbi gvag


Kgx`i `Zv ewi Dci| Kvvwb GiB avivevwnKZvq gvbe m`
Dbqb, Kvvwbi chywMZ mmvib I eemv cmvkbi DbwZZ
h_ mgq I A_ wewbqvM KiQ| GwU Kvvwbi GKwU Pjgvb
cwqv| Avgv`i Kgx`i cwkb memgq fwelZi Rb GKwU
wewbqvM wnme weePbv Kiv nqQ hvZ Zv`i Rb my I wbivc`
KvRi cwiek c`vb Kiv hvq|
eQievcx kwgK-eevcbv mK LyeB mnv`c~b wQj| kwgK`i
wZbeQi gqv`x PzwwU AvMvgx Ryb Dxb nj Zv`i `vex`vIqv I
ewaZ eZb myweavw` wbq AvjvPbv Ki bZzb Pzw ^vwiZ ne|
Avwg Avkv ivwL fvj djvdj ARbi j eevcbv I wmweG
mswk Dfqi ga GKwU mvlRbK mK eRvq ivLe | my`i
Kggq cwiek I kvwc~Y my`i mK eRvq ivLvi Rb Kvvwb
GeQi GKwU evwlK ebfvRb I AvtwefvMxq wKU Ljvi
AvqvRb Ki|
cwiPvjKgjxZ GKwU cwieZb GmQ| eevcbv cwiPvjK wnme
wg. Kzgvi wbZk Gi RvqMvq wg. wPUcvb Kvbnvkix `vwqZ Mnb
KiQb| Avwg Zuvi cksmbxq D`vM I w`K wb`kbvq Kvvwb
AbK `~i GwMq hve Avkv KiwQ|

Kvvwbi msNwewa Abymvi eevcbv cwiPvjK wg. wPUcvb


Kvbnvkix Qvov Abvb cwiPvjKe` GB evwlK mfvq Aemi Mnb
Kijb Ges cybtwbevPbi hvM weavq cv_x njb|

2014 mvji 30 wWm^i Avcbv`i Kvvwbi 10 UvKvi cwZwU


kqvi XvKv K GP 1,172.10 UvKv Ges PMvg K GP
1,143.80 UvKvq q-weq nq|

Avgiv hw` mvgb GZ PvB Zvnj Avgv`i m`v cwieZbkxj


A_bwZK, wecbb kZvejx I k cwZwZvi gvKvejv KiZ
ne| Avgv`i h kw iqQ Zv w`q Avgiv fwelZ mB mKj
cwZhvwMZvK mdjfve AwZg KiZ cvie|

14

your company believes in the development of the


community in the country. in the year 2014 under Bata
childrens (Bcp) program your company arranged a
scholarship program. under this, five scholarships have
been awarded to the children of permanent unionized
employees of both factories who did outstanding result in
their secondary school examination. Bcp also arranged a
colorful art competition, health check and factory visit
attended by underprivileged children.
the growth of our business is highly dependent on the
skills imparted to our personnel through sound training.
the company has invested considerable time and money
on developing human resources during the period to
acquire latest development in the field of technology and
business administration. this would be the ongoing
process for future periods. training of our employees has
always been considered as an investment for the future
with the objective to provide them with safe and healthy
working environment.
during the year, management and labour relations were
very cordial showing full harmony. a three-year agreement
is expiring in June next year and will be signed with the
union, which would provide increased benefits and higher
income to our unionized staff. i hope that the management
and the c.B.a. will maintain a satisfactory relationship to
achieve better results for the benefit of all concerned. an
event like annual picnic and departmental cricket
competition was also held to provide them pleasant
environment.
one change has been witnessed in the composition of the
Board, where mr. chitpan kanhasiri took over as managing
director; in place of mr. kumar nitesh. i would like to place
on record my utmost regards and appreciation for his
admirable efforts towards the growth of the company.
in accordance with the articles of association of the
company, all the directors, except the managing director,
mr. chitpan kanhasiri will retire at the annual General
meeting and being eligible offer themselves for re-election.
your company shares of a nominal value of tk. 10.00
were traded at tk 1,172.10 on the dhaka stock exchange
and tk. 1,143.80 on the chittagong stock exchange
respectively on 30, december 2014.
as we move forward, we are certain to face competitions
and challenges due to ever changing economic and
marketing conditions. Based on our strengths we are
confident to overcome successfully all the challenges in
future.

Avwg cwiPvjKgjxi c _K Kvvwbi cwZ AevnZ mvnvh I


mnhvwMZvi Rb ZvmvaviY huviv Avgv`i cYi Dci Avv
iLQb, Avgv`i KgKZv-KgPvixe`, mKj kqvinvvie`,
Ges MYcRvZx evsjv`k miKvii wbKU KZZv cKvk I abev`
vcb KiwQ|

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


my gratitude and appreciation to our customers for their
confidence in our products, our employees for their efforts,
all other stakeholders and the Government of the peoples
republic of Bangladesh for their continuous support and
cooperation extended to the company.

ivRxf MvcvjvKvb
Pqvigvb

Rajeev Gopalakrishnan
chairman

15
15

2014

directors' report 2014


your directors have pleasure in submitting their report and audited financial statements of the company for
the year ended 31 december 2014 along with the preceding five years as follows:
Industry Outlook

Audit Committee Meeting


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
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
market conditions.

mr.
mr.
mr.
mr.
mr.
mr.
mr.

Cost of Sales & Profit Margin


the overall costs of raw materials remain stable internationally. so, the cost of sales has decreased in 2014 as
compared to net turnover due to strict control over the consumption of raw materials and other cost of
production. consequently the gross profit has increased over that of 2013.

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:

net profit before tax

2014
Taka
000

2013
Taka
000

2012
Taka
000

2011
Taka
000

2010
Taka
000

1,017,920

1,153,284

971,389

793,620

742,971

629,692

317,250

340,200

299,473

213,003

199,000

180,286

Net profit after tax

700,670

813,084

671,916

580,617

543,971

449,406

2,009,391

1,606,707

1,313,782

1,075,166

873,194

724,748

(3,240)

(2,791)

2,706,771

2,414,792

1,982,907

1,655,782

1,417,166

1,174,154

un-appropriated profit brought forward

loss on BB export winding up


Profit available for appropriation

From which the Directors recommended the following appropriations:


final dividend paid (previous year)

143,640

143,640

143,640

143,640

143,640

143,640

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

2,323,731

2,004,391

1,606,707

1,313,782

1,075,166

873,194

Un-appropriated profit carried forward

16

chairman independent director


member (resigned on 1 april 2014)
member (appointed on 1 april 2014)
member (resigned on 1 april 2014)
member (appointed on 1 april 2014)
member
member as independent director

the audit committee has performed regularly the following activities:

2009
Taka
000

provision for tax

earlier year tax adjustment

Reports on Activities of the Audit Committee

Key Operating & Financial Information

Financial results

rashidul Hasan
fernando Garcia restrepo
rajeev Gopalakrishnan
kumar nitesh
chitpan kanhasiri
shaibal sinha
k m rezaul Hasanat

oversee the financial reporting.

monitoring the choice of accounting policies, principles, internal control and risk management process.

oversee performance of statutory auditors.

reviewing the annual financial statements before submission to the Board for approval.

reviewing the statement of significant related party transactions.

The System of Internal Control


the Board of directors assures the shareholders that the company has a robust risk management process to
ensure that the system of internal control is sound in design and has been effectively implemented and
monitored. although it is possible that all risks to the business are not known at present, the company takes
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
adequate to address these risks.
Directors Declaration as to Financial Statements
as part of preparation and presentation of the financial statements, the directors also report that:

Dividend

a)

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
tk. 143,640,000 thus making a total dividend of tk. 28 per share amounting to tk. 383,040,000.

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.

b)

proper books of accounts of the company have been maintained as required by law.

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 directors retiring as per article 104 of the companys articles of association are mr. rajeev Gopalakrishnan,
mr. shaibal sinha, mr. rashidul Hasan and mr. k m rezaul Hasanat and being eligible offer themselves for
re-election.

the financial statements were prepared in accordance with Bangladesh accounting standards (Bas) and
Bangladesh financial reporting standards (Bfrs) as applicable in Bangladesh and there has not been any
departure there from.

e)

the md and fd have certified to the Board that:


17

2014

i)

they have reviewed the financial statements and believe:


a)
b)

ii)

these statements do not contain any materially untrue statement or omit any material fact or
contain statements that might be misleading;
these statements together present a true and fair view of the companys affairs and are in
compliance with existing accounting standards and applicable laws.

there are, to the best of their knowledge and belief, no transactions entered into by the company
during the year which are fraudulent, illegal or in violation of the companys codes of conduct.

Pattern of Shareholdings

Annexure - 1

names of the shareholders along with their position of the shares are listed below:
Names of the shareholders
i)
ii)

Auditors

Number of
share held

% holding

9,576,000

70.00

directors/ceo/cs/cfo/audit Head and their


spouses and minor children
mr. rashidul Hasan

64

0.00

parent/subsidiary/associate/related parties:
Bafin nederland (B.v.)

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
till the next annual General meeting.

iii)

executives (Head of functions)

nil

nil

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
local shareholders

1,101,254
3,002,682

8.05
21.95

13,680,000

100.00

Total
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
mr. fernando Garcia restrepo
mr. kumar nitesh
mr. rashidul Hasan
mr. k m rezaul Hasanat
mr. shaibal sinha
mr. chitpan kanhasiri
mr. rajeev Gopalakrishnan

18

No. of Attendance
02 meetings (resigned on 1 april 2014)
02 meetings (resigned on 1 april 2014)
06 meetings
03 meetings
05 meetings
04 meetings (appointed on 1april 2014)
01 meeting
(appointed on 1 april 2014)

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
section 2CC of the Securities and Exchange Ordinance, 1969:

Condition
No.

sec checklist: (report under condition no.7)

Condition
No.

