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Contents2 BOARD OF DIRECTORS
4 COMPANY INFORMATION
6 NOTICE OF MEETING
7 PRODUCT DEVELOPMENT & MERCHANDISING
8 MARKETING OPERATIONS
9 MANUFACTURING
10 HUMAN RESOURCES
12 CHAIRMAN'S STATEMENT
16 DIRECTORS' REPORT
21 AUDITORS' REPORT
22 BALANCE SHEET
23 PROFIT AND LOSS ACCOUNT
24 CHANGES IN EQUITY
24 CASH FLOW STATEMENT
25 NOTES TO THE ACCOUNTS
ANNUAL REPORT
2009
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Board of Directors
2 3
Mr. 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
Mr. 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
Mr. Rajeev GopalakrishnanVice Chairman & Managing
Director(Appointed on 28 January 2010)
Previous positionsManaging Director, Bata Shoe of Thailand
Public Company Limited Vice President, Retail Operations, Bata
India LimitedVice President, Wholesale Operations, Bata India
LimitedSales / Marketing Manager, Bata Limited, CanadaRetail
Manager, Bata India Limited
Mr. Rokanuddin Mahmud Bar-at-lawIndependent Director
Senior Advocate in the Supreme Court and High Court in
Bangladesh
Mr. Mike MiddletonDirector
Current PositionCFO, Global Footwear Services Limited,
Singapore
Previous positionsDeputy Managing Director & Finance
Director, Bata India Ltd.
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Company SecretaryMd. Hashim Reza
AuditorsRahman Rahman HuqChartered Accountants9, Mohakhali C/A
(11th Floor)Dhaka-1212
Legal AdvisersB. Ahmed & Co.Syed Ishtiaq Ahmed &
AssociatesMalik Law Associates
BankersEastern Bank Ltd.Dutch Bangla Bank Ltd.HSBCIslami Bank
(Bangladesh) Ltd.Standard CharteredAgrani 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
Compnay InformationTJJjLr fgq
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2009 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
6 7
North Star is a sports-casual footwear brand for the youth
market. Its collectionsare inspired by world trends and young
peoples versatility; developingfashionable commercial products. The
qualities that identify this brand is 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 theirmost curious years. Children who are
more than willing to pick up, to try and toventure into the world
of trial and error, B.First challenges and inspires thesestudents
to outdo themselves.
In a day, I sit, stand, walk, run, chase, follow, play, study...
and Id most likely needa pair of sturdy-soled, sporty, & padded
shoes to see me through it all! That is ourB First branded shoe for
all children out there who go to school & love to be instudy
& play all day.
Created in France, Marie Claire, epitomises Parisienne style
andsophistication. As a brand,Marie Clarie encompasses what it is
liketo be 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 thats nurturing and protective,
BataComfit exudes certain warmth that only a mother can contest
to.Unconditionally giving to provide tender loving care, moving
with youevery step of the way, Bata Comfit as a brand embraces its
imageas your loyal safe keeper.
Notice is hereby given that the 38TH ANNUAL GENERAL MEETING of
Bata Shoe Co. (Bangladesh) Limitedwill be held at Dhamrai Factory,
Dhaka on 24 June 2010, Thursday at 10:30 a.m. to transact the
followingbusiness:1. To receive, consider and adopt the Directors
Report for the year ended 31 December 2009.
2. To receive, consider and adopt the audited accounts of the
Company and the Auditors Report thereonfor the year ended 31
December 2009.
3. To declare Dividend as recommended by the Directors.
4. To elect Directors.
5. To appoint Auditors for the year 2010 and fix their
remuneration.
By order of the Board
Md. Hashim RezaTongi, 20 April 2010 Company Secretary
NOTES:1. 11 May 2010 is the RECORD DATE. Shareholders whose
names will appear in the share register of the
Company or in the depository register on that date will be
eligible to receive dividend as approved in theAGM.
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
Companys Registered Office at least 48 (forty-eight) hours before
the appointed time for the Meeting.
4. A Proxy Form is enclosed.
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Bata Industrials
Manufacturing
Non Retail
8 9
Non Retail business played a vital role in the companys total
turnover in 2009. Thisbusiness channel includes 5 different
divisions namely Dealers Support Program(DSP), Wholesalers, Rural
Sales, Department Stores and Industrial & Institutions.The
Company discontinued business with low volume dealers and focused
on thehigh contribution dealers to minimize business risks and
operating expenses. Inaddition, emphasis was given to open new
dealers. Around 66 new dealers wereopened last year which
contributed around Tk. 74 million in turnover. Currently,
thecompany has 512 DSPs and 364 wholesalers running under a sound
meaningfulbusiness policy focused on development of good
relationship.
For retaining market leadership, the companyfocuses on
appropriate show design and productdevelopment, to meet the needs
of the market. Incommunication with partners, the company
organizeda national Road Show of new products and
receivedsuggestions from customers to develop the rightproducts and
services.
The company has established a new business channelunder brand
Bata Industrials to serve the industrial growth.In January 2009,
the company launched Bata Industrialsshoes and received very
encouraging feedback fromdifferent industrial groups who focus on
quality and safetysuch as petrochemicals, food Industries,
machineries,automobile parts, electrical equipments etc. It is
anticipatedthat this new business will add approximately Tk. 5
million ofturnover in 2009.
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 5million square feet of leather
annually. In 2009 company produced over 26 million pairs. Currently
companycontinues producing quality & fashionable shoes to
respond to customers demand.
Marketing OperationsRetail
Power is the sports & athletic- leisure shoe brand of Bata
it hasgot products that has been specially designed for activity
likerunning, training, outdoor, soccer & lifestyle. No other
sports brandcan give you the value for money like Power. These
shoes helpyou to perform comfortably any particular outdoor
activity.
In 2009 our Retail Channel sold 8.6 million pairs of shoes 104%
growth against2008 and turnover Tk. 3.2 billion which is 114%
growth against last year. To achievethis outstanding growth in
spite of global recession, company took differentinitiatives like
product innovation, aggressive marketing programmes,
marketexpansion, human resource development, operational
efficiency, team work etc.
