Bata Anual Report

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Kmw~ xNYL2 BOARD OF DIRECTORS 4 COMPANY INFORMATION6 NOTICE OF MEETING 7 PRODUCT DEVELOPMENT & MERCHANDISING 8 MARKETING OPERATIONS9 MANUFACTURING10 HUMAN RESOURCES12 CHAIRMAN'S STATEMENT16 DIRECTORS' REPORT21 AUDITORS' REPORT22 STATEMENT OF FINANCIAL POSITION23 STATEMENT OF COMPREHENSIVE INCOME24 STATEMENT OF CHANGES IN EQUITY (GROUP) 24 STATEMENT OF CHANGES IN EQUITY (COMPANY) 25 STATEMENT OF CASH FLOWS 26 NOTES TO THE ACCOUNTS 57 BB EXPORT LTD. (SUBSIDIARY PROFILE)

Contents

ANNUAL REPORT 2010ANNUAL REPORT 2010

Board of Directors

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Fernando Garcia Restrepo Chairman

Present positionGroup Managing Director, Bata Emerging Markets (WEST)

Previous positionsPresident Director, Bata IndonesiaManaging Director, Bata KenyaManaging Director, Bata IndiaVice President, Wholesale & Marketing, Bata Ltd, Toronto, CanadaManaging Director, Bata Bangladesh

Rashidul HasanIndependent Director

Current positionsChairman, Uttara Finance & Investments Ltd.Independent Director, Reckitt Benckiser Bangladesh Ltd. Independent Director, Monno Group of IndustriesTrustee, Kumudini Welfare Trust of Bangladesh Ltd.

Previous positionsFounder Chairman of IDLC the first joint venture leasing company of BangladeshCEO & Managing Director of IPDC the first joint venture investment company ofBangladeshDirector General, Department of Industries of the Republic of Bangladesh

Muhammad QayyumVice Chairman & Managing Director

Previous positionsRetail Manager, Futura Footwear Limited, South AfricaRetail Manager, Bata Pakistan LimitedMerchandising Manager, Bata Pakistan LimitedArea Manager, Bata Pakistan LimitedMerchandise Planning & Budget Control Manager, Bata Pakistan Limited

Rokanuddin Mahmud Bar-at-lawIndependent Director

Senior Advocate in the Supreme Court and High Court in Bangladesh

Mike MiddletonDirector

Current PositionsCFO, Bata Emerging Markets Limited, BermudaDirector, Bata Pakistan LimitedDirector, Bata Shoe of Thailand Public Company LimitedDirector, Bata Malaysia LimitedDirector, Bata Shoe Company of Ceylon LimitedCommissioner, P.T. Sepatu Bata Tbk., Indonesia

Previous PositionsFinance Manager, Bata Shoe Company (Malawi) LimitedCompany Secretary, The Zimbabwe Bata Shoe Company LimitedFinance Manager, Bata Shoe Company (Kenya) LimitedDirector of Finance, Bata Limited, Toronto, CanadaFinance Director, Bata India Limited

ANNUAL REPORT 2010ANNUAL REPORT 20104 5

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Company SecretaryMd. Hashim Reza

AuditorsRahman Rahman HuqChartered Accountants9, Mohakhali C/A (11th Floor)Dhaka-1212

Legal AdvisersMalik Law Associates

BankersEastern Bank Ltd.Dutch Bangla Bank Ltd.HSBC Ltd.Islami Bank (Bangladesh) Ltd.Agrani Bank Ltd.

Factories1. Tongi Industrial Area

Tongi, Gazipur2. Dhamrai, Dhaka

TanneryDhamrai, Dhaka

Registered OfficeBata Shoe Company (Bangladesh) LimitedTongi Industrial AreaTongi, Gazipur

Share Liaison Office6, B. B. Avenue (2nd floor)Dhaka

Company InformationßTJŒJjLr fgq


2010 was as very significant year for product development & marketing for Bata Bangladesh. During the yearBata Bangladesh introduced many exclusive new lines of shoes the majority of which were during festivalperiods. These new arrivals were introduced in different Bata brands. Some of them are as follows:

Notice of Annual General Meeting Product Development & Merchandising

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“North Star” is a sports-casual footwear brand for the youth market. Its collectionsare inspired by world trends and young people’s versatility; developingfashionable commercial products. The qualities that identify this brand are itscreativity, design, dynamism, and modernity. The main objective of our “NorthStar” brand is to develop high quality products that follow world trends, adaptingthem to the youth market and showing that it is a brand with fashionable productsat good value.

For all things ingenious and all things bright, “B.First” represents children at their mostcurious years. Children who are more than willing to pick up, to try and to venture intothe world of trial and error, “B.First” challenges and inspires these students to outdothemselves.

In a day, I sit, stand, walk, run, chase, follow, play, study... and I’d most likely need a pairof sturdy-soled, sporty, & padded shoes to see me through it all! That is our “B First”branded shoe for all children out there who go to school & love to be in study & play allday.

Created in France, “Marie Claire”, epitomises Parisienne style andsophistication. As a brand,”Marie Clarie” encompasses what it is like tobe a woman in charge, a woman who expresses her confidencethrough the clothes and shoes she wears with a tagline “ConfidentFemininity”, Marie Claire provides stylish and chic shoes for thewomen in charge, both while they work in the office, or go out for aparty.

Like a maternal figure, one that’s nurturing and protective, “Bata Comfit” exudes certainwarmth that only a mother can contest to. Unconditionally giving to provide tender lovingcare, moving with you every step of the way, “Bata Comfit” as a brand embraces its imageas your loyal safe keeper.

Notice is hereby given that the 39TH ANNUAL GENERAL MEETING of Bata Shoe Company (Bangladesh)Limited will be held at Dhamrai Factory, Dhaka, on 23 June 2011, Thursday at 10:30 a.m. to transact thefollowing business:1. To receive, consider and adopt the Directors’ Report for the year ended 31 December 2010.2. To receive, consider and adopt the audited financial statements of the Company and the Auditors’ Report

thereon for the year ended 31 December 2010.3. To declare Dividend as recommended by the Directors.4. To elect Directors.5. To appoint Auditors for the year 2011 and to fix their remuneration.

By order of the Board

Md. Hashim RezaTongi, 21 April 2011 Company Secretary

NOTES:1. 4 May 2011 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 theAnnual General Meeting.

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

3. Form of Proxy, duly completed, must be deposited at the Company’s Registered Office at least 48 (forty-eight) hours before the appointed time for the Meeting.

4. A Proxy Form is enclosed.


Bata Industrials

Manufacturing

Non Retail

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Non Retail business played a vital role in the company’s total turnover in 2010.This business channel includes 5 different divisions namely Dealers SupportProgram (DSP), Wholesalers, Rural Sales, Department Stores and Industrial &Institutions. The Company discontinued business with low volume dealers andfocused on the high contribution dealers to minimize business risks and operatingexpenses. In addition, emphasis was given to open new dealers. Around 71 newdealers were opened during the year which contributed around Tk. 88 million inturnover. Currently, the company has 562 DSPs and 393 wholesalers runningunder a sound meaningful business policy focused on development of good

relationship.

For retaining market leadership, the companyfocuses on appropriate shoe design and productdevelopment to meet the needs of the market.

The company has established a newbusiness channel under the brand “BataIndustrials” to serve the industrial growth.After launching Bata Industrials shoes andwe received very encouraging feedbackfrom different industrial groups who focuson quality and safety such as petroche-micals, food Industries, machineries,automobile parts, electrical equipmentsetc.

The company operates two manufacturing facilities – one in Tongi and the other in Dhamrai. With a productioncapacity of 110,000 pairs of shoes daily, the company also has a modern tannery facility with an output of 3.4million square feet of leather annually. In 2010 company produced over 24.9 million pairs. Currently companycontinues producing quality & fashionable shoes to respond to customers’ demand.

Marketing OperationsRetail

“Power” is the sports & athletic- leisure shoe brand. The shoeshave been specially designed for activities like running, training,outdoor, soccer & lifestyle. No other sports brand can give you thevalue for money like “Power”. These shoes help you to performcomfortably any particular outdoor activity.

In 2010 our Retail channel sold 8.6 million pairs of shoes with a turnover of Tk 3.5billion which is 109% growth against last year. To achieve this outstanding growthin spite of global recession, company took different initiatives like productinnovation, aggressive marketing programmes, market expansion, humanresource development, operational efficiency, team work etc.

ANNUAL REPORT 2010

Human Resources

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COSTEF WORKSHOP

Bata Shoe Company (Bangladesh) Ltd. organized a day longWorkshop on COSTEF (Costing & Efficiency) on June 01, 2010at the Human Resources Training Center, Tongi. A total of 30participants from Merchandising, Product Development andDistribution department participated in the workshop. The maintopics were Concept of BSO Costing/Standard Cost, MaterialCalculation, Practical Session - One Pair Area Drawing & PaperSkin Tracing, Labour Cost & Concept of SPM, ProductionExpenses, Capacity Utilization, Prodeffcost, Negotiation withSupplier and Pricing & Gross Margin Establishment.

Bata Bangladesh donated computers with printers and multi-media to the Maer Achol Shelter, Mirpur, Dhaka toset a computer lab. Bata Bangladesh also donated shoes and color televisions for the children of the shelter.

STOREMANCO

With a view to improve sales and management skills of StoreManagers, a number of STOREMANCO have been organizedin 2010. The course covers – Job Responsibilities of StoreManagers, Product Knowledge, Visual Merchandising,Marketing, Distribution & Customers’ Claim, Books of Accounts,Remittance, Store Audit, Effective Utilization of Point of Sales(POS), Staff Productivity Analysis, Store Profile, CustomerService and Team Work.


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company currently has nearly 1,000 independentdealers throughout the country.

Recently your company launched the ‘Bata GiftVoucher’ to extend its service to its valued customers.Our customers will now be able to order and buy theseGift Vouchers to present to their friends, relatives,colleagues and staff. Aggressive media campaigns andin-store promotions were conducted at variousoccasions during year to support our leadershipposition, stimulate sales during peak selling periods andprovide support for our branded programmes. As in thepast, your company participated with sponsorship in anumber of sports activities throughout the country withpromotional programmes.

Your company continues to be highest tax payer in theleather and footwear sector in the country. In 2010 yourcompany contributed Tk 1,361 million to the country’sNational Exchequer. This represents an increase of14% over that of the previous year.

Emphasis has always been given to personneldevelopment since this is an essential requirement forthe company’s progress. Sixteen of our employeesparticipated in overseas courses organised by BSO and584 participated in local and in-house courses in 2010.To promote team spirit, integrity and to improveemployee relations your company organised an annualpicnic and cultural programme where all employeesparticipated. We also continued to award “Employee ofthe Month” certificates which provided due recognitionto deserving employees.

Your company is committed to being a good corporatecitizen. CSR activities involve supporting individualsand communities in need. Partnership with voluntaryand charitable organizations is a prominent feature ofBata’s CSR. In 2010 Bata Bangladesh donated shoes tothe poor students of ‘Shishu Polli Plus’, an UK basednon-religious and non-political organization. BataBangladesh also collaborated with Maer Achol Shelter,a France based non-profit orgainization which supportsstreet children between 5 to 18 years by providingshelter, food, education, and health care & training. Yourcompany donated shoes and computers with printer and

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Fernando Garcia RestrepoChairman

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Dear Shareholders

On behalf of the Board of Directors of the Company, it ismy privilege and honour to present to you the Directors’Report together with the Financial Statements andAuditors’ Report thereon, for the year ended 31December 2010.

Your company continued to achieve significant growth inthe year under review. During the year your companyrecorded a profit before tax of Tk 743 million, animpressive increase of Tk 113 million against 2009. In2010 your company achieved a turnover of Tk. 5,663million representing an increase of more than 10%against 2009.