Title

Compliance Status
(Put in the
appropriate column)
Complied

1.0

Board of Directors

1.1

Boards Size
the number of Board directors should not be less than 5 (five)
and more than 20 (twenty)

1.2

at least one fifth (1/5) of the total number of directors in


the companys board shall be independent directors.

(ii) a)

who either does not hold any share or holds less than
1% shares to the total paid-up shares of the company;

(ii) c)

(ii) d)

who is not a member, director or officer of any stock


exchange?

(ii) e)

who is not a shareholder, director or officer of any


member of stock exchange or an intermediary of the
capital market.

who is not a partner or an executive or was not a


partner or an executive during the preceding 3 (three)
years of the concerned companys statutory audit firm.

who shall not be an independent director in more than


3 (three) listed companies.

(ii) h)

who has not been convicted by a court of competent


jurisdiction as a defaulter in payment of any loan to a
bank or a non-Bank financial institution (nBfi).

(ii) i)

who has not been convicted for a criminal offence


involving moral turpitude.

(iii)

the independent director(s) shall be appointed by the


board of directors and approved by the shareholders in
the annual General meeting (aGm).

(ii) g)

Not
Complied

(iv)

the post of independent director(s) can not remain


vacant for more than 90 (ninety) days.

not
applicable

(v)

the Board shall lay down a code of conduct of all Board


members and annual compliance of the code to be
recorded.

(vi)

the tenure of office of an independent director shall be


for a period of 3 (three) years, which may be extended
for 1 (one) term only.

(i)

independent director shall be a knowledgeable


individual with integrity who is able to ensure
compliance with financial, regulatory and corporate laws
and can make meaningful contribution to business.

(ii)

the person should be a Business leader / corporate


leader / Bureaucrat / university teacher with
economics or Business studies or law background /
professionals like chartered accountants, cost &
management accountants, and chartered secretaries.
the independent director must have at least 12 (twelve)
years of corporate management / professional
experience.

(iii)
1.4

in special cases the above qualifications may be


relaxed subject to prior approval of the commission.

Not
Complied
no such
vacancy
created 2014

not
applicable

Chairman of the Board and Chief Executive Officer


the positions of the chairman of the Board and the chief
executive officer of the companies shall be filled by different
individuals with defined different roles and responsibilities. the
chairman of the company shall be elected from among the
directors of the company.

1.5

Remarks
(if any)

Qualification of Independent Director (ID)

who does not have any other relationship whether


pecuniary or otherwise, with the company or its
subsidiary/ associated companies or its subsidiary
/associated companies.

(ii) f)

20

who is not a sponsor of the company and is not


connected with the companies any sponsor or director
or shareholder who holds one percent (1%) or more
share of the total paid-up shares of the company on the
basis of family relationship.

Remarks
(if any)

1.3

(i)

(ii) b)

Complied

Independent Directors

Title

Compliance Status
(Put in the
appropriate column)

The Directors Report to Shareholders


(i)

industry outlook and possible future development in the


industry.

(ii)

segment-wise or product-wise performance.

(iii)

risks and concerns.

(iv)

a discussion on cost of Goods sold, Gross profit margin


and net profit margin.

(v)

discussion on continuity of any extra-ordinary gain or


loss.

not
applicable

no such
gain/loss
occurred

(vi)

Basis for related party transactions- a statement of all


related party transactions should be disclosed in the
annual report.

presented in
the financial
statement

21

2014

Condition
No.

Title

Compliance Status
(Put in the
appropriate column)
Complied

(vii)

utilization of proceeds from public issues, rights issues


and / or through any others instruments.

(viii)

an explanation if the financial result deteriorate after the


company goes for initial public offering (ipo), repeat
public offering (rpo), rights offer, direct listing, etc.

not
applicable

if significant variance occurs between quarterly


financial performance and annual financial statements
the management shall explain about the variance on
their annual report.

not
applicable

remuneration to directors including independent


directors.

the financial statements prepared by the management of


the issuer company present fairly its state of affairs, the
result of its operations, cash flows and changes in equity.

(xii)

proper books of account of the issuer company have


been maintained.

(xiii)

appropriate accounting policies have been consistently


applied in preparation of the financial statements and
that the accounting estimates are based on reasonable
and prudent judgment.

(ix)

(x)
(xi)

(xiv)

(xv)
(xvi)

(xvii)

the system of internal control is sound in design and


has been effectively implemented and monitored.

there are no significant doubts upon the issuer


company's ability to continue as a going concern. if the
issuer company is not considered to be a going
concern, the fact along with reasons thereof should be
disclosed.
significant deviations from the last years operating
results of the issuer company shall be highlighted and
the reasons thereof should be explained.

Not
Complied

Condition
No.

during 2014
there were no
public or right
issue of share

no such
variance
occurred

2.1

ability of the
company to
continue as
going concern

(xix)

if the issuer company has not declared dividend (cash


or stock) for the year, the reasons thereof shall be given.

not
applicable

(xxi) a)

parent/subsidiary/associated companies and other


related parties (name wise details).

(xxi) b)

directors, chief executive officer, company secretary,


chief financial officer, Head of internal audit and their
spouses and minor children (name wise details).

(xxi) c)

executives (top five salaried employees of the company,


other than the directors, chief executive officer,
company secretary, chief financial officer and Head of
internal audit).

(xxi) d)

shareholders holding ten percent (10%) or more voting


interest in the company (name wise details).

(xxii)

In case of appointment/re-appointment of a Director the Company shall disclose the following


information to the Shareholders:

(xxii) a)

a brief resume of the director.

(xxii) b)

nature of his/her expertise in specific functional areas.

(xxii) c)

names of companies in which the person also holds the


directorship and the membership of committees of the
board.

the number of Board meetings held during the year and


attendance by each director shall be disclosed.

Chief Financial Officer (CFO), Head of Internal Audit and Company Secretary (CS)

2.2

the cfo and the company secretary of the companies shall


attend the meetings of the Board of directors.

3.0

Audit Committee

3.1

Not
Complied

The pattern of shareholdings and name wise details disclosing the aggregate number
of shares:

(i)

the company shall have an audit committee as a subcommittee of the Board of directors.

(ii)

the audit committee shall assist the Board of directors


in ensuring that the financial statements reflect true and
fair view of the state of affairs of the company and in
ensuring a good monitoring system within the business.

(iii)

the audit committee shall be responsible to the Board


of directors. the duties of the audit committee shall be
clearly set forth in writing.

applicable

Remarks
(if any)

(xxi)

the company shall appoint a chief financial officer (cfo), a Head


of internal audit (internal control and compliance) and a company
secretary (cs). the Board of directors should clearly define
respective roles, responsibilities and duties of the cfo, the Head of
internal audit and the cs.

not

key operating and financial data of at least preceding 5


(five) years shall be summarized.

Title

Complied

2.0

international accounting standards (ias)/ Bangladesh


accounting standards (Bas)/ international financial
reporting standards (ifrs)/ Bangladesh financial
reporting standards (Bfrs), as applicable in
Bangladesh, have been followed in preparation of the
financial statements and any departure there-from has
been adequately disclosed.

(xviii)

(xx)

22

not
applicable

Remarks
(if any)

Compliance Status
(Put in the
appropriate column)

Constitution of the Audit Committee


(i)

the audit committee shall be composed of at least 3


(three) members.

23

2014

Condition
No.

Compliance Status
(Put in the
appropriate column)

Title

Complied
(ii)

(iii)

(iv)

3.2

all members of the audit committee should be


financially literate and at least 1 (one) member shall
have accounting or related financial management
experience.

when the term of service of the committee members


expires or there is any circumstance causing any
committee member to be unable to hold office until
expiration of the term of service, thus making the
number of the committee members to be lower than the
prescribed number of 3 (three) persons, the Board of
directors shall appoint the new committee member(s)
to fill up the vacancy(ies) immediately or not later than 1
(one) month from the date of vacancy(ies) in the
committee to ensure continuity of the performance of
work of the audit committee.

Not
Complied

Condition
No.

not
applicable

(vi)

the quorum of the audit committee meeting shall not


constitute without at least 1 (one) independent director.

3.4
there was no
such vacancy
created

chairman of the audit committee shall remain present in


the annual General meeting (aGm).

oversee the financial reporting process.

(ii)

monitor choice of accounting policies and principles.

(iii)

monitor internal control risk management process.

(iv)

oversee hiring and performance of external auditors

(v)

review along with the management, the annual


financial statements before submission to the board for
approval.

(vi)

review along with the management, the quarterly and


half yearly financial statements before submission to the
board for approval.

(vii)

review the adequacy of internal audit function.

(viii)

review statement of significant related


transactions submitted by the management.

party

(ix)

review management letters/ letter of internal control


weakness issued by statutory auditors.

Not
Complied

not
applicable

3.4.1 Reporting to the Board of Directors


(i)

the audit committee shall report on its activities to the


Board of directors.

(ii)

The Audit Committee shall immediately report to the Board of Directors on the following
findings, if any:-

(ii) a)

report on conflicts of interests.

not
applicable

(ii) b)

suspected or presumed fraud or irregularity or material


defect in the internal control system.

not
applicable

(ii) c)

suspected infringement of laws, including securities


related laws, rules and regulations.

not
applicable

(ii) d)

any other matter which shall be disclosed to the Board


of directors immediately.

not
applicable

3.4.2 Reporting to the Authorities:


if the audit committee has reported to the Board of directors about
anything which has material impact on the financial condition and
results of operation and has discussed with the Board of directors
and the management that any rectification is necessary and if the
audit committee finds that such rectification has been
unreasonably ignored, the audit committee shall report such
finding to the commission, upon reporting of such matters to the
Board of directors for three times or completion of a period of 6
(six) months from the date of first reporting to the Board of
directors, whichever is earlier

Role of Audit Committee


(i)

when money is raised through initial public offering


(ipo)/repeat public offering (rpo)/rights issue the
company shall disclose to the audit committee about
the uses/applications of funds by major category
(capital expenditure, sales and marketing expenses,
working capital, etc), on a quarterly basis, as a part of
their quarterly declaration of financial results. further,
on an annual basis, the company shall prepare a
statement of funds utilized for the purposes other than
those stated in the offer document/prospectus.