In expansion program, company opened 23 new stores including the
largest Batashoe store in Asia (11,000 sq ft) at Bashundhara City
Mall, Dhaka and 3 exclusiveHush Puppies stores. In addition we
renovated 29 potential stores in 2009. Thenew stores generated
additional turnover of Tk. 252 million. 250 new lines
wereintroduced before the biggest festival Eid-ul-Fitre, which
created sensation amongour valued customers.
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Human Resources
10 11
TEAM BUILDING WORKSHOP
As a part of Team Building activities, Bata Shoe
Company(Bangladesh) Ltd. and the International Labor
Organization(ILO) organized a day long Team Building Workshop
onNovember 07, 2009. Resource persons from Sri Lanka andBangladesh
conducted the workshop where 25 managers ofBata Bangladesh
participated. The main objective of theworkshop was to bring
synergy between the departments toachieve accelerated business
goals by identifyingmeasurable business targets.
FIRE FIGHTING TRAINING PROGRAMME
To create awareness about fire accidents, the companyorganizes
comprehensive training on fire fighting on aregular basis. The
course covers fire fighting methods,evacuation procedures,
introduction to fire fightingequipments and physical
demonstration.
STOREMANCO
With a view to improve management and operational skills ofStore
Managers, a number of STOREMANCO have beenorganized in 2009. The
course covers - Duties &Responsibilities of Store Managers,
Product Knowledge,Marketing, Distribution & Customers Claim,
Books ofAccounts, Remittance, Store Audit, Effective Utilization
ofPoint of Sales (POS), Staff Productivity Analysis, StoreProfile
and Customer Service.
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Dream" and several brand promotions for "North Star","Marie
Claire, "Power", "Bengali New Year (Boishakhi)"promotion, "Be
Surprised", "Monsoon", "Eid-ul-Fitre""Puja". We have also continued
to sponsor theBangladesh National Cricket team as their
OfficialClothing sponsor and the nationwide Bata SchoolHandball
Tournament for boys and girls.
To strengthen the quality of products your company alsoorganised
a quality contest among the departments for4 weeks. The contest
aimed at improving qualityawareness, reducing product cost,
achieving productiontargets, ensuring timely delivery, promoting
quality as aculture and developing the habit of working as a
team.To motivate the employees and associates each winingteam
received prizes from the company.
Your company has contributed Tk. 1,195 million to thecountrys
National Exchequer for the year 2009 which is8% more than the
previous year. Your companycontinues to be highest tax payer in
leather andfootwear sector in the country as in previous years.
During 2009 your company was awarded theSuperbrand Award,
popularly known as the Oscar ofBranding from Bangla Superbrands
Limited.Superbrands is acclaimed as a highly reputedinternational
authority on branding since its launch in1994 in United Kingdom. It
is an independentorganization that promotes the discipline of
brandingacross the globe. Bata being a global brand, has alsowon
Superbrand awards in Chile, Czech Republic &India. Winning the
Superbrand award proves Bata'sexcellence in all aspects of branding
(Production,Distribution, Communication, Retailing,
CustomerAcceptance etc.).
Bata Bangladesh participated in the Global Dog ArtCompetition
organised by Hush Puppies International inMichigan, U.S.A.
recently. Out of 74 contestants theentries from your company won
the 1st place (Best inshow) award along with two other awards.
Yourcompany also received an award for Best MultinationalCompany in
2008.
Under the Corporate Social Responsibilities (CSR)programme your
company provided shoes to the poorstudents of Shishu Polli Plus,
(translated as ChildrensVillage Plus) a non-religious,
non-political organization
xnJkKfr nJwe Chairman's Statement
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 DirectorsReport together
with the Annual Accounts and AuditorsReport thereon, for the year
ended 31 December 2009.
In the face of the challenges posed by the globaleconomic
recession the growth in the country wassignificantly affected in
2009. As a result consumersconcentrated more on essential
consumable itemsinstead of footwear. Moreover electricity
shortagethroughout the country has interrupted our productionand it
was also difficult to keep our outlets openthroughout the business
hours.
Despite these adverse conditions, your company,however,
continued to achieve commendable growthduring 2009. During the year
your company achievedtotal profit before tax of Tk.630 million, an
increase ofTk. 10 million against 2008. In 2009 your
companyachieved a turnover of Tk. 4,995 million representinggrowth
of 8 % against 2008.
We have continued to expand our market shareespecially in the
medium to upper end of the market.During the year we opened three
outlets of the worldfamous shoe brand Hush Puppies. We have 257
retailoutlets which are strategically located in different partsof
the country. In addition to the retail chain we have aformidable
network of dealer outlets. We opened 66dealer stores in 2009. We
now have near to 1,000dealer outlets serviced by 13 depots
throughoutBangladesh.
During the year we organised various promotionalactivities like
"Back to School", "B.first Colour Your
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based in Sreepur and to under privilege children at theAnnual
Street Childrens Party, organized by the BWA(British Womens
Association).
During the year your company trained 555 employeesvia 32
domestic training courses and 10 employeesattended 7 overseas
training programmes. We havecontinued to award Employee of the
Month certificatesand provide recognition to bolster the spirits of
theworkforce in the factories.
In 2009 your company presented awards to 62employees who have
completed 25 years of service inthis company. Jorge Carbajal,
President Bata EmergingMarket attended the ceremony and praised all
theaward recipients for their loyalty and hard work. He alsothanked
everyone for their valuable contribution to Bata.
Your companys share, with a face value of Tk. 10 eachwas traded
at Tk. 528.30 on the Dhaka Stock ExchangeLtd. and Tk. 522.90 on the
Chittagong Stock ExchangeLtd. respectively on 30 December 2009.
Your Board continues its intention to recommend thepayment of
dividends commensurate with themaintenance of a stable financial
position of thecompany. The Board has, therefore, proposed
forapproval at the Annual General Meeting the payment ofa final
dividend of Tk 10.50 per share which, togetherwith an interim
dividend of Tk. 11.50 per share paid on16 November 2009, will make
a total dividend ofTk.22.00 per share for the financial year ended
31December 2009.
In accordance with the Articles of Association of theCompany all
the directors, except the ManagingDirector, Mr. Rajeev
Gopalakrishnan, will retire at theAnnual General Meeting and, being
eligible, offerthemselves for re-election.
In conclusion, on behalf of the Board of Directors, Iwould like
to express our appreciation to you, ourshareholders, as well as to
our valued customers,suppliers, employees and the Government of
thePeoples Republic of Bangladesh for the support andcooperation
extended to the Company.