The retail channel underwent both phases ofconsolidation and expansion. Smaller stores which didnot generate the required returns were closed. At thesame time, more profitable stores were opened orexpanded. Strategic stores were renovated andupgraded to reflect the improved image of the variousconcepts. For example, the total floor area of theflagship store at Bashundhara Mall, Dhaka wasexpanded to 20,000 sq ft, making it the biggest shoestore in the world. This store now represents thebusiness card of Bata Bangladesh. We had the honourof having Mr T.G.Bata, President of the Bata ShoeOrganisation (BSO), officially opening the store inDecember 2010.

In the Non-Retail Sales Department (NRSD), businessgrew by approximately 13% compared to 2009 in spiteof stiffer competition in this segment of the market. Thissegment serves the semi-urban and rural areas. The

ANNUAL REPORT 201014 15

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multi-media functions to set up a computer laboratory forthe children of Maer Achol Shelter, Mirpur, Dhaka. Yourcompany also provides sales training to the older childrenand offer them part time jobs in our retail stores.

Your Board continues its intention to recommend thepayment of dividends commensurate with theprofitability and sustainability of the company’s financialposition. The Board has, therefore, proposed forapproval at the Annual General Meeting the payment ofa final dividend of Tk 10.50 per share which, togetherwith the interim dividend of Tk 14.50 per share paid inDecember 2010, will make a total dividend of Tk 25.00 pershare for the financial year ended 31 December 2010.

The Directors retiring as per Article 104 of the Company’sArticles of Association are Mr. Fernando Garcia Restrepo,Mr. Mike Middleton, Mr. Rashidul Hasan and Mr.Rokanuddin Mahmud. All of them, except Mr. RokanuddinMahmud, offer themselves for re-election.

In conclusion, on behalf of the Board of Directors, Iwould like to express my appreciation to you, ourshareholders, as well as to our valued customers,suppliers, dealers, employees and the Government ofthe People’s Republic of Bangladesh for the supportand cooperation extended to the Company.

Fernando Garcia RestrepoChairman21 April 2011


Your Directors have pleasure in submitting their Report and Audited Financial Statements of the Company forthe year ended 31 December 2010 along with the preceding three years as follows:

FINANCIAL RESULTS 2010 2009 2008 2007TAKA TAKA TAKA TAKA

Net Profit before tax 742,970,530 629,692,445 619,634,702 493,927,273Provision for tax 199,000,000 180,286,000 170,219,000 169,078,000Net profit after tax 543,970,530 449,406,445 449,415,702 324,849,273Unappropriated profit, brought forward 873,194,520 724,748,075 575,292,171 571,417,361

Over tax provision transferred forfinalization of assessment (1981 to 1994) – – – 21,025,537Undistributed dividend reserved – – 1,000,202 –Profit available for appropriation 1,417,165,050 1,174,154,520 1,025,708,075 917,292,171

From which the Directors recommended the following appropriations:

Final dividend paid (previous year) 143,640,000 143,640,000 143,640,000 143,640,000Interim dividend paid (current year) 198,360,000 157,320,000 157,320,000 198,360,000

342,000,000 300,960,000 300,960,000 342,000,000Unappropriated profit carried forward 1,075,165,050 873,194,520 724,748,075 575,292,171

DIVIDEND

For the year ended 31 December 2010 the Board of Directors recommended an interim dividend of Tk. 14.50per share amounting to Tk 198,360,000 and now recommends a final dividend of Tk 10.50 per share amountingto Tk. 143,640,000 thus making a total dividend of Tk.25.00. per share amounting to Tk.342,000,000

DIRECTORS

The Directors retiring as per Article 104 of the Company’s Articles of Association are Mr. Fernando GarciaRestrepo, Mr. Mike Middleton, Mr. Rashidul Hasan and Mr. Rokanuddin Mahmud. All of them, exceptMr. Rokanuddin Mahmud, offer themselves for re-election.

AUDITORS

Rahman Rahman Huq, Chartered Accountants, retire and being eligible offer themselves for re - appointmentas auditors of the Company.

The Directors also report that:u The Financial Statements of the Company present a true and fair view of the Company’s state of

affairs, the results of its operations, cash flow and changes in equity.u Proper books of accounts as required by law have been maintained.u Appropriate accounting policies have been followed in formulating the Financial Statements and

accounting estimates are reasonable and prudent.u The Financial Statements which were prepared in accordance with Bangladesh Accounting

Standards (BAS) and Bangladesh Financial Reporting Standards (BFFS) also comply with theCompanies Act 1994, the Securities and Exchange Rules 1987 and other applicable laws andregulations.

u Internal control system is sound in design and effectively implemented and monitored.u There are no significant doubts on the Company’s ability to continue as a going concern.u The deviation from the operating result of last year is reported in the details to the accounts.u Board meetings, Audit Committee meetings, Shareholdings and the Compliance report as per

Securities and Exchange Commission’s Notification are enclosed herewith as Annexure-I andAnnexure-II respectively.

On behalf of the Board

Muhammad QayyumManaging Director

Directors' Report Statutory Information on the Financial Statements

16 17


Annexure - IThe information regarding Board meetings, Audit Committee meetings and Shareholdings of the Company forthe year 2010 are mentioned below in compliance with Securities and Exchange Commission’s NotificationNo.SEC/CMRRCD/2006-158/Admin/02-08 dated 20 February 2006.

Board MeetingsThe Board met five times during the year 2010. The Company Secretary and the Chief Financial Officer werealso present in the meetings. The attendance by each Director is mentioned below:

Name of Director No. of AttendanceFernando Garcia Restrepo 2 Meetings Mike Middleton 5 MeetingsRashidul Hasan 5 MeetingsRokanuddin Mahmud 1 MeetingRajeev Gopalakrishnan 4 Meetings (resigned on 31 December 2010)Muhammad Qayyum – (appointed on 31 December 2010)

Audit Committee MeetingThe Audit Committee is a sub-committee of the Board. All members of the Audit Committee were appointed bythe Board of Directors among their members. They met once during the year 2010. Except for Mr. FernandoGarcia Restrepo and Mr. Rokanuddin Mahmud all the members were present in the meeting of the committee.The Company Secretary was the Secretary of the Committee. The Audit Committee comprise of:

Fernando Garcia Restrepo – ChairmanMuhammad Qayyum – Member (appointed on 31 December 2010)Mike Middleton – Member Rashidul Hasan – Member as Independent DirectorRokanuddin Mahmud – Member as Independent DirectorRajeev Gopalakrishnan – Member (resigned on 31 December 2010)

ShareholdingsThe names of the Shareholders along with the positions of their shares are listed below:

NAME OF SHAREHOLDER SHARES HELD % OF HOLDINGi) Parent/subsidiary/associate/related parties:

u Bafin (Nederland) B.V. 9,576,000 70.00ii) Directors

u Mr. Rashidul Hasan 64 –iii) Executives (Head of Functions) Nil Niliv) Shareholders who hold 10% or more. Nil Niliv) Other Shareholders who hold less than 10% each

u Institutions (Other Non Resident) 1,030,720 7.53u Institutions (Local) 1,028,800 7.52u Individuals 2,044,416 14.95Total 13,680,000 100.00

1.1 Board’s Size (not less than 5 and notmore than 20 members) √

1.2(i) Independent non-shareholder Directornumber (At least one tenth(1/10) of totalnumber of Directors) √

1.2(ii) Appointed independent Director (s) byelected directors √

1.3 Individual Chairman of the Board and ChiefExecutive and their roles and responsibilities √

1.4 The Directors’ Report to the Shareholders:1.4(a) Fairness of Financial Statements √1.4(b) Maintenance of proper books of accounts √1.4(c) Adoption of appropriate accounting

policies and estimates √1.4(d) Compliance with International Accounting

Standards √1.4(e) Soundness of internal control system √1.4(f) Ability to continue as a going concern √1.4(g) Significant deviations from last year √1.4(h) Presentation of last three years key

operating and financial data √1.4(i) Declaration of dividend √1.4(j) Details of Board Meeting and attendance √1.4(k) Shareholding pattern √2.1 Appointment of Company Secretary (CS),

Chief Financial Officer (CFO) and Head ofAudit (HOA) and define their respectiveroles responsibilities and duties. √

2.2 Attendance of Company Secretary andChief Financial Officer at the Board Meeting √

3.0 Audit Committee:3.1(i) Constitution of Audit Committee √

18 19

Annexure – IIStatus of Compliance with the conditions imposed by the Securities & Exchange Commission’s Notification No.SEC/CMRRCD/2006-158/Admn/02-08, dated 20 February 2006

(Report under Condition No. 5.00)

Compliance Status ExplanationCondition Not for non

No. Title Complied Complied compliancewith the

condition


Independent Auditors' Report to the Shareholders ofBata Shoe Company (Bangladesh) Limited

We have audited the accompanying financial statements of Bata Shoe Company (Bangladesh) Limited, which comprise thestatement of financial position as at 31 December 2010, and the statement of comprehensive income, statement of changesin equity and statement of cash flows for the year then ended, and a summary of significant accounting policies and otherexplanatory information and all related consolidated financial statements of Bata Shoe Company (Bangladesh) Limited andits subsidiary (together referred to as "the group").

Management's responsibility for the financial statementsManagement is responsible for the preparation and fair presentation of these financial statements in accordance withBangladesh Financial Reporting Standards (BFRS), the Companies Act 1994, the Securities and Exchange Rules 1987,other applicable laws and regulations and for such internal control as management determines is necessary to enable thepreparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors' responsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit inaccordance with Bangladesh Standards on Auditing (BSA). Those standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements arefree from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financialstatements. The procedures selected depend on the auditors' judgement, including the assessment of the risks of materialmisstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we considerinternal control relevant to the entity's preparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policiesused and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentationof the financial statements.

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

OpinionIn our opinion, the financial statements including consolidated financial statements, give a true and fair view of the financialposition of the company/group as at 31 December 2010 and of their financial performance and cash flows for the year thenended in accordance with Bangladesh Financial Reporting Standards (BFRS) and comply with the Companies Act 1994,the Securities and Exchange Rules 1987 and other applicable laws and regulations.

We also report that:a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary

for the purposes 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 and its subsidiary so far as

it appeared from our examination of these books;c) the company's/group's statement of financial position and statement of comprehensive income dealt with by the report

are in agreement with the books of account and returns; andd) the expenditure incurred was for the purposes of the company's/group's business.