Remarks
(if any)

Reporting of the Audit Committee

Chairman of the Audit Committee


the Board of directors shall select 1 (one) member of
the audit committee to be chairman of the audit
committee, who shall be an independent director.

Title

Compliance Status
(Put in the
appropriate column)
Complied

(x)

the company secretary shall act as the secretary of the


committee.

(ii)

24

(v)

(i)

3.3

the Board of directors shall appoint members of the


audit committee who shall be directors of the company
and shall include at least 1 (one) independent director.

Remarks
(if any)

3.5

not
applicable

Reporting to the Shareholders and General Investors:


report on activities carried out by the audit committee, including
any report made to the Board of directors under condition 3.4.1 (ii)
above during the year, shall be signed by the chairman of the
audit committee and disclosed in the annual report of the issuer
company.

25

2014

Condition
No.

Compliance Status
(Put in the
appropriate column)

Title

Complied
4.0

External /Statutory Auditors should not engage in the following services

Title

Complied
6.0

the ceo and cfo shall certify to the Board that:-

(ii)

information
financial
implementation.

and

(i)

(iii)

Book-keeping or other services related to the


accounting records or financial statements.

(iv)

Broker-dealer services.

(v)

actuarial services.

(vi)

internal audit services.

any other service that the audit committee determines.

(ix)

systems

design

no partner or employees of the external audit firms shall


possess any share of the company they audit at least
during the tenure of their audit assignment of that
company.
audit/certification services on compliance of corporate
governance as required under clause (i) of condition no. 7

(i) a)

(i) b)

(ii)

7.0

(i)

Subsidiary Company
(ii)
provisions relating to the composition of the Board of
directors of the holding company shall be made
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
the Board of directors of the subsidiary company.

not
applicable

(iii)

the minutes of the Board meeting of the subsidiary


company shall be placed for review at the following
Board meeting of the holding company.

not
applicable

(iv)

the minutes of the respective Board meeting of the


holding company shall state that they have reviewed the
affairs of the subsidiary company also.

not
applicable

(v)

the audit committee of the holding company shall also


review the financial statements, in particular the
investments made by the subsidiary company.

not
applicable

Not
Complied

they have reviewed financial statements for the year and that to the best of their knowledge and belief:
these statements do not contain any materially untrue
statement or omit any material fact or contain
statements that might be misleading;
these statements together present a true and fair view
of the companys affairs and are in compliance with
existing accounting standards and applicable laws.
there are, to the best of knowledge and belief, no
transactions entered into by the company during the
year which are fraudulent, illegal or violation of the
companys code of conduct.

Reporting and Compliance of Corporate Governance

(i)

Remarks
(if any)

Duties of Chief Executive Officer (CEO) and Chief Financial Officer (CFO)

appraisal or valuation services or fairness opinions.

(viii)

26

Condition
No.

(i)

(vii)

5.0

Not
Complied

Remarks
(if any)

Compliance Status
(Put in the
appropriate column)

the company shall obtain a certificate from a practicing


professional accountant/ secretary (chartered accountant/
cost and management accountant/ chartered secretary)
regarding compliance of conditions of corporate
Governance Guidelines of the commission and shall send
the same to the shareholders along with the annual report
on a yearly basis.

the directors of the company shall state in the directors'


report whether the company has complied with these
conditions.

the certificate
is enclosed in
this annual
report 2014

not
applicable

27

2014

Arun & Anjan

Audit Committee Report


the Board of directors of Bata shoe company (Bangladesh) limited has constituted an audit committee to support
the Board in fulfilling its oversight responsibilities.

C H A R T E R E D A C C O U N TA N T S

Certificate on Compliance with Conditions of Corporate Governance Guidelines


to the Shareholders of Bata Shoe Company (Bangladesh) Limited
(issued under condition no. 7 (i) of corporate Governance Guidelines of Bsec vide notification no.
sec/cmrrcd/2006-158/134/admin/44 dated 07 august 2012)
we have examined the compliance with conditions of the corporate governance guidelines by Bata shoe company
(Bangladesh) limited (herein after referred to the company) for the year ended 31 december 2014. these
conditions of corporate governance were issued by the Bangladesh securities and exchange commission (Bsec)
vide its notification no. sec/cmrrcd/2006-158/134/admin/44 dated 07 august 2012 and sec/cmrrcd/2006158/147/admin/48 dated 21 July 2013.
those charged with governance and the management of the company is responsible for complying with the
conditions of corporate governance guidelines were issued by the Bangladesh securities and exchange
commission (Bsec). those charged with the governance of the company are also responsible for stating in the
director's report whether the company has complied with the conditions of corporate governance guidelines.
our responsibility is to provide a certificate about whether the company is in compliance with the said conditions of
corporate governance based on our examination. our examination for the purpose of issuing this certificate was
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
statement on the basis of evidence gathered and representation received. it is neither an audit nor an expression
of opinion on the financial statement of the company.
to the best of our information and according to the explanations provided to us by the company, we certify that, the
company has complied for the year ended 31 december 2014 with the conditions of corporate governance
stipulated in the above mentioned guidelines issued by Bsec dated 07 august 2012.

dated, dHaka;
28 april, 2015

arun kumer kundu, aca


manaGinG partner
ARUN & ANJAN
CHARTERED ACCOUNTANTS

office: House # 18 (4th floor), road # 16 (old-27), dhanmondi, dhaka 1209.


tel: 9104704, cell: 01819 401724, e-mail: arunrrh@gmail.com

28

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.
Purpose of the Audit Committee
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.
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
in a proper and financially appropriate manner.
Major Responsibilities of the Audit Committee
in 2014, the audit committee reviewed its terms of reference in line with requirements of Bangladesh securities and
exchange commissions (Bsec) notification on corporate governance. the committee carried out its duties in
accordance with the terms of reference of the audit committee. some of the major responsibilities of the audit
committee are as follows:

review the annual, half-yearly and quarterly financial statements and other financial results, and upon
its satisfaction of the review, recommend the same to the Board.

review the adequacy and effectiveness of financial reporting process, internal control system, risk
management, auditing matters, and the companys processes for monitoring compliance with laws and
regulations and the codes of conduct.

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
non-audit services performed by statutory auditors.

exercise its oversight of the work of internal audit department of the company. review the effectiveness
of internal audit function including performance, structure, adequacy of resources, and compliance with
professional standards. examine audit findings and material weaknesses and monitor implementation of
audit action plans.
Major Activities of the Audit Committee

reviewed and recommended to the Board the quarterly and annual financial statements for the year
ended 31 december, 2014.

considered and made recommendation to the Board on the appointment and remuneration of external
auditors, rahman rahman Haq., chartered accountants for the year 2015.

reviewed the management letter from external auditors for the year 2014 together with managements
responses to the findings.

approved the internal audit plan for 2015, monitored progress and effected revisions when necessary.

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.

reviewed and received report on the matters as per requirement from the securities and exchange
commission (sec).
the above matters are significant recommendations for continuous improvement and therefore duly noted.

Rashidul Hasan
chairman, audit committee

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


statement of profit or loss and other comprehensive income

Bata Shoe Company (Bangladesh) Limited


statement of financial position as at 31 December 2014
Notes
Assets
property, plant and equipment
capital work in progress
prepayments of rent
Total non-current assets

2014
Taka

for the year ended 31 December 2014


2013
Taka

4
5
9.1

998,104,774
59,367,881
136,911,904
1,194,384,559

932,544,605
113,965,000
1,046,509,605

7
8
9
10

2,159,099,409
455,472,117
798,868,138
292,396,800

2,167,843,253
435,657,233
702,987,654
257,439,710

Total current assets

3,705,836,464

3,563,927,850

Total assets

4,900,221,023

4,610,437,455

inventories
accounts receivable
advances, deposits and prepayments
cash and cash equivalents

Total equity attributable to equity holders of the company


share capital
11
reserves and surplus
12

136,800,000
2,434,223,893

136,800,000
2,119,884,143

Total equity

2,571,023,893

2,256,684,143

Notes

Revenue
cost of sales

13
6

162,343,000
750,000

134,506,744
14,500,000

163,093,000

149,006,744

526,075,948
346,800,443
262,185,527
382,765,944
579,559,130
68,717,138

460,953,222
443,624,893
273,340,269
375,921,784
586,559,130
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

Total non-current liabilities

2014
Taka

2013
Taka

19
20

8,076,995,037
(4,945,486,549)

7,878,975,170
(4,857,762,141)

Gross profit
exchange gain/(loss)
other income
administration, selling and distribution expenses

21
22

3,131,508,488
6,886,918
20,221,586
(2,096,017,729)

3,021,213,029
4,351,351
18,424,860
(1,837,320,706)

Profit from operating activities


finance income
finance expenses

23
24

1,062,599,263
13,846,600
(4,951,020)

1,206,668,534
13,361,966
(6,047,801)

Net finance income


contribution to workers' profit participation fund

25

8,895,580
(53,574,742)

7,314,165
(60,699,135)

29

1,017,920,101

1,153,283,564

18
6

331,000,000
(13,750,000)

338,000,000
2,200,000

317,250,000

340,200,000

700,670,101

813,083,564

51.22

59.44

Profit before income tax


income tax expense:
current tax
deferred tax

Profit for the year

Liabilities
deferred liability
deferred tax liability

2014

Basic earnings per share (par value TK 10)

32

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


creditors for goods
creditors for expenses
creditors for other finance
accrued expenses
provision for tax
unclaimed dividend

14
15
16
17
18

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

Chitpan Kanhasiri
managing director

Rashidul Hasan
director

Md. Hashim Reza


company secretary
& finance manager

Chitpan Kanhasiri
managing director

32

Hussain Farhad & Co.


Chartered Accountants

director

Md. Hashim Reza


company secretary
& finance manager
as per our report of same date.

as per our report of same date.

dhaka, 27 april 2015

Rashidul Hasan

dhaka, 27 april 2015

Hussain Farhad & Co.