Fernando Garcia RestrepoChairman20 April 2010
-
Your Directors have pleasure in submitting their Report and
Audited Accounts of the Company for the yearended 31 December 2009
along with the preceding three years below:
FINANCIAL RESULTS 2009 2008 2007 2006TAKA TAKA TAKA TAKA
Net Profit before tax 629,692,445 619,634,702 493,927,273
408,248,059Provision for tax 180,286,000 170,219,000 169,078,000
131,226,000
Net profit after tax 449,406,445 449,415,702 324,849,273
277,022,059
Unappropriated profit, brought forward 724,748,075 575,292,171
571,417,361 499,595,302
Over tax provision transferred forfinalization of assessment
(1981 to 1994) 21,025,537 Undistributed dividend reserved
1,000,202
Profit available for appropriation 1,174,154,520 1,025,708,075
917,292,171 776,617,361
From which the Directors recommended the following
appropriations:
Final dividend paid (previous year) 143,640,000 143,640,000
143,640,000 27,360,000Interim dividend paid (current year)
157,320,000 157,320,000 198,360,000 177,840,000
300,960,000 300,960,000 342,000,000 205,200,000
Unappropriated profit carried forward 873,194,520 724,748,075
575,292,171 571,417,361
DIVIDEND
For the year ended 31 December 2009 the Board of Directors
recommended an interim dividend of Tk. 11.50per share amounting to
Tk 157,320,000 and now recommends a final dividend of Tk.10.50 per
share amountingto Tk. 143,640,000, thus making a total dividend of
Tk. 22.00 per share amounting to Tk. 300,960,000.
DIRECTORS
The Directors retiring as per Article 104 of the Companys
Articles of Association are Mr. Fernando GarciaRestrepo, Mr. Mike
Middleton, Mr. Rashidul Hasan and Mr. Rokanuddin Mahmud and being
eligible offerthemselves 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 companys state of
affairs, the result of its operations, cash flows 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
(BFRS) 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
companys 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 Meeting, Audit Committee Meeting,
Shareholdings and the Compliance report as per
Securities and Exchange Commissions Notification are enclosed
herewith as Annexure-I andAnnexure-II respectively.
On behalf of the Board
Rajeev GopalakrishnanManaging Director
Directors' Report Statutory Information on the Financial
Statements
16 17
-
Annexure - IThe information regarding Board Meetings, Audit
Committee and Shareholding Position of the Company for theyear 2009
are mentioned below in Compliance with Securities and Exchange
Commissions NotificationNo.SEC/CMRRCD/2006-158/Admin/02-08 dated 20
February 2006.
Board MeetingsThe Board met four times during the year 2009. 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 AttendanceMr. Fernando Garcia Restrepo 1
Meeting Mr. Mike Middleton 2 MeetingsMr. Rashidul Hasan 4
MeetingsMr. Rokanuddin Mahmud 1 MeetingMr. J D Hearns 4 Meetings
(retired on 28 January 2010)Mr. Rajeev Gopalakrishnan (appointed on
28 January 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 2009. Except for Mr. FernandoGarcia Restrepo and Mr.
Rokanuddin Mahmud all the members were present in the meeting of
the committee.The Company Secretary was as the Secretary of the
Committee. The Audit Committee comprise of:
Mr. Fernando Garcia Restrepo ChairmanMr. Rajeev Gopalakrishnan
Member (appointed on 28 January 2010)Mr. Mike Middleton Member Mr.
Rashidul Hasan Member as Independent DirectorMr. Rokanuddin Mahmud
Member as Independent DirectorMr. J D Hearns Member (retired on 28
January 2010)
ShareholdingsThe name of the Shareholders along with the
position 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 holds 10% or more. Nil Niliv) Other
Shareholders, who holds less than 10%
u Other Non Resident (Institutions) 1,343,320 9.82u Institutions
(Local) 822,854 6.02u Individuals 1,937,762 14.16
Total 13,680,000 100.00
1.1 Boards 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 II
Status of Compliance with the conditions imposed by the
Securities & Exchange Commissions 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
-
20 21
Auditors' Report to the Shareholders ofBata Shoe Company
(Bangladesh) Limited
We have audited the accompanying balance sheet of Bata Shoe
Company (Bangladesh) Limited as at 31December 2009 and the related
profit and loss account, statement of changes in equity and cash
flow statementfor the year then ended, and a summary of significant
accounting policies and explanatory notes. Thepreparation of these
financial statements is the responsibility of the company's
management. Our responsibilityis to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with Bangladesh Standards
on Auditing (BSA). Those standards requirethat we plan and perform
the audit to obtain reasonable assurance whether the financial
statements are free ofmaterial misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts
anddisclosures in the financial statements. An audit also includes
assessing the accounting principles used andsignificant estimates
made by management, as well as evaluating the overall financial
statement presentation.We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements, prepared in accordance
with Bangladesh Accounting Standards (BAS)and Bangladesh Financial
Reporting Standards (BFRS), give a true and fair view of the state
of the company'saffairs as at 31 December 2009 and of the results
of its operations and its cash flows for the year then endedand
comply with the Companies Act 1994, the Securities and Exchange
Rules 1987 and other applicable lawsand regulations.
We also report that:
(a) we have obtained all the information and explanations which
to the best of our knowledge and beliefwere 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 so far as itappeared from our
examination of those books;
(c) the company's balance sheet and profit and loss account
dealt with by the report are in agreement withthe books of account;
and
(d) the expenditure incurred was for the purposes of the
company's business.