Dhaka, 21 April 2011 Rahman Rahman HuqChartered Accountants

3.1(ii) Constitution of Committee with Boardmember including one independent Director √

3.1(iii) Filling of casual vacancy in committee N/A3.2(i) Chairman of Committee √3.2(ii) Professional qualification and experience

of the Chairman of the Committee. √3.3.1(i) Reporting to the Board of Directors √3.3.1(ii) (a) Reporting of conflict of interest to

Board of Directors √3.3.1(ii) (b) Reporting of any fraud or irregularity or defect

in the internal control system N/A3.3.1(ii) (c) Reporting of infringement of laws, including

securities related laws, rules and regulations. N/A3.3.1(ii)(d) Reporting any other matter to the

Board of Directors √3.3.2 Reporting of the qualified point to the

Commission N/A3.4 Reporting of activities to the shareholders

and General Investors N/A4.00 External/Statutory Auditors:4.00(i) Non-engagement in appraisal or valuation √4.00(ii) Non engagement in designing of financial

information system √4.00(iii) Non-engagement in bookkeeping or other

services related to the accounting records orfinancial statement √

4.00(iv) Non engagement in broker dealer services √4.00(v) Non engagement in actuarial services √4.00(vi) Non engagement in Internal Audit services √4.00(vii) Non engagement in any other services √

Compliance Status ExplanationCondition Not for non

No. Title Complied Complied compliancewith the

condition

RahmanRahmanHuqCharteredAccountants9MohakhaliC/A(11th&12thFloors)Dhaka1212Bangladesh

Telephone+880(2)9886450-2Fax +880(2)9886449Email [email protected] www.rahman-rahman-huq.com


Bata Shoe Company (Bangladesh) LimitedStatement of Financial Position as at 31 December 2010

Bata Shoe Company (Bangladesh) LimitedStatement of Comprehensive Income for the year ended 31 December 2010

22 23

Notes Group Company2010 2010 2009Taka Taka Taka

AssetsProperty, plant and equipment 4 663,672,651 646,335,304 508,297,292 Capital work in progress 5 8,906,555 8,906,555 13,860,671 Investment in subsidiary 6 - 19,970,000 19,970,000 Deferred tax assets 7 7,000,000 7,000,000 16,000,000 Prepayments of rent 10 69,824,112 69,824,112 38,755,398

Total non-current assets 749,403,318 752,035,971 596,883,361

Inventories 8 1,701,382,223 1,701,382,223 1,433,325,407 Accounts receivable 9 132,014,023 132,014,023 101,858,206 Advances, deposits and prepayments 10 299,007,464 299,007,285 238,829,873 Cash and cash equivalents 11 172,640,520 172,517,113 352,067,178

Total current assets 2,305,044,230 2,304,920,644 2,126,080,664 Total assets 3,054,447,548 3,056,956,615 2,722,964,025

EquityShare capital 12 136,800,000 136,800,000 136,800,000 Reserves and surplus 13 1,184,257,799 1,185,657,853 983,687,323

Total equity attributable to equity holders 1,321,057,799 1,322,457,853 1,120,487,323 Less: Non-controlling interest 2,103 - -

Total equity 1,321,055,696 1,322,457,853 1,120,487,323

LiabilitiesDeferred liability 14 147,847,820 147,847,820 131,959,233 Total non-current liabilities 147,847,820 147,847,820 131,959,233

Creditors for goods 15 392,729,864 392,729,864 278,984,626 Creditors for expenses 16 213,120,081 213,120,081 282,171,467 Creditors for other finance 17 179,539,644 180,674,554 173,433,804 Accrued expenses 18 263,121,200 263,098,200 236,257,580 Provision for tax 19 479,056,283 479,051,283 454,922,477 Unclaimed dividend 57,976,960 57,976,960 44,747,515

Total current liabilities 1,585,544,032 1,586,650,942 1,470,517,469 Total liabilities 1,733,391,852 1,734,498,762 1,602,476,702 Total equity and liabilities 3,054,447,548 3,056,956,615 2,722,964,025

The annexed notes 1 to 39 form an integral part of these financial statements.

Muhammad Qayyum Rashidul Hasan Md. Hashim RezaManaging Director Director Company Secretary

As per our report of same date.


Notes Group Company2010 2010 2009Taka Taka Taka

Revenue 20 5,663,090,394 5,663,090,394 5,141,034,678 Cost of sales 21 (3,617,511,236) (3,617,511,236) (3,237,854,140)Gross profit 2,045,579,158 2,045,579,158 1,903,180,538 Exchange gain/(loss) (24,598) (24,598) 269,207 Other income 22 17,845,108 17,845,108 7,103,518 Administration, selling and distribution expenses 23 (1,293,524,631) (1,292,125,679) (1,254,198,947)Profit from operating activities 769,875,037 771,273,989 656,354,316Finance income 24 14,558,419 14,556,624 10,400,256 Finance expenses 25 (3,756,371) (3,756,371) (3,920,419)Net finance income/(expenses) 10,802,048 10,800,253 6,479,837 Profit before contribution to workers' profit participation fund 780,677,085 782,074,242 662,834,153Contribution to workers' profit participation fund (39,103,712) (39,103,712) (33,141,708)Profit before income tax 29 741,573,373 742,970,530 629,692,445Income tax expense:

Current tax 19 190,005,000 190,000,000 184,000,000 Deferred tax 7 9,000,000 9,000,000 (3,714,000)

199,005,000 199,000,000 180,286,000 Profit for the year 542,568,373 543,970,530 449,406,445

Other comprehensive income - - -Total comprehensive income for the year 542,568,373 543,970,530 449,406,445

Profit/Total comprehensive income attributable to:Owners of the company 542,570,476 543,970,530 449,406,445 Non-controlling interest (2,103) - -

542,568,373 543,970,530 449,406,445Basic earnings per share (par value Tk 10) 32 39.66 39.76 32.85

Profit after tax from manufacturing and trading has been shown in attached Exhibit - I.


Muhammad Qayyum Rashidul Hasan Md. Hashim RezaManaging Director Director Company Secretary




Bata Shoe Company (Bangladesh) LimitedStatement of Cash Flows for the year ended 31 December 2010

24 25

Bata Shoe Company (Bangladesh) LimitedStatement of Changes in Equity (Group) for the year ended 31 December 2010

Reserves and surplus

Non- TotalReserve on distributable Reserves Total equity Non-

Share revaluation special General Retained and attributable to controlling TotalParticulars capital of land reserve reserve earnings surplus equity holders interest equity

Taka Taka Taka Taka Taka Taka Taka Taka Taka

Balance as at 1 January 2009 136,800,000 60,631,183 998,620 48,863,000 724,748,075 835,240,878 972,040,878 - 972,040,878

Total comprehensive income for 2009Profit for the year - - - - 449,406,445 449,406,445 449,406,445 - 449,406,445

Transactions with the shareholdersFinal dividend for the year 2008 - - - - (143,640,000) (143,640,000) (143,640,000) - (143,640,000)Interim dividend for the year 2009 - - - - (157,320,000) (157,320,000) (157,320,000) - (157,320,000)

Balance as at 31 December 2009 136,800,000 60,631,183 998,620 48,863,000 873,194,520 983,687,323 1,120,487,323 - 1,120,487,323

Total comprehensive income for 2010Profit for the year - - - - 542,570,476 542,570,476 542,570,476 (2,103) 542,568,373

Transactions with the shareholdersFinal dividend for the year 2009 - - - - (143,640,000) (143,640,000) (143,640,000) - (143,640,000)Interim dividend for the year 2010 - - - - (198,360,000) (198,360,000) (198,360,000) - (198,360,000)

Balance as at 31 December 2010 136,800,000 60,631,183 998,620 48,863,000 1,073,764,996 1,184,257,799 1,321,057,799 (2,103) 1,321,055,696

Reserves and surplusNon- Total

Reserve on distributable ReservesShare revaluation special General Retained and Total

Particulars capital of land reserve reserve earnings surplus equity Taka Taka Taka Taka Taka Taka Taka

Balance as at 1 January 2009 136,800,000 60,631,183 998,620 48,863,000 724,748,075 835,240,878 972,040,878

Total comprehensive income for 2009Profit for the year - - - - 449,406,445 449,406,445 449,406,445

Transactions with the shareholdersFinal dividend for the year 2008 - - - - (143,640,000) (143,640,000) (143,640,000)Interim dividend for the year 2009 - - - - (157,320,000) (157,320,000) (157,320,000)

Balance as at 31 December 2009 136,800,000 60,631,183 998,620 48,863,000 873,194,520 983,687,323 1,120,487,323

Total comprehensive income for 2010Profit for the year - - - - 543,970,530 543,970,530 543,970,530

Transactions with the shareholdersFinal dividend for the year 2009 - - - - (143,640,000) (143,640,000) (143,640,000)Interim dividend for the year 2010 - - - - (198,360,000) (198,360,000) (198,360,000)

Balance as at 31 December 2010 136,800,000 60,631,183 998,620 48,863,000 1,075,165,050 1,185,657,853 1,322,457,853

Bata Shoe Company (Bangladesh) LimitedStatement of Changes in Equity (Company) for the year ended 31 December 2010

Group Company2010 2010 2009Taka Taka Taka

Cash flows from operating activities

Cash receipts from customers 5,629,704,667 5,629,704,667 5,121,291,041 Cash payments to and on behalf of employees (895,841,043) (895,841,043) (826,580,484)Cash payments to suppliers and contractors for goods and services (4,204,011,159) (4,203,315,494) (3,579,304,433)Cash generated from operating activities 529,852,465 530,548,130 715,406,124

Interest received from STD account 7,306,243 7,304,448 6,428,922 Interest paid (3,780,969) (3,780,969) (3,920,419)Income tax paid (171,567,300) (171,567,121) (176,623,158)Net cash from operating activities 361,810,439 362,504,488 541,291,469

Cash flows from investing activities

Interest received from FDR 7,239,425 7,239,425 4,226,193 Acquisition of subsidiary - (18,729,090) (106,000)Proceed from sales of property, plant and equipment 3,701,115 3,701,115 4,140,332 Acquisition of property, plant and equipment (96,300,656) (78,283,022) (69,869,753)Payment for capital work in progress (127,212,426) (127,212,426) (54,100,412)Net cash used in investing activities (212,572,542) (213,283,998) (115,709,640)

Cash flows from financing activities

Dividend paid (328,770,555) (328,770,555) (336,922,443)Net cash used in financing activities (328,770,555) (328,770,555) (336,922,443)

Net cash increase/(decrease) in cash and cash equivalents (179,532,658) (179,550,065) 88,659,386

Cash and cash equivalents as at 1 January 352,173,178 352,067,178 263,407,792

Cash and cash equivalents as at 31 December (Note 11) 172,640,520 172,517,113 352,067,178


Bata Shoe Company (Bangladesh) LimitedNotes to the Financial Statements as at and for the year ended 31 December 2010

26 27

2.5 Changes in accounting policiesThe company has applied the following BASs/BFRSs for the first time in the year 2010.

BAS 1: Presentation of Financial Statements (Revised)BAS 27: Consolidated and Separate Financial StatementsBAS 32: Financial Instruments: PresentationBAS 39: Financial Instruments: Recognition and MeasurementBFRS 7: Financial Instruments: DisclosuresBFRS 8: Operating Segments

BAS 27 has been applied since it is the first time the company is preparing consolidated financial statements. BAS1 (Revised), BAS 32, BAS 39, BFRS 7 and BFRS 8 have been applied as these are applicable to the companiesfrom 1 January 2010.

These BASs/BFRSs have been applied prospectively and have had no material impact on earnings per share.

2.6 Reporting periodThe reporting period of Bata Shoe Company (Bangladesh) Limited is from 1 January 2010 to 31 December 2010whereas the reporting period of its subsidiary, BB Export Ltd. is from 19 November 2009 (from date of incorporation)to 31 December 2010. Since the transactions which occurred between 19 November 2009 to 31 December 2009 areimmaterial, the whole period has been consolidated with the parent company in this year's financial statements.

3. Significant accounting policiesThe accounting policies set out below have been applied consistently to all periods presented in these financialstatements, and have been applied consistently, except as explained in note 2.5, which addresses changes inaccounting policies. Accounting policies related to consolidation process became applicable for the group after theformation of BB Export Ltd. in 2009.

Comparative information for 2009 provided in these financial statements reflect Bata's individual financial statementsonly as at and for the year ended 31 December 2009 (as consolidation procedures were not applicable at that time).Certain comparative amounts have been reclassified to conform to current year’s presentation (Note 39.1).

3.1 Basis of consolidation

3.1.1 Subsidiaries Subsidiaries are entities controlled by the group. The financial statements of subsidiaries are included in theconsolidated financial statements from the date that control commences until the date that control ceases. Theaccounting policies of subsidiaries have been changed when necessary to align them with the policies adopted bythe Group. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controllinginterests even if doing so causes the non-controlling interest to have deficit balance. As the plant of BB Export Ltdhas been set up at Dhamrai, all figures are consolidated with the figures of Bata's Dhamrai factory and policies arealigned with that of Bata's Dhamrai factory (where applicable).

3.1.2 Transaction eliminated on consolidationIntra-group balances and transactions, and any unrealised income and expenses arising from intra-grouptransactions are eliminated in preparing consolidated financial statements. Unrealised gains arising from transactionswith equity accounted investees are eliminated against the investment to the extent of the group's interest in theinvestee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there isno evidence of impairment.