Chartered Accountants

33

2014

2,571,023,893

(239,400,000)

(143,640,000)

(3,290,351)

700,670,101

2,256,684,143

(266,760,000)

(143,640,000)

813,083,564

1,854,000,579

Taka

Total
equity

Bata Shoe Company (Bangladesh) Limited


statement of cash flows for the year ended 31 December 2014
2014
Taka
Cash flows from operating activities

2,323,731,090
48,863,000

(143,640,000)

(239,400,000)
-

(3,290,351)

700,670,101

2,009,391,340
48,863,000

(143,640,000)

(266,760,000)
-

813,083,564
-

1,606,707,776
48,863,000

Taka
Taka

7,703,564,659
(1,250,878,202)

(10,350,777)

(23,906,443)

(5,718,535,019)

(5,568,042,699)

1,007,931,751

860,737,315

6,117,072

5,192,660

(4,951,020)

(6,047,801)

(371,925,383)

(296,401,727)

637,172,420

563,480,447

7,123,001

8,169,306

897,655

2,945,866

(179,084,891)

(150,580,289)

(59,367,881)

(230,432,116)

(139,465,117)

dividend paid

(378,670,132)

(404,386,141)

Net cash used in financing activities

(378,670,132)

(404,386,141)

28,070,172

19,629,189

257,439,710

233,459,170

6,886,918

4,351,351

292,396,800

257,439,710

cash payments for deferred liabilities


cash payments to suppliers and contractors for goods and services
Cash generated from operating activities
interest received from std account
interest paid
income tax paid
Net cash from operating activities

998,620

998,620

998,620

Cash flows from investing activities


Taka

Retained
earnings
General
reserve
Nondistributable
special
reserve

8,035,999,651
(1,299,182,104)

cash payments to and on behalf of employees

interest received from fdr


proceed from sales of property, plant and equipment
acquisition of property, plant and equipment

60,631,183
136,800,000

60,631,183
136,800,000

60,631,183
136,800,000

Taka
Taka

Share
capital

Reserve on
revaluation
of land

payment for capital work in progress


Net cash used in investing activities
Cash flows from financing activities

Net cash increase/(decrease) in cash and cash equivalents

Balance as at 31 December 2014

interim dividend for the year 2014

final dividend for the year 2013

earlier year tax adjustment

Transactions with the shareholders

profit for the year

Total comprehensive income for 2014

Balance as at 31 December 2013

interim dividend for the year 2013

final dividend for the year 2012

Transactions with the shareholders

Total comprehensive income for 2013


profit for the year

Balance as at 1 January 2013

Cash and cash equivalents as at 1 January

Particulars

Bata Shoe Company (Bangladesh) Limited


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

cash receipts from customers

34

2013
Taka

effect of exchange rate fluctuations on cash held


Cash and cash equivalents as at 31 December (Note 10)

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


accounts receivables represent the amounts due from institutional customers, export customers etc. accounts
receivables are stated net off bad debts provision.

the accounting policies set out below have been applied consistently to all periods presented in these financial
statements, and have been applied consistently, except as explained in note 3.3.3 which addresses review of
useful lives of property, plant and equipment by management during the year 2011.
3.1

provision for doubtful debts is made based on the company policy. Bad debts are written off on consideration of
the status of individual debtors.

Foreign currency
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
on the reporting date are retranslated to the functional currency at the exchange rate at that date.
non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are
retranslated to the functional currency at the exchange rate on the date that the fair value was determined. nonmonetary items in a foreign currency that are measured based on historical cost are translated using the exchange
rate on the date of the transaction.

3.2.1.3.2 Cash and cash equivalents


cash and cash equivalents comprise cash on hand, cash in transit and cash at bank including fixed deposits
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
included as a component of cash and cash equivalents.
3.2.1.4

a financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or
equity instrument of another entity.

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
recognised initially at fair value plus any directly attributable transaction costs. subsequent to initial recognition,
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
in the fair value reserve in equity. when an investment is derecognised, the gain or loss accumulated in equity is
reclassified to profit or loss.

Non-derivative financial assets

available for sale financial assets comprise security deposits.

foreign currency differences arising on translation are recognised in profit or loss.


3.2

3.2.1

Financial instruments

the company initially recognises loans and receivables and deposits on the date that they are originated. all other
financial assets are recognised initially on the trade date, which is the date the company becomes a party 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,
or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which
substantially all the risks and rewards of ownership of the financial asset are transferred.

3.2.2

the company classifies non-derivative financial assets into the following categories: financial assets at fair value
through profit or loss, held-to-maturity financial assets, loans and receivables and available for- sale financial
assets.

the company derecognises a financial liability when its contractual obligations are discharged, cancelled or
expired. financial liabilities comprise trade and other creditors only.
3.2.2.1

3.3

Property, plant and equipment

3.3.1

Recognition and measurement


items of property, plant and equipment excluding land are measured at cost less accumulated depreciation and
accumulated impairment losses. land is measured at amount revalued in 1979.

Financial assets at fair value through profit or loss

cost includes expenditures that are directly attributable to the acquisition of assets. the cost of self-constructed
assets includes the following:
- the cost of materials and direct labour;
- any other cost directly attributable to bringing the asset to a working condition for the intended use;

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
dismantling and removing the items and restoring the site on which they are located; and

if the company has the positive intent and ability to hold debt securities to maturity, then such financial assets are
classified as held to maturity. Held-to-maturity financial assets are recognised initially at fair value plus any directly
attributable transaction costs. subsequent to initial recognition, held-to-maturity financial assets are measured at
amortised cost using the effective interest method, less any impairment losses.
3.2.1.3

38

- capitalised borrowing costs.


when parts of an item of property, plant and equipment have different useful lives, they are accounted for as
separate items (major components) of property, plant and equipment.

Loans and receivables


loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active
market. such assets are recognised initially at fair value plus any directly attributable transaction costs.
subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective
interest method, less any impairment losses.

Trade and other creditors


the company recognises a financial liability initially at fair value less any directly attributable transaction costs.
subsequent to initial recognition, these financial liabilities are measured at amortised cost using the effective
interest method.

a financial asset is classified as at fair value through profit or loss if it is classified as held for trading or is
designated as such on initial recognition. attributable transaction costs are recognised in profit or loss as incurred.
financial assets at fair value through profit or loss are measured at fair value and changes therein, which takes
into account any dividend income, are recognised in profit or loss.
3.2.1.2

Non-derivative financial liabilities


the company recognises all financial liabilities on the trade date which is the date the company becomes a party
to the contractual provisions of the instrument.

financial assets and liabilities are offset and the net amount presented in the statement of financial position when,
and only when, the company has a legal right to offset the amounts and intends either to settle on a net basis or
to realise the asset and settle the liability simultaneously.

3.2.1.1

Available-for-sale financial assets

any gain or loss on disposal of an item of property, plant and equipment (calculated as the difference between the
net proceeds from disposal and the carrying amount of the item) is recognised in profit or loss.
3.3.2

Subsequent costs
subsequent expenditure is capitalised only when it is probable that the future economic benefits associated with
the expenditure will flow to the company. ongoing repairs and maintenance is expensed as incurred.

39

2014

3.3.3

Depreciation

3.6

Share capital
paid up capital represents total amount contributed by the shareholders and bonus shares issued by the company
to the ordinary shareholders. Holders of ordinary shares are entitled to receive dividends as declared from time to
time and are entitled to vote at shareholders' meetings. in the event of a winding up of the company, ordinary
shareholders rank after all other shareholders and creditors and are fully entitled to any residual proceeds of
liquidation.

3.7

Employee benefits
the company maintains both defined contribution plan and defined benefit plan for its eligible permanent employees.
the eligibility is determined according to the terms and conditions set forth in the respective deeds.

items of property, plant and equipment are depreciated on a straight-line basis in profit or loss over the estimated
useful lives of each component. land is not depreciated.
addition during the year of property, plant and equipment are depreciated for full year irrespective of date of
acquisition, while no depreciation is charged in the year of disposal.
the estimated useful lives for the current and comparative years of property, plant and equipment are as follows:

Building
plant and machinery
motor vehicles
furniture, fixtures and equipment

Year
2014

Year
2013

40

40

13.33

13.33

4-13.33

4-13.33

depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if
appropriate. the useful lives and depreciation method of certain type of property, plant and equipment were
revised in 2011.
3.3.4

Capital work in progress


property, plant and equipment that is being under construction/acquisition is accounted for as capital work in
progress until construction/acquisition is completed and measured at cost.

3.4

Inventories

3.7.1 Defined contribution plan


a defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a
separate entity and has no legal or constructive obligation to pay further amounts. obligations for contributions to
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.
the company maintains three contributory provident funds for its permanent employees categorised as managers,
officers and supervisors and workers. the company also maintains a managerial staff pension fund which was a
defined benefit as contribution plan. these are administered by the Boards of trustees.
3.7.2 Defined benefit plan
a defined benefit plan is a post-employment benefit plan other than a defined contribution plan. the companys net
obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future
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
inventories is based on the first-in first-out principle, and includes expenditure incurred in acquiring the inventories,
production or conversion costs and other costs incurred in bringing them to their existing location and condition.
in the case of manufactured inventories and work in progress, cost includes an appropriate share of production
overheads based on normal operating capacity.

the company maintains an unfunded gratuity scheme, provision in respect of which is made annually for the
employees other than managerial staff. Gratuity payable at the end of each year has been determined on the basis
of existing rules and regulations of the company. actuarial valuation of the gratuity fund is carried out by a
professional actuary.
Short-term employee benefits
short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related
service is provided. a liability is recognised for the amount expected to be paid under short-term cash bonus or profitsharing 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.

net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of
completion and selling expenses.
3.5
3.5.1

3.5.1.1

Impairment
Non-derivative financial assets
a financial asset not classified at fair value through profit or loss is assessed at each reporting date to determine
whether there is objective evidence that it is impaired. a financial asset is impaired if objective evidence of
impairment as a result of one or more events that occurred after the initial recognition of the asset, and that loss
events had an impact on the estimated future cash flows of that asset that can be estimated reliably.