Dhaka, 20 April 2010 Rahman Rahman HuqChartered Accountants
3.1(ii) Constitution of Committee with Boardmember including one
independent Director
3.2(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
-
Bata Shoe Company (Bangladesh) LimitedBalance Sheet as at 31
December 2009
Bata Shoe Company (Bangladesh) LimitedProfit and Loss Account
for the year ended 31 December 2009
22 23
Notes 2009 2008Taka Taka
AssetsProperty, plant and equipment 4 508,297,292 457,967,888
Capital work in progress 5 13,860,671 -Investment in subsidiary 6
19,970,000 -Deferred tax assets 7 16,000,000 12,286,000 Total
non-current assets 558,127,963 470,253,888
Inventories 8 1,433,325,407 1,460,138,433 Accounts receivable 9
100,987,926 79,493,676 Advances, deposits and prepayments 10
278,455,551 210,086,869 Cash and cash equivalents 11 352,067,178
263,407,792 Total current assets 2,164,836,062 2,013,126,770 Total
assets 2,722,964,025 2,483,380,658
EquityShare capital 12 136,800,000 136,800,000 Reserves and
surplus 13 983,687,323 835,240,878 Total equity 1,120,487,323
972,040,878
LiabilitiesDeferred liability 14 131,959,233 127,064,575 Total
non-current liabilities 131,959,233 127,064,575
Creditors for goods 15 278,984,626 387,613,341 Creditors for
expenses 16 518,429,047 353,562,172 Creditors for other finance 17
173,433,804 129,715,417 Provision for tax 18 454,922,477
432,674,318 Unclaimed dividend 44,747,515 80,709,957 Total current
liabilities 1,470,517,469 1,384,275,205 Total liabilities
1,602,476,702 1,511,339,780 Total equity and liabilities
2,722,964,025 2,483,380,658
The annexed notes 1 to 36 form an integral part of these
financial statements.Previous year's figures have been rearranged,
wherever necessary, to conform to current year's presentation.
Rajeev Gopalakrishnan Rashidul Hasan Md. Hashim RezaManaging
Director Director Company Secretary
As per our report of same date.
Dhaka, 20 April 2010 Rahman Rahman HuqChartered Accountants
Rajeev Gopalakrishnan Rashidul Hasan Md. Hashim RezaManaging
Director Director Company Secretary
As per our report of same date.
Dhaka, 20 April 2010 Rahman Rahman HuqChartered Accountants
Notes 2009 2008Taka Taka
Revenue 19 4,995,356,942 4,623,312,077 Cost of goods sold 20
(3,237,854,140) (3,030,618,923)Gross profit 1,757,502,802
1,592,693,154 Other income 21 7,103,518 7,241,407 Administration,
selling and distribution expenses 22 (1,108,521,211)
(951,660,940)Profit from operating activities 656,085,109
648,273,621 Finance income 23 10,669,463 9,016,498 Finance expenses
24 (3,920,419) (5,043,064)Profit before contribution to workers'
profit participation fund 662,834,153 652,247,055 Contribution to
workers' profit participation fund (33,141,708) (32,612,353)Profit
before tax 629,692,445 619,634,702 Tax expense:
Current tax 18 184,000,000 180,000,000 Deferred tax 7
(3,714,000) (9,781,000)
180,286,000 170,219,000 Profit after tax for the year
449,406,445 449,415,702
Basic earnings per share (par value Tk 10) 31 32.85 32.85
Profit after tax from manufacturing and trading has been shown
in attached Exhibit - I.
Previous year's figures have been rearranged, wherever
necessary, to conform to current year's presentation.
The annexed notes 1 to 36 form an integral part of these
financial statements.
-
Bata Shoe Company (Bangladesh) LimitedNotes to the Financial
Statements as at and for the year ended 31 December 2009
24 25
Bata Shoe Company (Bangladesh) LimitedStatement of Changes in
Equity for the year ended 31 December 2009
Reserves and surplusNon-
Reserve on distributable Unappro-Share revaluation special
General priated
Particulars capital of land reserve reserve profit Total
Total
Taka Taka Taka Taka Taka Taka Taka
Balance as at 1 January 2008 136,800,000 60,631,183 998,620
48,863,000 575,292,171 685,784,974 822,584,974 Final dividend of
2007 - - - - (143,640,000) (143,640,000) (143,640,000)Profit for
the year - - - - 449,415,702 449,415,702 449,415,702 Interim
dividend of 2008 - - - - (157,320,000) (157,320,000)
(157,320,000)Unclaimed dividend 1,000,202 1,000,202 1,000,202
Balance as at 31 December 2008 136,800,000 60,631,183 998,620
48,863,000 724,748,075 835,240,878 972,040,878 Final dividend of
2008 - - - - (143,640,000) (143,640,000) (143,640,000)Profit for
the year - - - - 449,406,445 449,406,445 449,406,445 Interim
dividend of 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
Bata Shoe Company (Bangladesh) LimitedCash Flow Statement for
the year ended 31 December 2009
2009 2008Taka Taka
Cash flows from operating activitiesCash receipts from customers
4,975,613,305 5,254,387,256 Cash paid to suppliers and employees
(4,260,313,181) (4,743,663,211)Cash generated from operating
activities 715,300,124 510,724,045 Interest paid (3,920,419)
(5,043,064)Income tax paid (176,623,158) (151,522,192)Net cash from
operating activities 534,756,547 354,158,789
Cash flows from investing activitiesInterest received 10,655,115
8,979,530 Proceed from sales of property, plant and equipment
4,140,332 1,719,912 Acquisition of property, plant and equipment
(123,970,165) (92,122,169)Net cash used in investing activities
(109,174,718) (81,422,727)
Cash flows from financing activitiesRepayment of finance lease -
(226,328)Dividend paid (336,922,443) (309,215,569)Net cash used in
financing activities (336,922,443) (309,441,897)
Net cash increase/(decrease) in cash and cash equivalents
88,659,386 (36,705,835)
Cash and cash equivalents as at 1 January 263,407,792
300,113,627
Cash and cash equivalents as at 31 December (Note 11)
352,067,178 263,407,792
Previous year's figures have been rearranged, wherever
necessary, to conform to current year's presentation.
1. Reporting entityBata Shoe Company (Bangladesh) Limited (the
"company") is a listed company limited by shares and
wasincorporated in Bangladesh in 1972 under the Companies Act 1913.
The address of the registered office of thecompany is Tongi,
Gazipur, Bangladesh. The company is one of the operating companies
of worldwide Bata ShoeOrganization (BSO). The shares in the company
are mostly held by Baffin (Netherlands) B.V. The financial period
ofthe company covers one year from 1 January to 31 December.
The company is mainly engaged in manufacturing and marketing of
leather, rubber, plastic, canvas footwear, hosieryand accessories
items as well as finished leather. Manufacturing plants of the
company are situated at Tongi andDhamrai.