3.2 Foreign currencyTransactions in foreign currencies are translated to the respective functional currencies of Group entities at exchangerates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at thereporting date are retranslated to the functional currency at the exchange rate at that date. Foreign currencydifferences arising on translation are recognised in profit or loss.

1. Reporting entityBata Shoe Company (Bangladesh) Limited (hereinafter referred to as "Bata"/"the company"/"the parent 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 theoperating companies of worldwide Bata Shoe Organization (BSO). The shares in the company are listed in bothDhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) and mostly held by Baffin (Netherlands) B.V.The financial period of the company covers one year from 1 January to 31 December. In November 2009, thecompany established a wholly owned subsidiary named "BB Export Ltd." (hereinafter referred to as "BB Export"/ "thesubsidiary company"). BB Export has not started its operation till 31 December 2010.

The company is mainly engaged in manufacturing and marketing of leather, rubber, plastic, canvas footwear, hosieryand accessories items as well as finished leather. Manufacturing plants of the company are situated at Tongi andDhamrai.

These financial statements as at and for the year ended 31 December 2010 include consolidated ("Group") andseparate ("Company") financial statements. The consolidated financial statements comprise the financial statementsof the company and its subsidiary, BB Export Ltd. (together referred to as "the group"). The separate financialstatements present the standalone financial statements of Bata Shoe Company (Bangladesh) Limited.

2. Basis of preparation

2.1 Statement of complianceThese financial statements (including consolidated and separate financial statements) have been prepared inaccordance with Bangladesh Financial Reporting Standards (BFRS), the Companies Act 1994, the Securities andExchange Rules 1987 and other applicable laws and regulations.

These financial statements were authorised for issue by the Board of Directors on 21 April 2011.

2.2 Basis of measurementThese financial statements have been prepared on the historical cost basis except revaluation of land at Tongi madein 1979 in the statement of financial position.

2.3 Functional and presentational currencyThese financial statements are presented in Bangladesh Taka (Taka/Tk) which is both functional currency andpresentational currency of the group/company. The amounts in these financial statements have been rounded off tothe nearest Taka except the amounts presented in revenue in note 20, statement of production in note 23.2 andrelated party transactions in note 36 have been rounded off to the nearest thousand Taka and credit facilitiesavailable as at 31 December in note 11.2 have been rounded off to the nearest million Taka.

2.4 Use of estimates and judgmentsThe preparation of these financial statements requires management to make judgments, estimates and assumptionsthat 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. Revision to accounting estimates arerecognised in the period in which the estimates are revised and in any future periods affected.

Information about critical judgments in applying accounting policies that have the most significant effect on theamounts recognised in the financial statements is included in the following notes:

Note 3.5 InventoriesNote 4 Property, plant and equipmentNote 7 Deferred tax assetsNote 14 Deferred liabilityNote 19 Provision for taxNote 38 Contingent liabilities


3.3 Financial instrumentsA financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equityinstrument of another entity.

3.3.1 Financial assetsThe group initially recognises loans and receivables and deposits on the date that they are originated. All otherfinancial assets are recognised initially on the trade date, which is the date the Group becomes a party to thecontractual provisions of the instrument.

The group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or ittransfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantiallyall the risks and rewards of ownership of the financial asset are transferred.

Financial assets include cash and cash equivalents, accounts receivable, advances, deposits and prepayments.

3.3.1.1 Accounts receivablesAccounts receivables represent the amounts due from institutional customers, money on way from stores anddepots, export customers etc. Accounts receivables are stated net of bad debts provision.

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

3.3.1.2 Cash and cash equivalentsCash and cash equivalents comprise cash on hand, cash in transit and cash at bank including fixed deposits havingmaturity of three months or less which are available for use by the company without any restriction. Bank overdraftsthat are repayable on demand and form an integral part of the group’s cash management are included as acomponent of cash and cash equivalents.

3.3.2 Financial liabilitiesThe group recognises all financial liabilities on the trade date which is the date the group becomes a party to thecontractual provisions of the instrument.

The group derecognises a financial liability when its contractual obligations are discharged, cancelled or expired.Financial liabilities comprise trade and other creditors only.

3.3.2.1 Trade and other creditorsThe group recognises a financial liability when its contractual obligations arising from past events are certain and thesettlement of which is expected to result in an outflow from the company of resources embodying economic benefits.

3.4 Property, plant and equipment

3.4.1 Recognition and measurementItems of property, plant and equipment excluding land are measured at cost less accumulated depreciation andaccumulated impairment losses. Land is measured at revalued amount.

Cost includes expenditures that are directly attributable to the acquisition of assets. The cost of self-constructedassets includes the cost of materials and direct labour, any other cost directly attributable to bringing the asset to aworking condition for the intended use, the costs of dismantling and removing the items and restoring the site onwhich they are located, and capitalised borrowing costs.

The gain or loss on disposal of an item of property, plant and equipment is determined by comparing the proceedsfrom disposal with the carrying amount of the property, plant and equipment, and is recognised net within otherincome/other expenses in profit or loss. When revalued assets are sold, any related amount included in therevaluation reserve is transferred to retained earnings.

3.4.2 Subsequent costsThe cost of replacing a component of an item of property, plant and equipment is recognised in the carrying amountof the item if it is probable that the future economic benefits embodied within the component will flow to the group,and its cost can be measured reliably. The carrying amount of the replaced component is derecognised. The costsof the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.

3.4.3 Depreciation Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets areassessed and if a component has a useful life that is different from the remainder of that asset, that component isdepreciated separately.

No depreciation is charged on land and capital work in progress. Depreciation is charged on all other items ofproperty, plant and equipment of Tongi factory on reducing balance method while straight line method is followed inrespect of Dhamrai factory. The rates of depreciation are as follows:

Tongi DhamraiBuilding - Factory 20% 2.5%

- General 10% 2.5%Plant and machinery 15% 7.5%Motor vehicles 20% 20%Furniture, fixtures and equipment 10% - 15% 10%

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted ifappropriate.

3.4.4 Capital work in progressProperty, plant and equipment that is being under construction/acquisition is accounted for as capital work inprogress until construction/acquisition is complete and measured at cost.

3.5 Inventories Inventories except raw material in transit are measured at the lower of cost and net realisable value. The cost ofinventories 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. Inthe case of manufactured inventories and work in progress, cost includes an appropriate share of productionoverheads based on normal operating capacity.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs ofcompletion and selling expenses.

3.6 Impairment

3.6.1 Non-derivative financial assetsFinancial assets not carried at fair value through profit or loss, loans and receivables are assessed at each reportingdate to determine whether there is objective evidence that it is impaired. A financial asset is impaired if objectiveevidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event hada negative effect on the estimated future cash flows of that asset that can be estimated reliably.

3.6.2 Non-financial assetsThe carrying amounts of the group's non-financial assets, other than inventories and deferred tax assets, arereviewed at each reporting date to determine whether there is any indication of impairment. If any such indicationexists then the recoverable amount of the asset is estimated. An impairment loss is recognised if the carrying amountof an asset or its related cash-generating unit (CGU) exceeds its estimated recoverable amount.


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

3.8 Employee benefitsThe 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.

3.8.1 Defined contribution plan (provident fund)The company maintains three contributory provident funds for its permanent employees categorised as managers,officers and supervisors and workers. These are administered by the Boards of Trustees.

3.8.2 Defined benefit plan (gratuity and pension fund)The company maintains an unfunded gratuity scheme, provision in respect of which is made annually for theemployees other than managerial staff. Gratuity payable at the end of each year has been determined on the basisof existing rules and regulations of the company. Actuarial valuation of the gratuity fund is carried out by aprofessional actuary. A funded pension fund is also in operation for managerial staff.

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

3.10 RevenueRevenue from the sale of goods is measured at fair value of the consideration received or receivable, net of returnsand allowances, Value Added Tax and trade discounts.Revenue from sale of goods is recognised when the significant risks and rewards of ownership have been transferredto the buyer, the company has no managerial involvement of ownership for the goods, the amount of the revenueand the cost of the transaction can be measured reliably, and it is probable that the economic benefits associatedwith the transactions will flow to the company.

3.11 Lease paymentsPayments 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.

3.12 Finance income and expensesFinance income comprises interest income on funds invested and interest on shop managers account held with thecompany. Interest income is recognised on accrual basis.Finance expense comprises interest expense on overdraft, finance lease and interest on shop managers accountheld with the company. All finance expenses are recognised in the statement of comprehensive income.

3.13 TaxIncome tax expense comprises current and deferred tax. Income tax expense is recognised in the statement ofcomprehensive income except to the extent that it relates to items recognised directly in equity, in which case it isrecognised in equity.

3.13.1 Current taxCurrent tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantivelyenacted 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 payablefor declaring dividend more than 20% of paid up capital.Being a private limited company, applicable tax rate for BB Export Ltd. is 37.50%.

3.13.2 Deferred taxDeferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilitiesfor financial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured at the taxrates that are expected to be applied to the temporary differences when they are reversed, based on the laws thathave been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset ifthere is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes leviedby 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 theextent that it is probable that future taxable profits will be available against which they can be utilised. Deferred taxassets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the relatedtax benefit will be realised.

3.14 Earnings per shareThe group/company presents basic and diluted (when dilution is applicable) earnings per share (EPS) for its ordinaryshares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of thegroup/company with the weighted average number of ordinary shares outstanding during the period, adjusted for theeffect of change in number of shares for bonus issue, share split and reverse split. Diluted EPS is determined byadjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary sharesoutstanding, for the effects of all dilutive potential ordinary shares. However, dilution of EPS is not applicable for thesefinancial statements as there was no dilutive potential ordinary shares during the relevant periods.

3.15 Segment reportingAn operating segment is a component of the group that engages in business activities from which it may earnrevenues and incur expenses, including revenues and expenses that relate to transactions with any of the group’sother components. All operating segments’ operating results are reviewed regularly by the group’s management tomake decisions about resources to be allocated to the segment and to assess its performance, and for which discretefinancial information is available.Segment results that are reported to the management include items directly attributable to a segment as well asthose that can be allocated on a reasonable basis.

3.16 Duty drawbackDuty drawback claimed on export sales is adjusted against cost of imported raw materials.

3.17 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 rawmaterials consumed. Income from non-operating activities is recognised as other income.

3.18 Workers' profit participation fund (WPPF)The company provides 5% of its profit before charging such expense as WPPF in accordance with The BangladeshLabour Act 2006.

3.19 Events after the reporting periodEvents after the reporting period that provide additional information about the group's/company's position at the dateof statement of financial position or those that indicate the going concern assumption is not appropriate are reflectedin the financial statements. Events after the reporting period that are not adjusting events are disclosed in the noteswhen material.