3.8

Provisions
a provision is recognised if, as a result of past event, the company has a present legal or constructive obligation that
can reliably be estimated, and it is probable that an outflow of economic benefits will be required to settle the
obligation.

Financial assets measured at amortised cost

3.9

Revenue
revenue from the sale of goods in the course of ordinary activities is measured at fair value of the consideration
received or receivable, net of returns and allowances, value added tax and trade discounts.
revenue is recognised when persuasive evidence exists that the significant risks and rewards of ownership have
been transferred to the customer, recovery of the consideration is probable, the associated costs and possible return
of goods can be estimated reliably, there is no continuing management involvement with the goods, and the amount
of revenue can be measured reliably.

3.10

Lease payments
payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the
lease. lease incentives received are recognised as an integral part of the total lease expenses, over the term of the
lease.
at inception of an arrangement, the company determines whether such an arrangement is or contains a lease. this
will be the case if the following two criteria are met:
- the fulfillment of the arrangement is dependent on the use of a specific asset or assets; and
- the arrangement contains a right to use the asset(s).

the company considers evidence of impairment for financial assets measured at amortised cost at both a specific
asset and collective level. an impairment loss in respect of a financial asset measured at amortised cost is
calculated as the difference between its carrying amount and the present value of the estimated future cash flows
discounted at the assets original effective interest rate.
3.5.1.2

Available-for-sale financial assets


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
loss is the difference between the acquisition cost, net of any principle repayment and amortisation, and the
current fair value, less any impairment loss recognised previously in profit or loss.

3.5.2

Non-financial assets
the carrying amounts of the company's non-financial assets, other than inventories and deferred tax assets, are
reviewed at each reporting date to determine whether there is any indication of impairment. if any such indication
exists then the recoverable amount of the asset is estimated. an impairment loss is recognised if the carrying
amount of an asset or its related cash-generating unit (cGu) exceeds its estimated recoverable amount.

40

41

2014

3.11

Finance income and expenses


finance income comprises interest income on funds invested, interest on shop managers account held with the
company and foreign exchange gain on translation of foreign currency that are recognised in profit or loss. interest
income is recognised on accrual basis.
finance expense comprises interest expense on overdraft, finance lease and interest on shop managers account
held with the company and foreign exchange loss on translation of foreign currency. all finance expenses are
recognised in the statement of comprehensive income.
3.12 Tax
income tax expense comprises current and deferred tax. income tax expense is recognised in the statement of
comprehensive income except to the extent that it relates to items recognised directly in equity, in which case it is
recognised in equity.
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
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
for declaring dividend at more than 30% of paid up capital.
3.12.2 Deferred tax
deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for taxation purposes. deferred tax is measured at the tax
rates that are expected to be applied to the temporary differences when they are reversed, based on the laws that
have been enacted or substantively enacted by the reporting date. deferred tax assets and liabilities are offset if
there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied
by the same tax authority on the same taxable entity.
a deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the
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
tax benefit will be realised.
3.13 Earnings per share
the company presents basic and diluted (when dilution is applicable) earnings per share (eps) for its ordinary
shares. Basic eps is calculated by dividing the profit or loss attributable to ordinary shareholders of the company
with the weighted average number of ordinary shares outstanding during the period, adjusted for the effect of change
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
statements as there was no dilutive potential ordinary shares during the relevant periods.
3.14 Segment reporting
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
companys other components. all operating segments operating results are reviewed regularly by the companys
management to make decisions about resources to be allocated to the segment and to assess its performance, and
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
those that can be allocated on a reasonable basis.
3.15 Duty drawback
duty drawback claimed on export sales is adjusted against cost of imported raw materials.
3.16 Sales proceeds from wastage, scrap etc.
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.
3.17

3.18

42

Workers' profit participation fund (WPPF)


the company provides 5% of its profit before charging such expense as wppf in accordance with "the Bangladesh
labour act 2006".
Events after the reporting period
events after the reporting period which provide additional information about the company's position at the date of
statement of financial position or those that indicate the going concern assumption is not appropriate are reflected in
the financial statements. events after the reporting period that are not adjusting events are disclosed in the notes
when material.

4.

Property, plant and equipment


4(a) Year 2014
cost/valuation

depreciation

disposals/
transfers
during
the year

as at
31 december
2014

as at
1 January
2014

charged
for
the year

adjustment
for
disposals/
transfers

as at
31 december
2014

taka

taka

taka

taka

taka

written down
value as at
31 december
2014

particulars

as at
1 January
2014

additions
during
the year

taka

taka

land 1

86,057,856

86,057,856

86,057,856

Building 2

377,877,942

6,201,709

384,079,651

181,131,213

7,915,712

189,046,925

195,032,726

plant and machinery

738,770,886

16,119,562

754,890,448

442,684,864

33,102,947

475,787,811

279,102,637

25,008,751

(4,257,655)

20,751,096

21,376,683

1,408,389

(4,257,655)

18,527,417

2,223,679

motor vehicles
furniture, fixtures
and equipment

taka

taka

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

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

4(b) Year 2013


cost/valuation

depreciation

disposals/
transfers
during
the year

as at
31 december
2013

as at
1 January
2013

charged
for
the year

adjustment
for
disposals/
transfers

as at
31 december
2013

taka

taka

taka

taka

taka

written down
value as at
31 december
2013

particulars

as at
1 January
2013

additions
during
the year

taka

taka

land 1

86,057,856

86,057,856

86,057,856

376,199,684

1,678,258

377,877,942

173,370,544

7,760,669

181,131,213

196,746,729

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

25,008,751

19,648,227

1,728,456

21,376,683

3,632,068

Building 2

motor vehicles
furniture, fixtures
and equipment

25,008,751

taka

taka

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

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

1 land of tongi factory was revalued by tk. 60,631,183 in 1979.


2 Building includes properties at 24 Bangabandhu avenue, dhaka which were purchased in 1985 from the Government of Bangladesh at a cost of tk.
5,344,417. sale deed is yet to be executed.

4.1

Depreciation charged to:


2014
Taka

2013
Taka

cost of goods manufactured (note 20.1)

32,565,175

32,168,316

administration, selling and distribution expenses (note 22)

80,650,101

67,523,686

113,215,276

99,692,002

4.2

Disposal of property, plant and equipment

particulars

original
cost

accumulated
depreciation

Book
value

sales
value

taka

taka

taka

taka

mode of
disposal

purchaser

machinery

4,257,655

4,257,655

486,238

auction

various parties

computer

414,086

282,781

131,305

282,624

negotiations

insurance claim / various parties

1,893,385

1,715,244

178,141

128,793

auction

various parties

6,565,126

6,255,680

309,446

897,655

furniture and
equipment in shops

43

2014

4.3

C&F value of imported capital assets


the import of capital assets by the company at c&f value was as follows:

capital assets

plant and machinery and


furniture and fixtures in shops

foreign currency
2014
2013
usd
GBp
eur

1,014,479
1,014,479

139,165
44,447
123,000
306,612

local currency
2014
2013
(taka)
(taka)
78,746,051
10,968,163
5,502,514
13,265,796
78,746,051
29,736,473

2014
Taka
5.

2013
Taka
-

2,059,472

59,367,881

36,749,879

59,367,881

38,809,351

38,809,351

59,367,881

less: transfer to property plant & equipment during the year


Balance as at 31 december (note 5.1)

plant and machinery

7.

56,203,366

3,164,515

59,367,881

8.

Deferred tax assets / ( liabilities)


deferred tax assets/(liability) is arrived at as follows:
Balance as at 1 January
addition/reduction during the year
Balance as at 31 december

(14,500,000)

(12,300,000)

13,750,000

(2,200,000)

(750,000)

(14,500,000)

carrying amount
on the date of
statement of
financial position

tax base

taxable/
(deductible)
temporary
difference

Taka

Taka

Taka

Inventories
raw materials
work in process
finished goods

Taka

Taka

845,586,872

629,033,786

216,553,086

(134,506,744)
(24,106,081)

(134,506,744)
(24,106,081)
57,940,261
(14,500,000)

2013
Taka

349,157,694
63,491,401
1,746,450,314
2,159,099,409

414,102,307
43,306,956
1,710,433,990
2,167,843,253

1,458,871
8,053,327
446,760,746

14,961,782
5,928,296
375,027,081

18,943,582

38,303,981

475,216,526

434,221,140

606,527
586,664
36,094
-

249,379
589,838

596,876

1,229,285

1,436,093

476,445,811

435,657,233

(20,973,694)

455,472,117

435,657,233

provision made during the year

20,973,694

Balance as at 31 december

20,973,694

Accounts receivable
trade (unsecured) - considered good
export customers - non Bso companies
export customers - Bso companies
receivables from dealers
receivables from institutional sale
others (unsecured) - considered good
interest receivable
vat claims
import claim receivable
Joint venture commission receivable
duty drawback claim receivable

As at 31 December 2014
total accounts receivable
property, plant and equipment
(excluding land and certain motor vehicles)

provision for staff gratuity (note 13)


provision for bad and doubtful debts (note 8.1)
reserve against personal accounts
net taxable temporary difference
deferred tax liability

44

Taka

2014
Taka

Capital work in progress represent as follows

furniture for different stores

(a)

tax base

taxable/
(deductible)
temporary
difference

deferred tax liability

add: addition during the year

6.