2. Basis of preparation
2.1 Statement of complianceThese financial statements have been
prepared in accordance with Bangladesh Accounting Standards (BAS)
andBangladesh Financial Reporting Standards (BFRS), the Companies
Act 1994, the Securities and Exchange Rules1987 and other
applicable laws and regulations.
The financial statements were approved by the Board of Directors
on 20 April 2010.
2.2 Basis of measurementThese financial statements have been
prepared on the historical cost basis except revaluation of land at
Tongi madein 1979.
2.3 Functional and presentational currencyThese financial
statements are presented in Bangladesh Taka (Taka/Tk), which is the
company's functional currency.All financial information have been
rounded off to the nearest Taka except the information presented in
revenue innote 19 and related party transactions in note 33 have
been rounded off to the nearest thousand Taka.
2.4 Use of estimates and judgmentsThe preparation of financial
statements requires management to make judgments, estimates and
assumptions thataffect 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 significant areas of estimation uncertainty
and critical judgement in applying accounting policiesthat have the
most significant effect on the amounts recognised in the financial
statements is included in the followingnotes:
Note 3.3 InventoriesNote 3.5 Bad debts provisionNote 7 Deferred
tax assetsNote 14 Deferred liabilityNote 18 Provision for taxNote
35 Contingent liabilities
2.5 Going concernThe company has adequate resources to continue
in operation for the foreseeable future. For this reason
thedirectors continue to adopt going concern basis in preparing the
financial statements. The current resources of thecompany provide
sufficient fund to meet the present requirements of the existing
business.
-
26 27
3. Significant accounting policiesThe accounting policies set
out below have been applied consistently to all periods presented
in these financialstatements.
3.1 Foreign currencyForeign currencies are translated into Taka
at the rates prevailing on the transaction date. Monetary assets
andliabilities are translated at the rates prevailing at the
balance sheet date. Non-monetary assets and liabilities arereported
using the exchange rate prevailing at the date of transaction.
Differences arising on conversion are chargedor credited to the
profit and loss account.
3.2 Property, plant and equipment
3.2.1 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 expenditure that are directly attributable to the
acquisition of asset and bringing to the location andcondition
necessary for it to be capable of operating in the intended manner.
The cost of self construed asset includedthe cost of material and
direct labour, any other cost directly attributable to bringing the
assets to a working conditionfor their intended use.
3.2.2 Subsequent costsThe cost of replacing part of an item of
property, plant and equipment is recognised in the carrying amount
of theitem if it is probable that the future economic benefits
embodied within the part will flow to the company and its costcan
be measured reliably. The carrying amount of the replaced part is
derecognised. The costs of the day-to-dayservicing of property,
plant and equipment are recognised in profit or loss as
incurred.
3.2.3 DepreciationNo 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% 10%
3.2.4 Leased assets
Leases in terms of which the company assumes substantially all
the risks and rewards of ownership are classifiedas finance leases.
Upon initial recognition the leased asset is measured at an amount
equal to the lower of its fairvalue and the present value of the
minimum lease payments. Subsequent to initial recognition, the
asset is accountedfor in accordance with the accounting policy
applicable to that asset. Other leases are operating leases and
theleased assets are not recognised on the company's balance
sheet.
3.2.5 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.
3.3 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.
Net realizable value is the estimated selling price in the
ordinary course of business, less the estimated costs ofcompletion
and selling expenses.
3.4 ImpairmentThe carrying amounts of the assets, other than
inventories and deferred tax assets are reviewed at each
reportingdate to determine whether there is any indication of
impairment. If any such indication exists then the
recoverableamount of the asset is estimated. Impairment losses, if
any, are recognised in profit and loss account.
3.5 Accounts receivableAccounts receivables are initially
recognised at cost which is the fair value of the consideration
given in return. Afterinitial recognition these are carried at cost
less impairment losses due to uncollectibility of any amount
sorecognised.
Provision for doubtful debts is made based on the company
policy. Bad debts are written off on consideration of thestatus of
individual debtors.
3.6 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 company without any restriction.
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 and are fully entitled to any
residual proceeds ofliquidation.
3.8 Employee benefitThe 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.
The company also maintains three contributory provident funds
for its permanent employees categorised asmanagers, officers and
supervisors and workers. These are administered by the Board of
Trustees
A funded management pension fund is also in operation. Actuarial
valuation of the gratuity fund is carried out by aprofessional
actuary.
3.9 ProvisionsA provision is recognized if, as a result of past
event, the Company has a present legal or constructive obligation
thatcan reliably be estimated, and it is probable that an outflow
of economic benefits will be required to settle theobligation.
3.10 TaxIncome tax expense comprises current and deferred taxes.
Income tax expense is recognised in the profit and lossaccount.
-
28 29
3.10.1 Current taxIncome tax expense is recognised in profit and
loss account. Current tax is the expected tax payable on the
taxableincome for the year, using tax rates enacted or
substantively enacted at the reporting date, and any adjustment
totax payable in respect of previous years. The Company qualifies
as a "Publicly Traded Company"; hence theapplicable tax rate is
27.50 %. It enjoys 10% rebate on income tax payable so calculated
for declaring dividend morethan 20% of paid up capital.
3.10.2 Deferred taxDeferred tax is provided on temporary
differences between the carrying amounts of assets and liabilities
for financialreporting purposes and the amounts used for taxation
purposes. Deferred tax is measured at the tax rates that
areexpected to be applied to the temporary differences when they
are reversed, based on the laws that have beenenacted or
substantively enacted by the reporting date. Deferred tax assets
and liabilities are offset if there is a legallyenforceable right
to offset current tax liabilities and assets, and they relate to
income taxes levied by the same taxauthority on the same taxable
entity.
A deferred tax asset is recognised to the extent that it is
probable that future taxable profits will be available againstwhich
temporary differences can be utilised. Deferred tax assets are
reviewed at each reporting date and are reducedto the extent that
it is no longer probable that the related tax benefit will be
realised.
3.11 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 discount.
Revenue from sale of goods is recognised when the significant
risks and rewards of ownership has 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 benefit
associated withthe transactions will flow to the company.
3.12 Duty drawbackDuty drawback claimed on export sales are
adjusted against cost of imported raw materials.
3.13 Sales proceed from wastage, scrap etc.Sale of empty dram 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.
3.14 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.