4. Property, plant and equipment4(a) Year 2010 (Group)

Cost/Valuation Depreciation

Disposals/ Adjustment Written down Particulars As at Additions transfers As at As at Charged for As at value as at

1 January during during 31 December 1 January for disposals/ 31 December 31 December 2010 the year the year 2010 2010 the year transfers 2010 2010 Taka Taka Taka Taka Taka Taka Taka Taka Taka

Land 1 86,057,856 - - 86,057,856 - - - - 86,057,856Building 2 268,177,094 35,945,541 - 304,122,635 149,660,862 9,945,357 - 159,606,219 144,516,416Plant and machinery 554,207,671 114,657,930 (18,539,895) 650,325,706 454,136,141 24,472,702 (17,986,383) 460,622,460 189,703,246Motor vehicles 20,080,251 1,482,746 - 21,562,997 11,665,076 1,979,584 - 13,644,660 7,918,337Furniture, fixturesand equipment 334,561,723 76,380,981 (13,138,011) 397,804,693 139,325,224 32,549,990 (9,547,317) 162,327,897 235,476,796

1,263,084,595 228,467,198 (31,677,906) 1,459,873,887 754,787,303 68,947,633 (27,533,700) 796,201,236 663,672,651

4(b) Year 2010 (Company)Cost/Valuation Depreciation



Land 1 86,057,856 - - 86,057,856 - - - - 86,057,856 Building 2 268,177,094 35,945,541 - 304,122,635 149,660,862 9,945,357 - 159,606,219 144,516,416 Plant and machinery 554,207,671 97,010,327 (18,539,895) 632,678,103 454,136,141 23,810,917 (17,986,383) 459,960,675 172,717,428 Motor vehicles 20,080,251 1,482,746 - 21,562,997 11,665,076 1,979,584 - 13,644,660 7,918,337 Furniture, fixturesand equipment 334,561,723 76,010,950 (13,138,011) 397,434,662 139,325,224 32,531,488 (9,547,317) 162,309,395 235,125,267

1,263,084,595 210,449,564 (31,677,906) 1,441,856,253 754,787,303 68,267,346 (27,533,700) 795,520,949 646,335,304

4(c) Year 2009 (Company)Cost/Valuation Depreciation



Land 1 86,057,856 - - 86,057,856 - - - - 86,057,856 Building 2 248,260,456 19,916,638 - 268,177,094 139,838,274 9,822,588 - 149,660,862 118,516,232 Plant and machinery 573,893,788 17,736,318 (37,422,435) 554,207,671 471,998,008 16,387,327 (34,249,194) 454,136,141 100,071,530 Motor vehicles 22,540,651 1,400,000 (3,860,400) 20,080,251 11,917,151 2,103,794 (2,355,869) 11,665,076 8,415,175 Furniture, fixturesand equipment 270,092,240 71,056,538 (6,587,055) 334,561,723 119,123,670 25,889,830 (5,688,276) 139,325,224 195,236,499

1,200,844,991 110,109,494 (47,869,890) 1,263,084,595 742,877,103 54,203,539 (42,293,339) 754,787,303 508,297,292

1. Land includes Tk. 60,631,183 by revaluation in 1979.

2. Building includes properties at 24 Bangabandhu Avenue, Dhaka which were purchased in 1985 from the Government ofBangladesh at a cost of Tk 5,344,417. Sale deed is yet to be executed.

4.1 Depreciation charged to:Group Company2010 2010 2009Taka Taka Taka

Cost of goods sold (Note 21.1) 27,300,975 27,300,975 20,450,664Administration, selling and distribution expenses (Note 23) 41,646,658 40,966,371 33,752,875

68,947,633 68,267,346 54,203,539

4.2 Disposal of property, plant and equipmentOriginal Accumulated Book Sale Mode of

Particulars cost depreciation value value disposal PurchaserTaka Taka Taka Taka

Machinery 18,539,895 17,986,383 553,512 2,464,537 Auction Various partiesComputer 191,650 42,817 148,833 104,040 Ins. ClaimFurniture, fixturesand equipment 161,900 53,176 108,724 107,493 Auction Various partiesShop furniture andequipment 12,085,361 9,160,439 2,924,922 489,394 Auction Various partiesShop furniture 699,100 290,885 408,215 535,651 Ins. Claim

31,677,906 27,533,700 4,144,206 3,701,115

4.3 CIF value of capital assetsNo capital assets were imported under CIF basis. However, import of capital assets by the group under C&F basiswas as follows:

Capital assets Foreign currency Local currency2010 2009 2010 2009

(Taka) (Taka) Plant and machinery USD 996,245 214,082 69,592,050 15,100,326

EUR 193,925 - 18,395,196 - 87,987,246 15,100,326

5. Capital work in progressGroup Company2010 2010 2009Taka Taka Taka

Balance as at 1 January 13,860,671 13,860,671 - Add: Addition during the year 127,212,426 127,212,426 54,100,412

141,073,097 141,073,097 54,100,412 Less: Transfer to property plant & equipment during the year 132,166,542 132,166,542 40,239,741 Balance as at 31 December (Note 5.1) 8,906,555 8,906,555 13,860,671

5.1 Capital work in progress represent as followsBuilding 1,263,410 1,263,410 13,546,426 Plant and machinery 7,643,145 7,643,145 64,245 Equipment - - 250,000

8,906,555 8,906,555 13,860,671

6. Investment in subsidiaryOn 19 November 2009 the company subscribed an amount of Tk 19,970,000 for 199,700 shares (99.85% of totalshare capital) of Tk 100 each of its newly incorporated wholly owned subsidiary BB Export Limited. Thissubsidiary was incorporated in Bangladesh and did not commence its operation till 31 December 2010. Bata haspaid Tk. 18,835,090 till 31 December 2010 for subscription in shares (2009: Tk. 106,000).


7. Deferred tax assetsDeferred tax assets is arrived at as follows:


Balance as at 1 January 16,000,000 16,000,000 12,286,000 Addition/(reduction) during the year (9,000,000) (9,000,000) 3,714,000 Balance as at 31 December 7,000,000 7,000,000 16,000,000

Carryingamount on the Taxable/

date of (deductible) statement of temporary

financial position Tax base difference Taka Taka Taka

(a) As at 31 December 2010 (Company)Property, plant and equipment (excluding land and certain motor vehicles) 558,849,861 401,731,522 157,118,339

Provision for staff gratuity (Note 14) (147,847,820) - (147,847,820)Provision for bad and doubtful debts (Note 9.3 & 9.4) (35,923,248) - (35,923,248)

Net deductible temporary difference (26,652,729)Deferred tax assets 7,000,000

(b) As at 31 December 2010 (Group)Deferred tax assets for Bata Shoe Company (Bangladesh) Limited 7,000,000 Deferred tax assets for BB Export Ltd. -

7,000,000 No deferred tax has been recognised for BB Export Ltd. because of its immaterial impact.

(c) As at 31 December 2009 (Company)Property, plant and equipment (excluding land and certain motor vehicles) 420,454,951 315,932,419 104,522,532

Provision for staff gratuity (net of payment) (131,959,233) - (131,959,233)Provision for bad and doubtful debts (36,174,716) - (36,174,716)

Net deductible temporary difference (63,611,417)

Deferred tax assets 16,000,000

8. InventoriesGroup Company2010 2010 2009Taka Taka Taka

Raw materials 440,215,075 440,215,075 311,328,857 Work in process 110,165,436 110,165,436 88,710,604 Finished goods 1,151,001,712 1,151,001,712 1,033,285,946

1,701,382,223 1,701,382,223 1,433,325,407

9. Accounts receivableTrade (unsecured) - considered good

Export customers - Non BSO companies 10,754,687 10,754,687 8,659,308 Receivables from dealers (Note 9.1) 103,491,137 103,491,137 58,596,776 Receivables from institutional sale (Note 9.2) 16,633,585 16,633,585 31,399,966

130,879,409 130,879,409 98,656,050Others (unsecured) - considered good

Insurance claims 714,474 714,474 1,229,210VAT claims 87,577 87,577 108,480Claim receivable on import 12,421 12,421 339,664 Duty drawback claim receivable 320,142 320,142 654,522

1,134,614 1,134,614 2,331,876Agents and employees (considered doubtful - Note 9.3) - - 870,280

132,014,023 132,014,023 101,858,206

9.1 Receivables from depots Accounts receivable 121,503,138 121,503,138 75,064,646 Provision for doubtful debts (Note 9.4) (18,012,000) (18,012,000) (16,467,870)

103,491,137 103,491,137 58,596,776

9.2 Receivables from institutional sale Accounts receivable 16,831,745 16,831,745 31,399,966 Provision for doubtful debts (Note 9.4) (198,160) (198,160) -

16,633,585 16,633,585 31,399,966

9.3 Agents and employees Accounts receivable 17,713,088 17,713,088 20,577,126 Provision for doubtful debts (Note 9.4) (17,713,088) (17,713,088) (19,706,846)

- - 870,280

9.4 Provision for doubtful debts Total provision for doubtful debts as at 31 December 2010 which were arrived at as follows:

Receivables from depots (Note 9.1) 18,012,000 Receivables from institutional sale (Note 9.2) 198,160 Agents and employees (Note 9.3) 17,713,088

35,923,248

Balance as at 1 January 36,174,716 36,174,716 35,611,243 Provision made during the year 1,742,290 1,742,290 2,571,501 Bad debts written off during the year (790,695) (790,695) (369,125)Provision reversed during the year (1,203,063) (1,203,063) (1,638,903)Balance as at 31 December 35,923,248 35,923,248 36,174,716


Accounts receivable were aged as below:Group and company Company

2010 2009Below Over Below Over

six months six months six months six monthsTaka Taka Taka Taka

Export customers - Non BSO companies 10,754,687 - 8,659,308 - Receivables from dealers 103,491,137 18,012,001 58,596,776 16,467,870 Receivables from institutional sale 16,633,585 198,160 31,399,966 - Insurance claims 714,474 - 1,229,210 - VAT claims 87,577 - 108,480 - Claim receivable on import 12,421 - 339,664 -Duty draw back claim receivable 320,142 - 654,522 - Agents and employees - 17,713,088 870,280 19,706,846

132,014,023 35,923,248 101,858,206 36,174,716

9.5 Debts due by directors, officers and other related partiesAs at 31 December 2010, accounts receivable does not include any receivable from:(a) The directors and other officers of the company/group;(b) 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 36; and(c) Companies under the same management.

10. Advances, deposits and prepaymentsGroup Company2010 2010 2009Taka Taka Taka

Advances (considered good) to:Agents and employees 5,145,090 5,145,090 599,592 Suppliers against materials and services 4,381,599 4,381,599 1,844,729

9,526,689 9,526,689 2,444,321

Advance income tax 92,911,502 92,911,323 87,221,219 Security and other deposits 148,957,098 148,957,098 123,327,401 Prepayments to landlords (current portion - Note 10.1) 47,612,175 47,612,175 25,836,932

299,007,464 299,007,285 238,829,873

10.1 Prepayments of rentPrepayments to landlords 117,436,287 117,436,287 64,592,330 Less: Current portion (Note 10) 47,612,175 47,612,175 25,836,932 Non-current portion 69,824,112 69,824,112 38,755,398

10.2 Loans and advances to subsidiaries, directors, officers and other related partiesOther than those mentioned in note above, there were no loans or advances to:(a) Directors of the company/group;(b) Firms or private limited companies respectively in which any director of the company is a partner, director or

member; and(c) Subsidiaries or companies under the same management.

11. Cash and cash equivalentsGroup Company2010 2010 2009Taka Taka Taka

Cash balances:On hand 852,396 852,396 574,865

In transit:From stores 30,406,295 30,406,295 38,687,463From depots 10,037,761 10,037,761 15,123,381From institutions 6,306,395 6,306,395 1,177,007

Balances with banks in:Current accounts (Note 11.1)

In Taka 12,809,771 12,709,173 (48,603,002)In USD 28,070,498 28,070,498 -Short term deposits 84,157,404 84,134,595 345,107,464

125,037,673 124,914,266 296,504,462 172,640,520 172,517,113 352,067,178

11.1 Book overdraftsThe current accounts include book overdrafts (i.e. cheque outstanding in excess of deposits) from Eastern BankLimited and HSBC as follows:

2010 2009 Taka Taka

Eastern Bank Limited 5,089,333 85,892,508 HSBC - 1,296,359

5,089,333 87,188,86711.2 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 fundedfacilities include Letters of Credit (LC), Letters of Guarantee, Packing Credit, LDBP, FDBP and foreign exchangeforward contracts (FX Forward). The funded facilities include overdraft facility, short term loan and import loan. Theaggregate amount of available short term working capital facilities is Tk 740 million (2009: Tk 675 million) of which nonfunded limit is Tk 340 million (2009: Tk 375 million) and funded limit is Tk 400 million (2009: Tk 300 million).Detail of the total facilities are stated below:(a) HSBC Bank

i) L/C facility - Tk 200 million (2009: Tk 100 million).ii) Overdraft / short term loan facility - Tk 200 million (2009: Tk 200 million).

(b) EBL Banki) L/C facility - Tk 400 million (2009: Tk 400 million).ii) Overdraft facility / short term loan facility - Tk 200 million (2009: Tk 200 million).