As at 31 December 2013
property, plant and equipment
(excluding land and certain motor vehicles)
provision for staff gratuity (net of payment)
reserve against personal accounts
net taxable temporary difference

Capital work in progress


Balance as at 1 January

5.1

(b)

carrying amount
on the date of
statement of
financial position

provision for doubtful debts (note: 8.1)


911,481,709

697,795,195

213,686,514

(162,343,000)
(20,973,694)
(27,467,293)

(162,343,000)
(20,973,694)
(27,467,293)
2,902,527
(750,000)

8.1

Provision for doubtful debts


Balance as at 1 January

45

2014

10.

accounts receivable are aged as below:


2014
Below
six months
Taka

14,961,782

export customers - Bso companies

8,053,327

5,928,296

426,052,762

20,707,984

375,027,081

18,677,872

265,710

38,303,981

interest receivable

606,527

vat claims

586,664

249,379

36,094

589,838

596,876

455,472,117

20,973,694

435,657,233

duty draw back claim receivable

(c)

Debts due by directors, officers and other related parties


as at 31 december 2014, accounts receivables does not include any amount due by:
directors and other officers of the company;
firms or private limited companies respectively in which any director of the company is a partner, director or member,
other than those disclosed in note 34.1; and
companies under the same management.
2014
Taka

9.

2014
Taka

Over
six months
Taka

Joint venture commission receivable

(a)
(b)

Below
six months
Taka

1,458,871

receivables from institutional sale

8.2

Over
six months
Taka

export customers - non Bso companies


receivables from dealers

Cash and cash equivalents

2013
cash balances:
on hand

1,817

16,325

from stores

33,107,436

35,328,276

from depots

37,767,000

490,000

4,986,350

47,403,691

in taka

(192,689,653)

(109,532,576)

in usd

2,885,844

19,420,791

in transit:

from institutions
Balances with banks in:
current accounts

10.1

2013
Taka

fixed deposits

200,000,000

6,000,000

short term deposits

206,338,006

258,313,203

216,534,197

174,201,418

292,396,800

257,439,710

Book overdrafts
the current accounts include book overdrafts (i.e. cheque outstanding in excess of deposits) from eastern Bank
limited and HsBc as follows:
2014
2013
Taka
Taka
eastern Bank limited

Advances, deposits and prepayments

HsBc

advances (considered good) to:


agents and employees
suppliers against materials and services

15,378,295

2,729,173

6,695,559

8,931,150

22,073,854

11,660,323

advance income tax

179,048,804

148,413,771

security and other deposits

485,239,534

441,512,793

prepayments to landlords (current portion - note 9.1)

112,505,946

101,400,767

798,868,138

702,987,654

2013
Taka

10.2

200,021,799

122,976,414

1,131,093

3,569,506

201,152,892

126,545,920

Credit facilities available as at 31 December


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
forward contracts (fx forward). the funded facilities include overdraft facility, short term loan and import loan. the
aggregate amount of available short term working capital facilities is tk 1,000 million (2013: tk 1,000 million) of which
non funded limit is tk 700 million (2013: tk 700 million) and funded limit is tk 300 million (2013: tk 300 million).
details of the total facilities are stated below:

9.1

Prepayments of rent
prepayments to landlords

9.2

46

249,417,850

215,365,767

less: current portion (note 9)

112,505,946

101,400,767

non-current portion

136,911,904

113,965,000

Loans and advances to directors, officers and other related parties


other than those mentioned in the note above, there were no loans or advances to:
(a directors of the company;
(b) firms or private limited companies respectively in which any director of the company is a partner, director
or member; and
(c) companies under the same management.

(a)

HSBC Bank
i) l/c facility - tk 300 million (2013: tk 300 million).
ii) overdraft / short term loan facility - tk 100 million (2013: tk 100 million).

(b)

EBL Bank
i) l/c facility - tk 394 million (2013: tk 394 million).
ii) overdraft facility / short term loan facility - tk 200 million (2013: tk 200 million).
iii) letters of Guarantee - tk. 6 million (2013: tk 6 million)
2014
(Tk in million)

total credit facilities available


credit facilities availed

1,000
110

2013
(Tk in million)
1,000
248

47

2014

11.

12.

Share capital
2014
Taka

2014
Taka

2013
Taka

authorised:
20,000,000 ordinary shares of tk 10 each

Reserves and surplus

200,000,000

200,000,000

28,507,230

28,507,230

108,292,770

108,292,770

136,800,000

136,800,000

reserve on revaluation of land


non-distributable special reserve (note 12.1)
General reserve
unappropriated profit (note 12.2)

issued, subscribed and paid up:


2,850,723 ordinary shares of tk 10 each issued for cash

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
applicable only to the profit on sale of immovable assets such as land, buildings, etc.

12.2

Unappropriated profit
2014
Taka

the shares are listed both in the dhaka stock exchange limited and chittagong stock exchange limited and quoted
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.

Balance as at 1 January
profit for the year
earlier year tax adjustment
interim dividend
final dividend

percentage of shareholdings :
2014

Bafin (nederland) B.v


non-resident shareholders
local shareholders

2013

Taka

Taka

70.00

95,760,000

70.00

95,760,000

8.05

11,012,540

7.47

10,216,680

21.95

30,027,460

22.53

30,823,320

100.00

136,800,000

100.00

136,800,000

60,631,183
998,620
48,863,000
2,009,391,340
2,119,884,143

12.1

10,829,277 ordinary shares (including 7,202,400 bonus shares)


of tk 10 each issued for consideration other than cash

60,631,183
998,620
48,863,000
2,323,731,090
2,434,223,893

2013
Taka

13.

Deferred liability
Balance as at 1 January
add: provision made / (reversed) during the year
less: paid during the year
Balance as at 31 december

2013
Taka

2,009,391,340
700,670,101
(3,290,351)
(239,400,000)
(143,640,000)
2,323,731,090

1,606,707,776
813,083,564
(266,760,000)
(143,640,000)
2,009,391,340

134,506,744
38,142,033
172,648,777
10,305,777
162,343,000

123,817,664
34,595,523
158,413,187
23,906,443
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 shares

2014

2013

2014

2013

5,195

5,562

683,221

683,221

375

432

653,626

653,626

5,001 to 10,000 shares

24

38

277,540

277,540

10,001 to 20,000 shares

27

21

310,597

310,597

20,001 to 30,000 shares

11

122,768

122,768

30,001 to 40,000 shares

212,500

212,500

40,001 to 50,000 shares

143,100

143,100

50,001 to 100,000 shares

280,500

280,500

100,001 to 1,000,000 shares

1,420,148

1,420,148

over 1,000,000 shares

9,576,000

9,576,000

5,649

6,076

13,680,000

13,680,000

less than 501 shares


501 to 5,000 shares

48

Number of shareholders

14.

15.

16.

Creditors for goods


payable to local suppliers
payable to Bso companies

Creditors for expenses


payable to local suppliers
payable to Bso companies

Creditors for other finance


workers' profit participation fund (note 25)
personal accounts of employees and agents
security and other deposits
provident fund
tax deducted at source
pension fund
vat deducted at source
salary and wages payable
others

508,452,080
17,623,868
526,075,948

450,535,227
10,417,995
460,953,222

74,952,545
271,847,898
346,800,443

43,945,078
399,679,815
443,624,893

53,574,742
78,983,164
25,544,500
9,168,418
47,441,190
1,942,427
2,972,806
21,321,732
21,236,548
262,185,527

60,699,135
77,488,548
24,794,500
6,983,994
60,933,617
1,992,092
5,318,418
20,469,098
14,660,867
273,340,269

49

2014

17.

20.

Accrued expenses
2014
Taka
Bonus
utility
legal & audit fee
royalty
Joint venture commission
other accrued liabilities

18.

18.1

Provision for tax


current year
earlier years (net of advance tax)

77,190,000
9,320,000
1,681,500
16,222,717
9,953,699
261,553,868

382,765,944

375,921,784

331,000,000
248,559,130

338,000,000
248,559,130

579,559,130

586,559,130

Taka

700,670,101

813,083,564

total income tax expense

317,250,000

340,200,000

1,017,920,101

1,153,283,564

profit excluding income tax


factors affecting the tax charge for current period:
income tax using the companys domestic tax rate

27.50%

279,928,028

27.50%

317,152,980

8.74%

88,931,627

5.22%

60,233,055

tax exempt income

-0.20%

(2,000,995)

-0.18%

(2,033,809)

tax incentives

-3.60%

(36,685,866)

-3.25%

(37,447,238)

0.07%

699,046

0.01%

158,298

-1.34%

(13,621,840)

0.19%

2,136,714

31.17%

317,250,000

29.50%

340,200,000

non-deductible expenses

round off adjustment


under/(over) provided in prior year

Revenue

Unit

2014

2013

Quantity
in '000

Amount
'000 Taka

Quantity
in '000

Amount
'000 Taka

29,050

7,673,652

30,885

7,536,145

local

50

1,393,434,546
4,160,006,319
1,014,755,266
6,568,196,131
1,710,433,990

4,945,486,549

4,857,762,141

Closing

Opening

stock

stock

4,923

5,812

shoes

Cost of goods manufactured


2014
Taka

Taka

profit for the year

export

1,710,433,990
3,795,906,908
1,185,595,965
6,691,936,863
1,746,450,314

the opening and closing stocks of goods produced are shown below:

20.1

2013

Hosiery & accessories

stock of finished goods as at 1 January


add: cost of goods manufactured (note 20.1)
finished goods purchased
cost of finished goods available for sale
less: stock of finished goods as at 31 december

2013
Taka

Figures in '000 pairs

Reconciliation of effective tax

shoes

2014
Taka

2013
Taka

63,280,000
10,958,000
2,418,050
23,043,028
8,453,726
274,613,140

2014

19.

Cost of sales

2013
Taka

cost of materials consumed (note 20.1.1)

2,908,608,450

3,175,668,229

direct wages
prime cost

539,920,622
3,448,529,072

608,160,128
3,783,828,357

171,410,278
52,694,243
64,774,558
7,612,131
24,048,092
7,020,354
1,927,520
2,355,905
3,154,025
32,565,175

166,539,121
53,987,687
61,780,700
6,628,127
1,295,831
19,461,945
7,272,112
2,248,952
2,200,109
3,912,495
32,168,316

367,562,281
3,816,091,353

357,495,395
4,141,323,752

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

(20,184,445)

18,682,567

3,795,906,908

4,160,006,319

manufacturing overhead:
remuneration to employees
Gas, water and electricity
repairs and maintenance (note 20.1.2)
insurance
uniform for workers
Health and other welfare expenses
travelling
postage
freight and transport
stationery
entertainment
depreciation (note 4.1)
cost of production
difference in work in process:

pair

313,467

255,830

89,876

87,000

8,076,995

7,878,975

cost of goods manufactured

51

21.