3.15 Finance income and expenseFinance income comprises interest
income on funds invested, interest on shop managers account held
with thecompany and foreign exchange gain on translation of foreign
currency. Interest income is recognised on accrualbasis.
Finance expense comprises interest expense on overdraft, finance
lease and interest on shop managers accountheld with the company
and foreign exchange loss on translation of foreign currency. All
finance expenses arerecognised in the profit and loss account.
3.16 Earnings per shareThe company presents basic earnings per
share (EPS) data for its ordinary shares.Basic EPS is calculated by
dividing the net profit for the year attributable to ordinary
shareholders by the weightedaverage number of ordinary shares
outstanding during the year.
3.17 Events after the reporting periodEvents after the reporting
period that provide additional information about the company's
position at the reportingdate are reflected in the financial
statements. Events after the reporting period that are not
adjusting events aredisclosed in the notes when material.
4. Property, plant and equipment
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 2009 the year the year 2009 2009 the year
transfers 2009 2009 Taka Taka Taka Taka Taka Taka Taka Taka
Taka
Land (increased by Tk 60,631,183 byrevaluation in 1979)
86,057,856 - - 86,057,856 - - - - 86,057,856Building 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)
554,207,671 472,029,796 16,387,327 (34,249,194) 454,167,929
100,039,742Motor 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
8,415,175Furniture, fixtures and equipment 270,092,240 71,056,538
(6,587,055) 334,561,723 119,091,882 25,889,830 (5,688,276)
139,293,436 195,268,287
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
2008 1,129,898,886 93,191,138 (22,245,033) 1,200,844,991
713,798,026 49,748,412 (20,669,335) 742,877,103 457,967,888
Building includes properties at 24 Bangabandhu Avenue, Dhaka
which were purchased in 1985 from the Government of Bangladesh at
acost of Tk 5,344,417. Sale deed is yet to be executed.4.1
Depreciation charged to:
2009 2008 Taka Taka
Cost of goods sold (Note 20.1) 20,450,664 20,087,639
Administration, selling and distribution expenses (Note 22)
33,752,875 29,660,773
54,203,539 49,748,412
4.2 Disposal of property, plant and equipmentOriginal
Accumulated Book Sale Mode of
Particulars cost depreciation value value disposal PurchaserTaka
Taka Taka Taka
Machinery 37,422,435 34,249,194 3,173,241 1,768,378 Auction
Various partiesComputer 65,000 25,082 39,918 65,000 Ins.
ClaimFurniture, fixturesand equipment 277,300 119,930 157,370
133,642 Auction M.A. Matin, GulshanTime clock forattendance 150,000
57,881 92,119 86,000 Ins. ClaimMotor vehicles:
Dhaka Metro GA 17-1935 1,796,000 1,207,014 588,986 435,000
Negotiation Qader Dhaka Metro Kha 12-3850 1,115,000 401,400 713,600
535,963 Negotiation Fazli Ali
Dhaka Metro Kha 11-9254 949,400 747,455 201,945 189,620
Negotiation B. Chowdhury
Shop furniture andequipment 5,708,105 5,155,951 552,154 614,679
Auction Various partiesShop furniture 386,650 329,432 57,218
312,050 Ins. Claim
47,869,890 42,293,339 5,576,551 4,140,332
4.3 CIF value of capital assetsThere were no capital assets
imported during 2009 under CIF basis. However, import of capital
assets during 2009 underC&F basis was as follows:Capital assets
Foreign currency Local currency
USD Taka Plant and machinery 214,082 15,100,326
15,100,326
-
30 31
2009 2008Taka Taka
5. Capital work in progressExpenses in connection with import of
machinery:
Air blown injection machine 16,629 -Steam radiator 8,361
-Injection moulding machine 39,255 -
Expenses in connection with gas generator equipment 250,000
-
Expenses in connection with construction of CDC Dhamrai building
13,546,426 -13,860,671 -
6. Investment in subsidiaryOn 19 November 2009 the Company
subscribed an amount of Tk 19,970,000 for 199,700 shares of Tk 100
each ofits newly incorporated wholly owned subsidiary BB Export
Limited. This subsidiary was incorporated in Bangladeshand did not
commence its operation till 31 December 2009.
7. Deferred tax assetsDeferred tax assets recognized in
accordance with the provisions of BAS 12, Income taxes, is arrived
at as follows:
Balance as at 1 January 12,286,000 2,505,000
Addition/(reduction) during the year 3,714,000 9,781,000 Balance as
at 31 December 16,000,000 12,286,000
Carrying Taxable/amount on (deductible)
balance sheet temporarydate Tax base differenceTaka Taka
Taka
As at 31 December 2009Property, 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 (a) 16,000,000
As at 31 December 2008Property, plant and equipment (excluding
land and certain motor vehicles) 369,605,827 256,571,908
113,033,919
Provision for staff gratuity (net of payment) (127,064,575) -
(127,064,575)Provision for bad and doubtful debts (35,611,243) -
(35,611,243)
Net deductible temporary difference (49,641,899)Deferred tax
assets (b) 12,286,000 Deferred tax credit (a-b) 3,714,000
2009 2008Taka Taka
8. InventoriesRaw materials 282,406,473 317,112,970 Raw
materials in transit 28,922,384 15,088,375 Work in process
88,710,604 74,989,549 Finished goods 1,033,285,946
1,052,947,539
1,433,325,407 1,460,138,433
9. Accounts receivableTrade (unsecured) - considered good :
Export customers - BSO companies - 1,362,048 Export customers -
Non BSO companies 8,659,308 8,823,283 Receivables from depots
58,596,776 49,666,541 Receivables from institutional sale
31,399,966 17,421,638
98,656,050 77,273,510 Others (unsecured) - considered good :
Insurance claims 1,229,210 1,826,440 VAT claims 108,480 46,336
Claim receivable on import 339,664 -Duty drawback claim receivable
654,522 347,390
2,331,876 2,220,166 100,987,926 79,493,676
Accounts receivable as at 31 December 2009 as shown above has
been arrived at after deducting provision fordoubtful debts of Tk.