2010 2009(Tk in million) (Tk in million)

Total credit facilities available 1,000 800 Credit facilities not availed 740 675


12. Share capital

2010 2009 Taka Taka

Authorised:

20,000,000 ordinary shares of Tk 10 each 200,000,000 200,000,000

Issued, subscribed and paid up:

2,850,723 ordinary shares of Tk 10 each issued for cash 28,507,230 28,507,230

10,829,277 ordinary shares (including 7,202,400 bonus shares)of Tk 10 each issued for consideration other than cash 108,292,770 108,292,770

136,800,000 136,800,000

The shares are listed both in the Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited andquoted at Tk 652.90 (2009: Tk 528.30) and Tk 666.10 (2009: Tk 522.90) per share at 31 December 2010respectively.

Percentage of shareholdings:2010 2009

% Taka % Taka

Baffin (Netherlands) B.V 70.00 95,760,000 70.00 95,760,000 International Finance Corporation 0.03 36,400 0.03 42,400 Other non-resident shareholders 7.53 10,307,200 9.79 13,390,800 Local shareholders 22.44 30,696,400 20.18 27,606,800

100.00 136,800,000 100.00 136,800,000Classification of shareholders by range:

Shareholders’ range Number of holders Number of shares

2010 2009 2010 2009

Less than 501 shares 6,208 6,152 816,944 804,500

501 to 5,000 shares 595 525 903,106 808,452

5,001 to 10,000 shares 41 35 274,540 253,456

10,001 to 20,000 shares 26 15 349,556 211,796

20,001 to 30,000 shares 13 6 324,554 145,242

30,001 to 40,000 shares 5 6 174,800 217,468

40,001 to 50,000 shares 3 1 140,148 44,660

50,001 to 100,000 shares 1 4 59,752 340,486

100,001 to 1,000,000 shares 4 4 1,060,600 1,277,940

Over 1,000,000 shares 1 1 9,576,000 9,576,0006,897 6,749 13,680,000 13,680,000

13. Reserves and surplusGroup Company2010 2010 2009Taka Taka Taka

Reserve on revaluation of land 60,631,183 60,631,183 60,631,183 Non-distributable special reserve (Note 13.1) 998,620 998,620 998,620 General reserve 48,863,000 48,863,000 48,863,000 Retained earnings (Note 13.2) 1,073,764,996 1,075,165,050 873,194,520

1,184,257,799 1,185,657,853 983,687,32313.1 Non-distributable special reserve

This represents 90% of the cumulative post-tax profit in respect of certain categories of income up to 1992 asdefined and directed by Bangladesh Bank. Since 1993, the requirement for continuing to create such specialreserve is applicable only to the profit on sale of immovable assets such as land, buildings, etc.

13.2 Retained earningsBalance as at 1 January 873,194,520 873,194,520 724,748,075 Profit for the year 542,570,476 543,970,530 449,406,445 Interim dividend (198,360,000) (198,360,000) (157,320,000)Final dividend (143,640,000) (143,640,000) (143,640,000)Balance as at 31 December 1,073,764,996 1,075,165,050 873,194,520

14. Deferred liabilityBalance as at 1 January 131,959,233 131,959,233 127,064,575 Add: Provision made during the year 27,619,124 27,619,124 17,149,366

159,578,357 159,578,357 144,213,941 Less: Paid during the year 11,730,537 11,730,537 12,254,708 Balance as at 31 December 147,847,820 147,847,820 131,959,233

Deferred liability represents provision for staff gratuity up to 31 December 2010.

15. Creditors for goodsPayable to local suppliers 350,954,843 350,954,843 260,583,634 Payable to BSO companies 34,922,526 34,922,526 18,400,992 Payable to other foreign suppliers 6,852,495 6,852,495 -

392,729,864 392,729,864 278,984,626

16. Creditors for expensesPayable to local suppliers 90,884,870 90,884,870 73,648,500 Payable to BSO companies 122,235,211 122,235,211 208,522,967

213,120,081 213,120,081 282,171,467

17. Creditors for other financeWorkers' profit participation fund 39,103,712 39,103,712 33,141,708 Personal accounts of employees and agents 52,811,255 52,811,255 50,156,293 Security and other deposits 18,812,500 18,812,500 15,160,500 Payable to subsidiary company - 1,134,910 19,864,000 Provident fund 7,806,430 7,806,430 6,626,798 Tax deducted at source 32,196,795 32,196,795 38,401,508 Pension fund 1,733,216 1,733,216 1,323,668 VAT deducted at source 4,120,248 4,120,248 2,778,039 Salary and wages payable 10,777,765 10,777,765 4,907,315 Others 12,177,723 12,177,723 1,073,975

179,539,644 180,674,554 173,433,804



18. Accrued expensesProvision for bonus 54,024,097 54,024,097 63,667,769 Provision for utility 3,406,000 3,406,000 3,285,858 Provision for legal & audit fee 1,876,250 1,853,250 2,392,050 Provision for royalty 12,411,756 12,411,756 13,266,156 Joint venture commission 7,721,018 7,721,018 5,423,458 Other accrued liabilities 183,682,079 183,682,079 148,222,289

263,121,200 263,098,200 236,257,580

19. Provision for taxCurrent year 190,005,000 190,000,000 184,000,000 Earlier years (net of advance tax) 289,051,283 289,051,283 270,922,477

479,056,283 479,051,283 454,922,477

19.1 Reconciliation of effective tax rate2010 (Company) 2009 (Company)% Taka % Taka

Profit for the year 543,970,530 449,406,445Total income tax expense 199,000,000 180,286,000 Profit excluding income tax 742,970,530 629,692,445

Factors affecting the tax charge for current period:Income tax using the Company’s domestic tax rate 27.50% 204,316,896 27.50% 173,165,422 Non-deductible expenses 4.79% 35,623,010 4.95% 31,183,028 Income subject to reduced tax rate -3.22% (23,945,637) 0.00% -Tax exempt income -0.20% (1,479,693) -0.23% (1,436,856)Tax incentives -2.74% (20,364,876) -3.22% (20,291,159)Round off adjustment 0.18% 1,333,170 -0.19% (1,173,246)Under/(over) provided in prior year 0.47% 3,517,130 -0.18% (1,161,189)

26.78% 199,000,000 28.63% 180,286,000

20. Revenue

Unit 2010 (Company) 2009 (Company)

Quantity Amount Quantity Amountin '000 '000 Taka in '000 '000 Taka

LocalShoes Pair 28,198 5,386,203 27,197 4,910,705 Hosiery & accessories 205,278 158,116

Export 71,610 72,214 5,663,091 5,141,035

21. Cost of salesGroup Company2010 2010 2009Taka Taka Taka

Stock of finished goods as at 1 January 1,033,285,945 1,033,285,945 1,052,947,539 Add: Cost of goods manufactured (Note 21.1) 3,107,823,481 3,107,823,481 2,587,556,308 Finished goods purchased 627,403,522 627,403,522 630,636,238 Cost of finished goods available for sale 4,768,512,948 4,768,512,948 4,271,140,085 Less: Stock of finished goods as at 31 December 1,151,001,712 1,151,001,712 1,033,285,945

3,617,511,236 3,617,511,236 3,237,854,140

The opening and closing stocks of goods produced are shown below:Figures in '000 pairs

Closing Opening stock stock

Shoes 4,535 4,740

21.1Cost of goods manufactured

Cost of materials consumed (Note 21.1.1) 2,449,795,310 2,449,795,310 1,961,392,914Direct wages 417,177,483 417,177,483 352,101,234 Prime cost 2,866,972,793 2,866,972,793 2,313,494,148

Manufacturing overhead:

Remuneration to employees 104,278,951 104,278,951 114,222,980 Gas, water and electricity 49,562,612 49,562,612 47,776,047Repairs and maintenance (Note 21.1.2) 48,233,481 48,233,481 74,843,881 Insurance 4,290,077 4,290,077 3,875,547Uniform to workers 986,703 986,703 903,246 Health and other welfare expenses 14,373,270 14,373,270 13,818,831 Travelling 7,713,479 7,713,479 5,679,643 Postage 335,313 335,313 384,666 Freight and transport 835,476 835,476 1,695,029 Stationery 1,264,137 1,264,137 1,866,587 Entertainment 3,131,046 3,131,046 2,266,094 Depreciation (Note 4.1) 27,300,975 27,300,975 20,450,664

262,305,520 262,305,520 287,783,215 Cost of production 3,129,278,313 3,129,278,313 2,601,277,363

Difference in work in process:

Work in process as at 1 January 88,710,604 88,710,604 74,989,549 Work in process as at 31 December 110,165,436 110,165,436 88,710,604

(21,454,832) (21,454,832) (13,721,055)Cost of goods manufactured 3,107,823,481 3,107,823,481 2,587,556,308


21.1

.1Co

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mat

eria

lsco

nsum

ed1

Open

ingsto

ckPu

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seCl

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stock

Cons

umpt

ionDe

scrip

tion

Value

C&F

value

Value

Value

Value

Unit

Quan

tity(T

aka)

(USD

)Qu

antity

(Tak

a)Qu

antity

(Tak

a)Qu

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(Tak

a)

Impo

rted:

EVA

resin

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282,

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(Com

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29

23.3 CommissionGroup Company2010 2010 2009Taka Taka Taka

Retail 136,995,018 136,995,018 121,559,616 Wholesale 108,471,485 108,471,485 145,677,736 Export 442,316 442,316 1,854,169

245,908,819 245,908,819 269,091,521

23.4 Royalty on Hush Puppies and Dr. Scholl brands, Global Footwear Services fees and trade mark licence fees ofTk 8,742,991, Tk. 3,668,765, Tk. 34,531,183 and Tk 119,229,427 respectively represent equivalent foreign currencyof USD 122,812, USD 51,535, SGD 660,000 and USD 1,674,806 provided during the year as provision for expenses.

24. Finance income

Interest on:Fixed deposit 7,239,425 7,239,425 4,226,193 Short term deposit 7,306,243 7,304,448 6,159,715 Personal account 12,751 12,751 14,348

14,558,419 14,556,624 10,400,256

25. Finance expenses

Interest on:Overdraft 77,591 77,591 766,401 Personal account 3,678,780 3,678,780 3,154,018

3,756,371 3,756,371 3,920,419

26. Emoluments to directors

Remuneration 14,338,580 14,338,580 14,606,145Bonus 7,963,549 7,963,549 17,465,488Retirement benefit schemes 1,164,396 1,164,396 1,041,880Housing 2,160,000 2,160,000 2,160,000

25,626,525 25,626,525 35,273,513

27. Emoluments to managers

Remuneration 64,447,419 64,447,419 81,312,938 Retirement benefit schemes 13,886,133 13,886,133 10,337,137 Housing 8,371,570 8,371,570 9,713,959

86,705,122 86,705,122 101,364,034

28. Contribution to employees' provident fund and pension fundDuring the year the company contributed the following amounts to the employees' provident fund and pension fund:

Provident fund :Managers 5,544,812 5,407,206 Officers & supervisors 7,693,557 6,833,091 Workers 10,201,660 9,576,576

23,440,029 21,816,873Pension fund 6,454,142 5,227,090

29,894,171 27,043,963


22. Other incomeNotes Group Company

2010 2010 2009Taka Taka Taka

Loss on disposal of property, plant and equipment (443,091) (443,091) (1,436,219)Discount for early payment 18,288,199 18,288,199 8,539,737

17,845,108 17,845,108 7,103,51823. Administration, selling and distribution expenses

Remuneration to employees 377,787,000 377,787,000 360,350,283 Health and other welfare expenses 9,117,336 9,117,336 8,646,380 Travelling expenses 35,788,505 35,788,505 38,975,461 Bank charges 5,701,068 5,696,018 6,551,142 Repairs and maintenance 58,223,022 58,223,022 62,177,793 Stationery 17,956,117 17,897,227 12,286,535 Postage, telegram and telephone 9,313,948 9,313,948 9,595,338 Entertainment expenses 9,946,540 9,946,540 9,977,547 Subscription and donation 7,245,819 7,202,819 6,839,209 Advertisement 20,848,152 20,848,152 20,991,682 Rent, rates and taxes 120,914,081 120,914,081 93,203,114 General charges 23.1 18,947,901 18,947,901 23,040,859 Directors' fees 68,000 68,000 68,000 Auditors' fees 506,000 483,000 418,000 Legal and other professional fees 23.2 4,590,321 4,001,596 5,128,947 Insurance 1,921,908 1,921,908 2,454,104 Land revenue 431,678 431,678 431,678 Freight and transport 45,791,411 45,791,411 44,568,980 Packing expenses 56,368,804 56,368,804 56,997,081 Commission 23.3 245,908,819 245,908,819 269,091,521 Royalty on Hush Puppies brand 23.4 8,742,991 8,742,991 8,655,078 Royalty on Dr. Scholl brand 23.4 3,668,765 3,668,765 2,477,165 Global Footwear Services fees 23.4 34,531,183 34,531,183 32,174,700 Electricity 32,047,657 32,047,657 31,625,199 Trade mark licence fees 23.4 119,229,427 119,229,427 107,215,954 IT fees 6,281,520 6,281,520 6,504,322 Depreciation 4.1 41,646,658 40,966,371 33,752,875

1,293,524,631 1,292,125,679 1,254,198,94723.1 General charges

General charges represent security services, samples, bad debts, etc.