Other income
2014
Taka

Notes
Gain /(loss) on disposal of property, plant and equipment

29,917

7,033

22,884

2013

22.

remuneration to employees

26,802

7,060

19,742

11,447,544

travelling expenses

77,962,266

64,177,638

1,603,264

1,518,053

repairs and maintenance

70,465,915

67,779,048

stationery

17,982,488

18,859,686

postage, telegram and telephone

10,406,046

10,591,968

entertainment expenses

16,370,347

19,044,746

1,653,134

1,175,134

rent, rates and taxes

51,479,092

20,176,439
98,000

auditors' fees

546,250

517,500

6,925,960

5,534,136

5,881,058

4,405,721

22.2

insurance
land revenue

999,786

486,191

72,028,955

69,974,432

80,936,766

65,782,437

commission

22.3

240,690,360

259,626,584

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

9,882,726

7,333,587

it fees
electricity
depreciation

dhamrai

38,701,217
308,222,099

104,000

legal and other professional fees

36,441

9,954

26,487

22.1

34,003,739
385,356,807

directors' fees

packing expenses

tongi

18,424,860

432,844,696

advertisement

35,991

9,504

26,487

2013

20,221,586

13,780,529

General charges

2014

figures in '000

production capacity in pairs

2,216,579
16,208,281

527,535,810

freight and transport


Statement of production capacity and actual production

588,209
19,633,377

Health and other welfare expenses

subscription and donation

22.1

2013
Taka

Administration, selling and distribution expenses

Bank charges
2014

figures in '000

actual production in pairs

discount for early payment

20.2

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
cost of spare parts, moulds and accessories consumed.

20.1.2 Repairs and maintenance

duty drawback of tk. 1,353,308 claimed on export sales have been adjusted against cost of raw materials.

cost of materials consumed is 29% imported and 71% locally purchased (2013: 32% imported and 68% locally purchased).

3,175,668,229
391,028,070
3,147,328,613
419,367,686
2013

2,908,608,450

2,052,023,262
222,222,823

331,180,888
2,848,761,268

2,009,801,074
264,445,011

391,028,070
2014

local purchase

856,585,188
108,958,065
838,960,194
126,583,059
imported

value
(taka)
value
(taka)

closing stock
purchase

value
(taka)
value
(taka)

opening stock
20.1.1 Cost of materials consumed

52

description

consumption

2014

4.1

67,851,316

60,037,761

80,650,101

67,523,686

2,096,017,729

1,837,320,706

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

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

53

2014

22.3

29.

Commission
2014
Taka
retail
wholesale
export

22.4

23.

Amount
in local

currency

currency

Bafin (nederland) B.v.

dividend

usd

3,085,147

241,315,200

ssl international plc

royalty on dr. scholl Brand

GBp

Global footwear services


pte. ltd., singapore

management services fees

sGd

1,663,200

103,862,682

wolverine world
wide inc., usa

royalty on Hush puppies Brand

usd

127,912

10,098,681

7,123,001
6,117,072
606,527

8,169,306
5,192,660
-

13,846,600

13,361,966

375,145
4,575,875

1,261,274
4,786,527

euro footwear Holdings


s.a.r.l

it fees

eur
usd

60,000
1,318

6,525,000
102,773

4,951,020

6,047,801

Bata Brands s.a.r.l swiss Branch

trade mark licence fees

usd

3,850,524

301,945,237

1,062,599,263
8,895,580
1,071,494,843

1,206,668,534
7,314,165
1,213,982,699

53,574,742

60,699,135

13,063,088
4,185,600
994,239
3,960,000

14,013,348
6,857,534
1,141,200
3,300,000

22,202,927

25,312,082

Emoluments to managers
remuneration
retirement benefit schemes
Housing

99,558,844
13,909,833
12,539,349

85,642,410
13,792,865
10,168,444

126,008,026

109,603,719

the figures represent net off tax.


31.

Earnings in foreign currency

export of shoes and other footwear goods


32.

Earnings per share

32.1

Basic earnings per share (EPS)

provident fund:
managers
officers & supervisors
workers
pension fund

6,176,487
9,396,078
10,415,714
25,988,279

8,306,158
36,353,509

7,616,378
33,604,657

2013

Taka

Taka

89,875,763

87,000,227

earnings attributable to the ordinary shareholders (net profit after tax)

700,670,101

813,083,564

weighted average number of ordinary shares outstanding during the year

13,680,000

13,680,000

51.22

59.44

Basic earnings per share (eps)

6,597,914
10,421,968
11,027,469
28,047,351

2014

the computation of eps is given below:

Contribution to employees' provident fund and pension fund


during the year the company contributed the following amounts to the employees' provident fund and pension fund:

54

Currency

Emoluments to directors
remuneration
Bonus
retirement benefit schemes
Housing

28.

Nature of transaction

Amount
in foreign

Taka

Contribution to workers' profit participation fund

workers' profit participation fund @ 5%

27.

Remittance of foreign currency

Name of party

Finance expenses

profit from operating activities


net finance income/(expenses)
profit before contribution to workers' profit participation fund

26.

30.

Finance income

interest on:
overdraft
personal account

25.

157,079,228
101,594,988
952,368
259,626,584

Profit before tax


profit before tax tk.1,017,920,101 (2013: tk. 1,153,283,564) includes profit amounting to tk 34,150,225 (2013: tk.
96,321,757) of leather shoe factory at dhamrai and tk.983,769,876 (2013: tk. 1,056,961,807) at tongi.

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
equivalent foreign currency of usd 175,945, usd 56,767, usd 5,630, sGd 2,100,000 and usd 2,215,572 provided
during the year.

interest on:
fixed deposit
short term deposit
personal account
24.

149,478,335
90,954,453
257,572
240,690,360

2013
Taka

32.2

Diluted earning per share


no diluted earnings per share is required to be calculated for the year as there was no scope for dilution during
these years.

33.

Number of employees
the number of employees for the whole year or part thereof who received a total remuneration of tk 36,000 and
above was 1,816 (2013: 1,464).

55

2014

34.

b)

Financial risk management

Ageing of receivables
2014
Taka

the management has overall responsibility for the establishment and oversight of the company's risk management
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
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
company has exposure to the following risks from its use of financial instruments.

2013
Taka

the ageing of gross accounts receivables as at 31 december was:


accounts receivable were aged as below:
Export customers - Non BSO companies

34.1

credit risk
liquidity risk
market risk

invoiced 0-30 days

1,458,871

10,709,730

4,252,052

1,458,871

14,961,782

invoiced 0-30 days

2,009,362

2,694,588

invoiced 31-60 days

2,678,863

1,840,583

invoiced 61-90 days

3,365,102

1,393,125

8,053,327

5,928,296

invoiced 0-30 days

239,917,290

236,670,250

invoiced 31-60 days

165,819,770

171,420,677

invoiced 61-90 days

22,993,621

4,038,684

invoiced 91-365 days

20,688,011

1,201,451

invoiced over 365 days

16,285,636

465,704,328

413,331,062

invoiced 31-60 days

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
meet its contractual obligations, and arises principally from the company's receivables from dealers, institutional and
export customers etc.

Export customers - BSO companies

management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis.
in monitoring credit risk, debtors are Grouped according to their risk profile, i.e. their legal status, financial condition,
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.
a) Exposure to credit risk
the carrying amount of financial assets represents the maximum credit exposure. the maximum exposure to credit
risk at the reporting date was:
2014
Taka
trade receivable
export customers - non Bso companies
export customers - Bso companies
receivables from dealers
receivables from institutional sale

2013
Taka
c)

1,458,871
8,053,327
446,760,746
18,943,582
475,216,526

14,961,782
5,928,296
375,027,081
38,303,981
434,221,140

Impairment losses
impairment losses on the above receivables were recognised as per the company policy mentioned in note 3.2.1.1.
quantitative disclosure for such impairment losses are as below:
Receivables from dealers

others receivable
security and other deposits
cash and cash equivalents

1,229,285
485,239,534
292,396,800

1,436,093
441,512,792
257,439,710

1,254,082,145

1,134,609,735

accounts receivable

446,760,746

375,027,081

provision for doubtful debts (note 8.1)

(20,960,474)

425,800,272

375,027,081

18,943,582

38,303,982

(13,220)

18,930,362

38,303,982

the maximum exposure to credit risk for accounts receivable as at 31 december by geographic regions was:
Receivables from institutional sale
domestic
asia
australia
south america

56

465,704,328
8,053,327
1,458,871
475,216,526

413,331,062
15,660,570
4,644,602
584,906
434,221,140

accounts receivable
provision for doubtful debts (note 8.1)

57

34.2

58
68,717,138

382,765,944

63,280,000
10,958,000
2,418,050
23,043,028
8,453,726
274,613,140

197,499,940

78,983,164
25,544,500
47,441,190
2,972,806
21,321,732
21,236,548

346,800,443

74,952,545
271,847,898

526,075,948

508,452,080
17,623,868

taka

2015
2015
2015
2015
2015
2015

december 2015

June 2015
June 2015
June 2015
June 2015
June 2015
december 2015

June
June
June
June
June
June

June 2015
december 2015

June 2015
June 2015

maturity period

n/a

n/a
n/a
n/a
n/a
n/a
n/a

8.5%
n/a
n/a
n/a
n/a
n/a

n/a
n/a

n/a
n/a

nominal interest
rate

68,717,138

382,765,944

63,280,000
10,958,000
2,418,050
23,043,028
8,453,726
274,613,140

197,499,940

78,983,164
25,544,500
47,441,190
2,972,806
21,321,732
21,236,548

346,800,443

74,952,545
271,847,898

526,075,948

64,347,270

375,921,784

77,190,000
9,320,000
1,681,500
16,222,717
9,953,699
261,553,868

203,665,047

77,488,548
24,794,500
60,933,617
5,318,418
20,469,098
14,660,866

443,624,893

43,945,078
399,679,815

460,953,222

450,535,227
10,417,995

2014
2014
2014
2014
2014
2014

december 2014

June 2014
June 2014
June 2014
June 2014
June 2014
december 2014

June
June
June
June
June
June

June 2014
december 2014

June 2014
June 2014

maturity period

n/a

n/a
n/a
n/a
n/a
n/a
n/a

8.5%
n/a
n/a
n/a
n/a
n/a

n/a
n/a

n/a
n/a

nominal interest
rate

64,347,270

375,921,784

77,190,000
9,320,000
1,681,500
16,222,717
9,953,699
261,553,868

203,665,047

77,488,548
24,794,500
60,933,617
5,318,418
20,469,098
14,660,866

443,624,893

43,945,078
399,679,815

460,953,222

450,535,227
10,417,995

taka

contractual
cash flows

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

Unclaimed dividend

Accrued liabilities
Bonus
utility
legal & audit fee
royalty
Joint venture commission
other accrued liabilities