16,467,870 which was arrived at as follows:
Taka TakaBalance as at 1 January 18,106,773 21,749,888 Provision
made during the year - 778,598 Bad debt written off during the year
- (79,854)Provision reversed during the year (1,638,903)
(4,341,859)Balance as at 31 December 16,467,870 18,106,773
Accounts receivable are aged as below:2009 2008
Below Over Below Oversix months six months six months six
months
Taka Taka Taka Taka
Export customers - BSO companies - - 1,362,048 - Export
customers - Non BSO companies 8,659,308 - 8,823,283 - Receivables
from depots 58,596,776 - 49,666,541 - Receivables from
institutional sale 31,399,966 - 17,421,638 - Insurance claims
1,229,210 - 1,826,440 - VAT claims 108,480 - 46,336 - Claim
receivable on import 339,664 - -Duty draw back claim receivable
654,522 - 262,952 -
100,987,926 - 79,409,238 -
-
32 33
2009 2008Taka Taka
10. Advances, deposits and prepaymentsAdvances (considered good)
to :
Landlords against rent 64,592,330 42,439,851 Agents and
employees 599,592 614,737 Suppliers against materials and services
1,844,729 1,271,577
67,036,651 44,326,165 Advances (considered doubtful) to:
Agents and employees 20,577,126 17,532,594 Less: Provision
against advances to agents and employees 19,706,846 17,504,470
870,280 28,124 67,906,931 44,354,289
Advance income tax 87,221,219 72,390,175 Security and other
deposits 123,327,401 93,342,405
278,455,551 210,086,869
Provision against advances to agents and employees represents
the following:
Balance as at 1 January 17,504,470 16,319,903 Provision made
during the year 2,571,501 1,184,567 Bad debts written off during
the year (369,125) -Balance as at 31 December 19,706,846
17,504,470
Ageing of advances are as follows:2009 2008
Below Over Below Oversix months six months six months six
months
Taka Taka Taka Taka
Advances to:Landlord against rent 31,495,164 33,097,166
6,976,970 35,462,881 Agents and employees 599,592 - 614,737 -
Suppliers against materials and services 1,844,729 - 1,271,577
-
33,939,485 33,097,166 8,863,284 35,462,881
2009 2008Taka Taka
11. Cash and cash equivalentsCash balances:
On hand 574,865 242,597
In transit:From stores 38,687,463 27,738,640 From depots
15,123,381 49,967,060 From institutions 1,177,007 5,228,630
Balances with banks in:Current accounts (48,603,002)
10,993,167Short term deposits 345,107,464 169,237,698
296,504,462 180,230,865 352,067,178 263,407,792
The current accounts include book overdrafts from Eastern Bank
Limited and HSBC for Tk 85,892,508 andTk 1,296,359
respectively.
2009 2008Taka Taka
12. Share capitalAuthorised:
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 bonusshares) of Tk 10 each issued for
considerationother 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 and quotedat Tk. 528.30
(2008: Tk 320.70) and Tk 522.90 (2008: Tk 325.00) per share at 31
December 2009 respectively.
Percentage of shareholdings:2009 2008
% Taka % Taka
Bafin (Nederland) B.V. 70.00 95,760,000 70.00 95,760,000
International Finance Corporation 0.03 42,400 0.03 45,400 Other
non-resident shareholders 9.79 13,390,800 8.11 11,098,800 Local
shareholders 20.18 27,606,800 21.86 29,895,800
100.00 136,800,000 100.00 136,800,000
Classification of shareholders by holding:
Holdings Number of holders % of total holding
2009 2008 2009 2008
Less than 500 shares 6,152 7,040 91.16 6.96
501 to 5,000 shares 525 574 7.78 6.01
5,001 to 10,000 shares 35 28 0.52 1.54
10,001 to 20,000 shares 15 13 0.22 1.43
20,001 to 30,000 shares 6 7 0.09 1.26
30,001 to 40,000 shares 6 7 0.09 1.82
40,001 to 50,000 shares 1 1 0.01 0.32
50,001 to 100,000 shares 4 5 0.06 2.88
100,001 to 1,000,000 shares 4 4 0.06 7.78
Over 1,000,000 shares 1 1 0.01 70.00
6,749 7,680 100.00 100.00
-
34 35
2009 2008Taka Taka
13. Reserves and surplusReserve on revaluation of land
60,631,183 60,631,183 Non-distributable special reserve (Note 13.1)
998,620 998,620 General reserve 48,863,000 48,863,000
Unappropriated profit (Note 13.2) 873,194,520 724,748,075
983,687,323 835,240,878
13.1 Non-distributable special reserveThis represents 90% of the
cumulative post-tax profit in respect of certain categories of
income up to 1992 as definedand directed by Bangladesh Bank. Since
1993, the requirement for continuing to create such special reserve
isapplicable only to the profit on sale of immovable assets such as
land, buildings, etc
13.2 Unappropriated profitBalance as at 1 January 724,748,075
575,292,171 Profit for the year 449,406,445 449,415,702 Unclaimed
dividend reversed - 1,000,202 Interim dividend -2009 (157,320,000)
(157,320,000)Final dividend -2008 (143,640,000) (143,640,000)
873,194,520 724,748,075
14. Deferred liabilityDeferred liability represents provision
for staff gratuity up to 31 December 2009.