Bad debts represent the following:Provision for doubtful debt made 1,742,290 1,742,290 2,571,501Provision for doubtful debts reversed (1,203,063) (1,203,063) (1,638,903)Bad debts previously written-off recovered - - (126,136)

539,227 539,227 806,462 23.2 Legal and other professional fees

Legal and other professional fees include fees of Tk 1,113,500 (2009: Tk 3,956,813) of the statutory audit firm inconnection with global reporting, tax certification and services regarding assessments/appeals and advisory services.There was no legal and other professional fees in relation to BB Export Ltd.


29. Profit before tax (company)

Profit before tax Tk. 742,970,530 (2009: Tk. 629,692,445) includes profit amounting to Tk 440,335,635(2009 : Tk 357,346,048) of leather shoe factory and tannery at Dhamrai and Tk. 302,634,895 (2009: Tk. 272,346,397)at Tongi.

30. Remittance of foreign currency

Amount Amountin foreign in local

Name of party Nature of transaction Currency currency currencyTaka

Baffin (Netherlands) B.V. Dividend USD 3,059,352 215,459,999

SSL International PLC Royalty on Dr. Scholl Brand GBP 37,616 4,149,970

Global Footwear Services Footwear services fees SGD 594,000 30,472,200 Pte. Ltd., Singapore

Wolverine World Royalty on Hush Puppies Brand USD 112,000 7,789,570 Wide Inc., USA

Bata Brands S.a.r.l - Swiss Branch Trade Mark Licence Fees USD 2,662,060 186,387,098

Euro Footwear Holdings S.a.r.l IT Fees EUR 51,000 5,069,400

The figures represent net of tax.

31. Earnings in foreign currency

C&F valueUSD Taka

Export of finished leather and shoes 1,038,493 71,609,876

32. Earnings per share

32.1 Basic earnings per share (EPS)Group Company2010 2010 2009Taka Taka Taka

The computation of EPS is given below:

Earnings attributable to the ordinary shareholders (net profit after tax) 542,568,373 543,970,530 449,406,445Weighted average number of ordinary shares outstanding during the year 13,680,000 13,680,000 13,680,000Basic earnings per share (EPS) 39.66 39.76 32.85

32.2 Diluted earning per shareNo 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 employeesThe number of employees for the whole year or part thereof who received a total remuneration of Tk 36,000 and abovewas 1,460 (2009: 1,510).

34. Financial risk managementThe management has overall responsibility for the establishment and oversight of the group's risk managementframework. The group's risk management policies are established to identify and analyse the risks faced by the group, toset 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 group's activities. This notepresents information about the group's exposure to each of the following risks, the group's objectives, policies andprocesses for measuring and managing risk, and the group's management of capital. The company has exposure to thefollowing risks from its use of financial instruments.

u Credit risku Liquidity risku Market risk

34.1 Credit riskCredit risk is the risk of a financial loss to the group if a customer or counterparty to a financial instrument fails to meet itscontractual obligations, and arises principally from the group's receivables from dealers, institutional and export customers etc.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 profileetc. Accounts receivable are mainly related to sale of shoes, hosiery, accessories and finished leather etc. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the statement offinancial position.

a) Exposure to credit riskThe carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit riskat the reporting date was:


Trade Receivable Export customers - Non BSO companies 10,754,687 10,754,687 8,659,308 Receivables from depots 103,491,137 103,491,137 58,596,776 Receivables from institutional sale 16,633,585 16,633,585 31,399,966

130,879,409 130,879,409 98,656,050

Receivable from Agents and employees - - 870,280 Others Receivable 1,134,614 1,134,614 2,331,876 Security and other deposits 148,957,098 148,957,098 123,327,401 Cash and cash equivalents 172,640,520 172,517,113 352,067,178

453,611,641 453,488,234 577,252,785

The maximum exposure to credit risk for accounts receivable as at 31 December by geographic regions was:

Domestic 122,983,071 122,983,071 93,848,051 Asia 7,089,090 7,089,090 3,508,308 Africa 807,248 807,248 1,299,691

130,879,409 130,879,409 98,656,050

46 47



b) Ageing of receivables

The ageing of gross accounts receivables as at 31 December was:Accounts receivable were aged as below:

Export customers - Non BSO companiesInvoiced 0-30 days 10,514,732 10,514,732 7,321,030 Invoiced 31-60 days 239,955 239,955 1,338,278

10,754,687 10,754,687 8,659,308

Receivables from depotsInvoiced 0-30 days 69,134,392 69,134,392 57,826,184 Invoiced 31-60 days 27,377,637 27,377,637 249,936 Invoiced 61-90 days 6,983,109 6,983,109 - Invoiced 91-365 days - - 520,656 Invoiced over 365 days 18,008,000 18,008,000 16,467,870

121,503,138 121,503,138 75,064,646

Receivables from institutional saleInvoiced 0-30 days 12,408,205 12,408,205 10,433,781 Invoiced 31-60 days 2,444,751 2,444,751 9,114,064 Invoiced 61-90 days 45,091 45,091 8,097,950 Invoiced 91-365 days 1,933,698 1,933,698 3,633,951 Invoiced over 365 days - - 120,220

16,831,745 16,831,745 31,399,966

c) Impairment losses

Impairment losses on the above receivables were recognised as per the group policy mentioned in note 3.3.1.1.Quantitative disclosure for such impairment losses are as below:

Receivables from depots

Accounts receivable 121,503,138 121,503,138 75,064,646 Provision for doubtful debts (Note 9.4) (18,012,000) (18,012,000) (16,467,870)

103,491,137 103,491,137 58,596,776 Receivables from institutional sale

Accounts receivable 16,831,745 16,831,745 31,399,966 Provision for doubtful debts (Note 9.4) (198,160) (198,160) -

16,633,585 16,633,585 31,399,966 Other Receivables

Receivable from Agents and employees 17,713,088 17,713,088 20,577,126 Less: Provision against advances to agents and employees (Note 9.4) 17,713,088 17,713,088 19,706,846

- - 870,280

48 49

34.2

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risk

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:

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34.3 Market riskMarket risk is the risk that any change in market prices, such as foreign exchange rates and interest rates will affect the group'sincome or the value of its holdings of financial instruments. The objective of market risk management is to manage and controlmarket risk exposures within acceptable parameters.

a) Currency risk/foreign exchange rate riskThe group 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 group maintainsUSD bank account where all receipts are deposited and all corresponding payments are made.

i) Exposure to currency riskThe group's exposure to foreign currency risk was as follows based on notional amounts:

As at 31 December 2010 (Group As at 31 December 2009 (Company)USD SGD EUR USD SGD EUR

Foreign currency denominated assetsAccounts receivable 152,387 - - 126,765 - - Cash at bank

Islami Bank Bangladesh Limited 48,100 - - 73,400 - -Eastern Bank Limited 290,556 - - 131,881 - -Dutch-Bangla Bank Limited - - - 1,936 - -HSBC 60,950 - - 37,550 - -

551,993 - - 371,532 - -

Foreign currency denominated liabilitiesTrade and other payables for expenses (97,095) (165,000) (60,000) - (330,000) (60,000)

(97,095) (165,000) (60,000) - (330,000) (60,000)Net exposure 454,898 (165,000) (60,000) 371,532 (330,000) (60,000)

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

Exposure to currency risk as at 31 December 2010 in respect of the separate financial statements does not vary from above. Theparent has a foreign exchange loss amounting to Tk. 24,598 during the year ended 31 December 2010.

The following significant exchange rates are applied during the year:

Exchange rate as at 31 Dec 2010 31 Dec 2009

Taka Taka

US Dollar 70.58 69.65Singapore Dollar 55.03 49.15EURO (EUR) 94.33 98.60

ii) Foreign exchange rate sensitivity analysis for foreign currency expendituresA strengthening or weakening of the Taka, as indicated below, against the USD, SGD and EUR at 31 December would haveincreased/(decreased) equity and profit or loss by the amounts shown below. This analysis is based on foreign currency exchangerate variances that the Group considered to be reasonably possible at the reporting date. The analysis assumes that all othervariables, in particular interest rates, remain constant. The analysis is performed on the same basis for 2009, albeit that thereasonably possible foreign exchange rate variances were different, as indicated below:

Strengthening Weakeningprofit or loss profit or loss

Taka TakaAt 31 December 2010USD (3 percent movement) (963,133) 963,133 SGD (3 percent movement) 272,399 (272,399)EUR (3 percent movement) 169,794 (169,794)

At 31 December 2009USD (3 percent movement) (776,316) 776,316 SGD (3 percent movement) 486,585 (486,585)EUR (3 percent movement) 177,480 (177,480)

50 51

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b) Interest rate riskThe only interest bearing financial instrument for the company is the short term deposit (STD) account maintained by the companywith its commercial banks. These are highly liquid and very short term deposits with nominal interest rate. Interest rate fluctuationfor such investment have little impact on financial statements. Therefore, interest rate risk for the company is insignificant.

c) Accounting classification and fair valuesFair value of financial assets and liabilities together with carrying amount shown in the statement of financial position are asfollows:

2010 (Group) 2009 (Company)Carrying amount Fair value Carrying amount Fair value

Taka Taka Taka Taka

Loans and receivablesTrade receivable, net 130,879,409 130,879,409 98,656,050 98,656,050 Receivable from agents and employees - - 870,280 870,280 Other receivables 1,134,614 1,134,614 2,331,876 2,331,876 Cash and cash equivalents 172,640,520 172,640,520 352,067,178 352,067,178

Available for sale financial assetsSecurity deposits 148,957,098 148,957,098 123,327,401 123,327,401

Liabilities carried at amortised costsCreditors for goods 392,729,864 392,729,864 278,984,626 278,984,626 Creditors for expenses 476,218,281 476,218,281 518,429,047 518,429,047 Creditors for other finance 179,539,645 179,539,645 153,569,804 153,569,804

*Accounting classification and fair values as at 31 December 2010 in respect of the separate financial statements does not varysignificantly from the consolidated one.

Creditors for other finance 179,539,645 179,539,645 153,569,804 153,569,804

35. Segment reporting The Company has two operating segments, Domestic and Export, which are the company's strategic divisions. They are managedseparately because they require different technology and marketing strategies. For each of the strategic divisions, the company'smanagement 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 as well as finished leather in domestic market.