Creditors for other finance


personal accounts of employees and agents
security and other deposits
tax deducted at source
vat deducted at source
salary and wages payable
others liabilities

Creditors for expenses


payable to local suppliers
payable to Bso companies

Creditors for goods


payable to local suppliers
payable to Bso companies

Accounts payable

taka

carrying amount

As at 31 December 2013

39,000,000

232,314,174

77,190,000
9,320,000
1,681,500
9,953,699
134,168,975

133,579,006

7,402,507
24,794,500
60,933,617
5,318,418
20,469,098
14,660,866

275,828,273

43,945,078
231,883,195

460,953,222

450,535,227
10,417,995

taka

within 6 months
or less

42,000,000

157,768,483

63,280,000
10,958,000
2,418,050
4,629,571
8,453,726
68,029,136

120,055,451

1,538,675
25,544,500
47,441,190
2,972,806
21,321,732
21,236,548

319,178,093

74,952,545
244,225,548

526,075,948

508,452,080
17,623,868

taka

taka

508,452,080
17,623,868

within 6 months
or less

contractual
cash flows

As at 31 December 2014

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

Unclaimed dividend

Accrued liabilities
Bonus
utility
legal & audit fee
royalty
Joint venture commission
other accrued liabilities

Creditors for other finance


personal accounts of employees and agents
security and other deposits
tax deducted at source
vat deducted at source
salary and wages payable
others liabilities

Creditors for expenses


payable to local suppliers
payable to Bso companies

Creditors for goods


payable to local suppliers
payable to Bso companies

Accounts payable

carrying amount

the following are the contractual maturities of financial liabilities:

25,347,270

143,607,610

16,222,717
127,384,893

70,086,041

70,086,041
-

167,796,620

167,796,620

taka

within 6-12
months

26,717,138

224,997,461

18,413,457
206,584,004

77,444,489

77,444,489
-

27,622,350

27,622,350

taka

within 6-12
months

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.

2014

59

2014

34.3

Market risk
market risk is the risk that any change in market prices, such as foreign exchange rates and interest rates will affect the
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.
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
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.

b)

c)

2014

123,592

274,750

22,225
15,129
160,946

54,706
162,660
33,920
526,036

Foreign currency denominated liabilities


trade and other payables for expenses
total
net exposure

(2,443,418) (1,890,000) (86,667)


(2,443,418) (1,890,000) (86,667)
(2,282,472) (1,890,000) (86,667)

(4,330,133) (1,663,200)
(4,330,133) (1,663,200)
(3,804,097) (1,663,200)

2013
fair value
Taka

carrying amount
Taka

As at 31 December 2013
usd
sGd
eur

Foreign currency denominated assets


accounts receivable
cash at bank
islamic Bank Bangladesh limited
eastern Bank limited
HsBc
total

Accounting classification and fair values


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:
As at 31 December 2014
usd
sGd
eur

Interest rate risk


the interest bearing financial instrument for the company is the short term deposit (std) account maintained by the company
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.

(66,000)
(66,000)
(66,000)

payable to other entities represents payable for Global footwear service fees, it fees etc.

carrying amount
Taka

fair value
Taka

Receivables, cash & cash equivalent


trade receivable, net
other receivables
cash and cash equivalents

475,216,526
1,229,285
292,396,800

475,216,526
1,229,285
292,396,800

434,221,140
1,436,093
257,439,710

434,221,140
1,436,093
257,439,710

Available for sale financial assets


security deposits

485,239,534

485,239,534

441,512,793

441,512,793

Liabilities carried at amortised costs


creditors for goods
creditors for expenses
creditors for other finance
accrued expenses

526,075,948
346,800,443
262,185,527
382,765,944

526,075,948
346,800,443
262,185,527
382,765,944

460,953,222
443,624,893
273,340,267
375,921,784

460,953,222
443,624,893
273,340,267
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.
35.

the following significant exchange rates are applied during the year:
exchange rate as at
31 dec 2013
31 dec 2014
taka
taka
us dollar
singapore dollar
euro (eur)
ii)

77.26
58.46
93.91

77.29
61.22
106.46

Segment reporting
the company has two operating segments, domestic and unallocated, which are the company's strategic divisions. they
are managed separately because they require different technology and marketing strategies. for each of the strategic
divisions, the company's management reviews internal management reports at least on a monthly basis. of these two,
only domestic segment is reportable. the following summary describes the operations in the company's reportable
segments:
Domestic this segment is mainly engaged in manufacturing and marketing of leather, rubber, plastic and canvas
footwear, hosiery and accessories in domestic market.

Foreign exchange rate sensitivity analysis for foreign currency expenditures


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
exchange rate variances that the company considered to be reasonably possible at the reporting date. the analysis assumes
that all other variables, in particular interest rates, remain constant. the analysis is performed on the same basis for 2014, albeit
that the reasonably possible foreign exchange rate variances were different, as indicated below:
strengthening
profit or loss
taka
At 31 December 2014
usd (0.04 percent movement)
sGd (4.51 percent movement)
eur (11.79 percent movement)

(70,538)
(4,983,072)
(959,576)

weakening
profit or loss
taka
70,538
4,983,072
959,576

2014
particulars

Revenue

60

(8,820,560)
(6,109,266)
(70,264)

8,820,560
6,109,266
70,264

reportable business segment


domestic

unallocated

total

Taka 000

Taka 000

Taka 000

reportable business segment


domestic unallocated
Taka 000

7,987,119

89,876

8,076,995

7,791,975

cost of sales

(4,884,620)

(60,867)

(4,945,487)

(4,852,040)

Gross profit

Taka 000

87,000

total
Taka 000

7,878,975

(5,722) (4,857,762)

3,102,499

29,009

3,131,508

2,939,935

81,278

exchange gain/(loss)

6,887

6,887

4,351

4,351

other income

20,222

20,222

18,425

18,425

(1,546,326)

(549,692)

(2,096,018)

(1,321,424)

1,556,173

(493,574)

1,062,599

1,618,511

administrative, selling and distribution exp.


Reportable segment result

At 31 December 2013
usd (3 percent movement)
sGd (6 percent movement)
eur (1 percent movement)

2013

3,021,213

(515,896) (1,837,320)
(411,842)

1,206,669

Segment assets and liabilities


the necessary information regarding assets and liabilities of operating segments are not separable and individually identifiable
for this purpose. for this reason the assets and liabilities of the respective segments have not been presented here.

61

2014

36.

Related party disclosures

38.

during the year ended 31 december 2014, company entered into a number of transactions with related parties /
associated enterprises in the normal course of business. relationship with related parties / associated enterprises,
nature of these transactions and amount thereof have been set out below in accordance with the provisions of Bas
24: related party disclosures.
36.1

there were no capital expenditure and financial commitments as at 31 december 2014 (2013: nil)
39.

relationship with company

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).

2013
Taka 000
40.

nature of transaction

40.1

Holding company

dividend payment

(241,315)

(258,552)

associated companies

purchase of goods

(328,892)

(235,740)

(12,349)

(9,049)

54,504

38,518

4,095

1,022

(171,167)

(167,797)

(9,883)

(7,334)

sale of goods
services provided
trade mark licence fees
it fees
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
Taka 000
relationship with company

nature of transaction

associated companies

purchase of goods
services received
sale of goods
services provided
trade mark licence fees
it fees

37.

Other disclosures
Comparatives
previous year's figures have been rearranged, wherever necessary, to conform to current year's presentation.

40.2

services received

Contingent liabilities
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.

Related party transactions


2014
Taka 000

Capital expenditure and financial commitment

Interim dividend
Bata paid an interim dividend @ tk 17.50 per share of tk 10 each aggregating to tk 239,400,000 which was approved by
the Board of directors at its 220th meeting held on 24 november 2014.

40.3

Events after the reporting period


the Board of directors of Bata, at its 221st meeting held on 27 april 2015, proposed tk 10.50 per share, amounting to a
total of tk 143,640,000 as final dividend for the year ended 31 december 2014, which represents 105% of the paid up
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.

2013
Taka 000

(17,624)

(13,390)

(23)

8,053

1,351

36

1,337

(171,167)

(14,567)

(8,094)

(632)

Operating lease payments disclosure


non-cancellable operating lease rentals are payable as follows:
2014
Taka 000
less than one year
Between one and five years
more than five years

62

2013
Taka 000

466,001
3,006,778
1,158,562

359,200
1,833,752
578,495

4,631,341

2,771,447

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

7,012,029,483

1,064,965,554

8,076,995,037

7,878,975,170

(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

(1,784,130,291)

(311,887,438)

(2,096,017,729)

(1,837,320,706)

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

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

Revenue
cost of goods sold

administration, selling and


distribution expenses
Profit from operating activities

tax expense:

Profit after tax for the year

64

300,409,660

16,840,340

317,250,000

340,200,000

569,028,092

131,642,009

700,670,101

813,083,564

65

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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

signature of shareholder (s)

2015

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