2010 2009Particulars Reportable business segment

Domestic Unallocated Total TotalTaka ‘000 Taka ‘000 Taka ‘000 Taka ‘000

Revenue 5,591,481 71,609 5,663,090 5,141,035 Cost of sales 3,594,725 22,786 3,617,511 3,237,854 Gross profit 1,996,756 48,823 2,045,579 1,903,181 Exchange gain/(loss) - (25) (25) 269 Other income - 17,845 17,845 7,103 Administrative, selling and distribution expenses (892,969) (399,157) (1,292,126) (1,254,199)

Reportable segment result 1,103,788 (332,514) 771,274 656,354

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

36. Related party disclosures

During the year ended 31 December 2010, group entered into a number of transactions with related parties in the normal courseof business. The names of the related parties, nature of these transactions and amount thereof have been set out below inaccordance with the provisions of BAS 24: Related Party Disclosures.

36.1 Related party transactions

Nature of Nature of Group CompanyName of the party relationship transaction 2010 2010 2009

Taka Taka Taka

Bata, Singapore Group company Purchase (186,990) (186,990) (257,819)Service received (1,205) (1,205) (555)

Bata, Czech Group company Service received - - (105)

Bata, Zambia Group company Service received 8,926 8,926 -

Bata, Sri Lanka Group company Sales 164 164 1,362

Bata (Malaysia) Berhad Group company Service received (133) (133) (163)Service provided 16

Bata, Thailand Group company Purchase (1,554) (1,554) (867)Service received - - (14)

P.T. Sepatu Bata, Group company Purchase (3,641) (3,641) (1,019)Jakarta Service received (67) (67) (139)

Global Footwear Service Group company Service received (34,531) (34,531) (32,136)Pte. Ltd., Singapore

Bata Brand S.a.r.l., Group company Trade mark (119,229) (119,229) (107,216)Luxembourg licence fees

Compass S.P.A, Italy Group company Service received - - 33

Bata, Kenya Group company Service received 3,915 3,915 -

Euro Footwear Group company Service received (6,282) (6,282) (6,573)Holdings s.a.r.l.

Bata, India Group company Purchase (16,331) (16,331) -

Bata, Netherland Group company Purchase (1,433) (1,433) -

Bata, Uganda Group company Sales 2,087 2,087 -

BB Export Limited Subsidiary company Subscription of shares - - 19,970 Payment for subscription 18,729 18,729 106 of shares

Key management Directors Salary and other (25,627) (25,627) (35,274)employees benefits

Key employees -do- (86,705) (86,705) (101,364)

52 53


36.2 Receivables/(payables) with related parties

Nature of Nature of Group CompanyName of the party relationship transaction 2010 2010 2009

Taka Taka Taka

Bata, Singapore Group company Purchase (33,814) (33,814) (17,165)Service received (55) (55) (382)

Bata (Malaysia) Berhad Group company Service received (133) (133)

Bata, Thailand Group company Purchase (1,108) (1,108)

P.T. Sepatu Bata, Group company Purchase - - (375)Jakarta Service received - - (139)

Global Footwear Service Group company Service received (9,080) (9,080) (16,220)Pte. Ltd., Singapore

Bata Brand S.a.r.l., Group company Trade mark (119,229) (119,229) (207,097)Luxembourg licence fees

Euro Footwear Group company Service received (6,289) (6,289) (6,573)Holdings s.a.r.l.

Bata, India Group company Purchase 12 12 -

BB Export Limited Subsidiary company Subscription of shares - 1,135 19,864

37. Capital expenditure and financial commitmentThere were no capital expenditure and financial commitments as at 31 December 2010 (2009: Nil)

38. Contingent liabilitiesThere are contingent liabilities on account of unresolved disputed corporate tax assessments and VAT claims by theauthority aggregating to Tk. 247,000,000 (2009: Tk 285,367,000). Considering the merits of the cases, it has not beendeemed necessary to make provisions for all such disputed claims.

There is also contingent liability in respect of outstanding letters of credit of Tk. 260 million and letter of guarantee of Tk. 4.1million.

39. Other disclosures

39.1 Comparatives Previous year's figures have been rearranged, wherever necessary, to conform to current year's presentation to the notes 4, 9,22, 23.

39.2 Interim dividend Bata paid an interim dividend @ Tk 14.50 per share of Tk 10 each aggregating to Tk 198,360,000 which was approved bythe Board of Directors at its 201st meeting held on 11 November 2010.

39.3 Events after the reporting period The Board of Directors of Bata, at its 202nd meeting held on 21 April 2011, proposed Tk 10.50 per share, amounting to atotal of Tk 143,640,000 as final dividend for the year ended 31 December 2010, which represents 105% of the paid upcapital. Total dividend for the year ended 31 December 2010 including the interim dividend (see note 39.2) thus comes toTk 342,000,000, which is 250% of paid up capital. These dividends are subject to final approval by the shareholders at theforthcoming Annual General Meeting of the company.

54 55

Bata Shoe Company (Bangladesh) LimitedStatement of Comprehensive Income for the year ended 31 December 2010

Exhibit - I

2010 2009Manufacturing Trading Total Total

Taka Taka Taka Taka

Revenue 5,104,921,715 558,168,679 5,663,090,394 5,141,034,678 Cost of goods sold (3,282,291,966) (335,219,270) (3,617,511,236) (3,237,854,140)Gross profit 1,822,629,749 222,949,409 2,045,579,158 1,903,180,538 Other income 17,845,108 - 17,845,108 7,103,518 Administration, selling anddistribution expenses (1,151,295,804) (140,829,875) (1,292,125,679) (1,254,198,947)Profit from operating activities 689,179,053 82,119,534 771,298,587 656,085,109 Finance income 12,948,168 1,583,858 14,532,026 10,669,463 Finance expenses (3,346,961) (409,410) (3,756,371) (3,920,419)Profit before contribution to WPPF 698,780,260 83,293,982 782,074,242 662,834,153 Contribution to WPPF (34,939,013) (4,164,699) (39,103,712) (33,141,708)Profit before tax 663,841,247 79,129,283 742,970,530 629,692,445 Tax expense:

Current tax 179,134,186 10,865,814 190,000,000 184,000,000Deferred tax 9,000,000 - 9,000,000 (3,714,000)

188,134,186 10,865,814 199,000,000 180,286,000 Profit after tax for the year 475,707,061 68,263,469 543,970,530 449,406,445

ANNUAL REPORT 201056 57

BB EXPORT LTD.DIRECTORS’ REPORT

BB Export Ltd is a private Limited Company incorporated in 2009 and is a fully owned subsidiary of Bata Shoe Company(Bangladesh) Limited.

Since there is a great potential for export of leather and leather footwear to both Bata Shoe Organisation (BSO) and nonBSO Companies in the world and to streamline the manufacturing operation, Bata Shoe Company (Bangladesh) Limitedestablished this 100% export oriented company in the name of BB Export Ltd.

Key Financial Results for the year 31 December 2010 is not available as the company has not yet started operations.

On behalf of the Board

Muhammad QayyumManaging Director


BB Export Ltd.Satetement of Financial Positon as at 31 December 2010

TakaSource of funds

Shareholders' funds:Share capital 18,835,090Retained earnings (1,402,157)

Total 17,432,933

Application of funds

Property, plant and equipmentAt cost 18,017,634Less: Accumulated depreciation 680,287

17,337,347

Current assets:Advances, deposits and prepayments 179Cash and cash equivalents 123,407

123,586

Current liabilities and provisions: Creditors for expenses 23,000Provision for tax 5,000

28,000

Net current assets 95,586 Total 17,432,933


Yee Siew NG Md. Hashim RezaDirector Director



Independent Auditors’ Reportto Board of Directors of BB Export Ltd.

IntroductionWe have audited the accompanying financial statements of BB Export Ltd. which comprise the statement of financialposition as at 31 December 2010, and the statement of comprehensive income, statement of changes in equity andstatement of cash flows for the period from 19 November 2009 to 31 December 2010, and notes, comprising a summary ofsignificant accounting policies and other explanatory information.

Management's responsibility for the financial statementsManagement is responsible for the preparation and fair presentation of these financial statements in accordance withBangladesh Financial Reporting Standards (BFRS), the Companies Act 1994 and other applicable laws and regulations,and for such internal control as management determines is necessary to enable the preparation of financial statements thatare free from material misstatement, whether due to fraud or error.

Auditors' responsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit inaccordance with Bangladesh Standards on Auditing (BSA). Those standards require that we comply with relevant ethicalrequirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free frommaterial misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financialstatements. The procedures selected depend on our judgement, including the assessment of the risks of materialmisstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we considerinternal control relevant to the entity's preparation and fair presentation of the financial statements in order to design auditprocedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectivenessof the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of accounting estimates made by management, as well as evaluating the overall presentation of thefinancial statements.

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

OpinionIn our opinion, the financial statements give a true and fair view of the financial position as at 31 December 2010 and of itsfinancial performance and its cash flows for the year then ended in accordance with Bangladesh Financial ReportingStandards, the Companies Act 1994 and other applicable laws and regulations.

We also report that:a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary

for the purposes 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 in so far as it appeared

from our examination of these books; andc) the statement of financial position and statement of comprehensive income dealt with by the report are in agreement

with the books of account and returns.


RahmanRahmanHuqCharteredAccountants9MohakhaliC/A(11th&12thFloors)Dhaka1212Bangladesh

Telephone+880(2)9886450-2Fax +880(2)9886449Email [email protected] www.rahman-rahman-huq.com


BB Export Ltd.Statement of Changes in Equity for the period from 19 November 2009 to 31 December 2010

Share RetainedParticulars capital earnings Total

Taka Taka Taka

Balance as at 19 November 2009 - - -

Share capital 18,835,090 - 18,835,090

Profit/(loss) for the period - (1,402,157) (1,402,157)

Other comprehensive income/(loss) - - -

Balance as at 31 December 2010 18,835,090 (1,402,157) 17,432,933

BB Export Ltd.Statement of Comprehensive Income for the period from 19 November 2009 to 31 December 2010

TakaRevenue -

Cost of sales -

Gross profit -

Administration, selling and distribution expenses (1,398,952)

Profit/(loss) from operating activities (1,398,952)

Finance income 1,795

Profit/(loss) before tax (1,397,157)

Income tax expense (5,000)

Profit/(loss) after tax for the period (1,402,157)

Other comprehensive income/(loss) -

Total comprehensive income/(loss) for the period (1,402,157)


Yee Siew NG Md. Hashim RezaDirector Director




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Cash flows from operating activitiesCash paid against various expenses (695,665)Advance income tax paid (179)Interest received 1,795 Net cash from operating activities (694,049)

Cash flows from investing activitiesAcquisition of property, plant and equipment (18,017,634)Net cash used in investing activities (18,017,634)

Cash flows from financing activitiesPaid-up share capital 18,835,090 Net cash from financing activities 18,835,090

Net cash increase/(decrease) in cash and cash equivalents 123,407

Cash and cash equivalents at the beginning of the period -

Cash and cash equivalents at the end of the period (Note 8) 123,407

BB Export Ltd. Statement of Cash Flows for the period from 19 November 2009 to 31 December 2010

62

ANNUAL REPORT 2010

Form of ProxyPlease Quote

Shareholder's Folio / BO No. No. of Shares held

ATTENDANCE

I/We hereby record my/our presence at the 39th Annual General Meeting of Bata Shoe Company(Bangladesh) Limited at Dhamrai Factory, Dhaka on Thursday 23 June, 2011 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.

I/We

of

being shareholder(s) BATA SHOE COMPANY (BANGLADESH) LIMITED, entitled to vote hereby appointMr./Ms.as my/our proxy to attend and vote for me/us and on my/our behalf at the 39th Annual General Meeting of theCompany to be held on Thursday 23 June, 2011 and adjournment thereof and the poll that may be taken inconsequence thereof.

As witness my/our hand this day of 2011

Signature of Shareholder (s) Signature of Proxy

Date Signature of Witness

Revenue Stampof Tk. 10.00

(Signature of Shareholder (s) must be in accordance with specimen signature with the Company.)

Documents

Bata Anual Report