Balance as at 1 January 127,064,575 140,265,275 Add: Provision
made during the year 17,149,366 -
144,213,941 140,265,275 Less: Paid during the year 12,254,708
12,159,718
Forfeited during the year - 1,040,982 Balance as at 31 December
131,959,233 127,064,575
15. Creditors for goodsPayable to local suppliers 260,583,634
371,977,702 Payable to BSO companies 18,400,992 15,635,639
278,984,626 387,613,341
16. Creditors for expensesPayable to local suppliers 73,648,500
97,465,769 Payable to BSO companies 208,522,967 97,836,316 Accrued
liabilities 236,257,580 158,260,087
518,429,047 353,562,172
2009 2008Taka Taka
17. Creditors for other financeWorkers' profit participation
fund 33,141,708 32,612,353 Personal accounts of employees and
agents 50,156,293 45,387,915 Security and other deposits 15,160,500
13,105,000 Provident fund 6,626,798 4,873,490 Tax deducted at
source 38,401,508 24,226,417 Pension fund 1,323,668 1,481,437 VAT
deducted at source 2,778,039 1,347,063 Salary and wages payable
4,907,315 4,717,169 Inter company payable 19,864,000 -Others
1,073,975 1,964,573
173,433,804 129,715,417
18. Provision for taxCurrent year 184,000,000 180,000,000
Earlier years (net of advance tax) 270,922,477 252,674,318
454,922,477 432,674,31819. Revenue
Product category Unit 2009 2008
Quantity Amount Quantity Amountin '000 '000 Taka in '000 '000
Taka
Shoe -Plastic Pair 2,072 266,607 2,526 310,205 Thong Pair 15,044
612,856 16,407 778,304 Rubber and canvas Pair 1,327 446,504 1,387
403,360 Leather Pair 8,754 3,439,060 8,248 2,916,341
Hosiery Pair 2,062 158,116 1,910 119,816
Export -Leather Sft. 135 13,554 228 23,332 Shoes Pair 177 58,660
208 71,954
4,995,357 4,623,312
The above revenue has been arrived as follows:
2009 2008Taka Taka
Gross Revenue Net of VAT 5,149,352,312 4,770,587,928
Less: Sales proceed from wastage, scrap, etc. (8,317,634)
(10,744,655)Wholesale trade discount (145,677,736) (136,531,196)Net
revenue 4,995,356,942 4,623,312,077
-
36 37
2009 2008Taka Taka
20. Cost of goods soldStock of finished goods as at 1 January
1,052,947,539 832,680,083 Add: Cost of goods manufactured (Note
20.1) 2,587,556,308 2,823,960,512 Finished goods purchased
630,636,238 426,925,867
4,271,140,085 4,083,566,462 Less: Stock of finished goods as at
31 December 1,033,285,945 1,052,947,539
3,237,854,140 3,030,618,923
The opening and closing stocks of goods produced as per category
are shown below:Figures in '000 pairs
Closing OpeningCategory stock stockShoe Plastic 835 685
Thong 973 995 Rubber and Canvas 482 730 Leather 2,450 2,382
4,740 4,792
2009 2008Taka Taka
20.1 Cost of goods manufacturedCost of materials consumed (Note
20.1.1) 1,961,392,914 2,250,997,792
Direct wages 352,101,234 308,396,404 2,313,494,148
2,559,394,196
Manufacturing overhead :Remuneration to employees 114,222,980
105,662,220 Gas, water and electricity 47,776,047 39,317,259
Repairs and maintenance (Note 20.1.2) 74,843,881 69,613,180
Insurance 3,875,547 7,590,123 Uniform to workers 903,246 700,420
Health and other welfare expenses 13,818,831 12,005,673 Travelling
5,679,643 4,709,471 Postage 384,666 252,616 Freight and transport
1,695,029 1,150,190 Stationery 1,866,587 1,176,304 Entertainment
2,266,094 1,911,842 Depreciation (Note 4.1) 20,450,664
20,087,639
287,783,215 264,176,937 2,601,277,363 2,823,571,133
Difference in work in process :Work in process as at 1 January
74,989,549 75,378,928 Work in process as at 31 December 88,710,604
74,989,549
(13,721,055) 389,379 Cost of goods manufactured 2,587,556,308
2,823,960,512
20.1.1 Cost of materials consumed
Opening stock Purchase Closing stock Consumption
Description Unit Quantity Value C&F value Quantity Value
Quantity Value Quantity Value (Taka) (USD) (Taka) (Taka) (Taka)
Imported:
EVA resin Kg 102,325 20,465,000 1,545,468 961,000 107,410,000
77,725 8,549,750 985,600 119,325,250 PVC resin Kg 176,950
18,579,750 1,610,504 1,599,000 111,930,000 150,375 10,526,250
1,625,575 119,983,500 Wet Blue Sft 113,586 11,396,462 576,585
556,684 40,072,641 66,197 4,990,972 604,073 46,478,131
Others - 152,703,462 - - 622,784,024 - 111,488,135 -
663,999,351203,144,674 882,196,665 135,555,107 949,786,232
Local purchase 113,968,296 1,052,807,386 146,851,366
1,019,924,316
Sales proceed from wastage, scrap, etc. - (8,317,634) -
(8,317,634)2009 317,112,970 1,926,686,417 282,406,473
1,961,392,914
2008 333,106,330 2,235,004,432 317,112,970 2,250,997,792
Duty drawback of Tk. 2,306,041 claimed on export sales have been
adjusted against cost of raw materials.
20.1.2 Repairs and maintenanceRepairs and maintenance amounting
to Tk 74,843,881 includes Tk 34,646,563 (including C&F value of
US$ 483,517and EUR 12,008 of imported items) representing cost of
spare parts, moulds and accessories consumed.
20.2 Statement of productionProduction capacity in pairs Actual
production in pairs
Figures in '000 Figures in '0002009 2008 2009 2008
Tongi 23,431 25,937 19,912 22,732 Dhamrai 6,673 6,943 6,392
6,127
30,104 32,880 26,304 28,859
20.2.1 Production capacity and actual production of each
category are given below:Figures in '000 pairs
Installed ActualCategory capacity production
Shoe Plastic 3,340 2,267 Thong 18,560 16,468 Rubber and Canvas
1,531 1,177 Leather 6,673 6,392
30,104 26,304
2009 2008Taka Taka
21. Other incomeProfit/(loss) on disposal of property, plant and
equipment (1,436,219) 144,214 Discount for early payment 8,539,737
6,786,217 General trading - 310,976
7,103,518 7,241,407
Previous year's figures have been rearranged, wherever
necessary, to conform to current year's presentation.
-
38 39
2009 2008Notes Taka Taka
22. Administration, selling and distribution expenses
Remuneration to employees 360,350,283 310,914,077 Health and
other welfare expenses 8,646,380 8,099,188 Travelling expenses
38,975,461 37,014,525 Bank charges 6,551,142 6,083,378 Repairs and
maintenance 62,177,793 45,195,519 Stationery 12,286,535 9,363,816
Postage, telegram and telephone 9,595,338 9,960,966 Entertainment
expenses 9,977,547 7,269,241 Subscription and donation 6,839,209
1,734,054 Advertisement 20,991,682 24,583,881 Rent, rates and taxes
93,203,114 72,019,226 General charges 22.1 23,040,859 16,279,482
Directors' fees 68,000 78,000 Auditors' fees 418,000 357,500 Legal
and other professional fees 22.2 5,128,947 3,915,231 Insurance
2,454,104 3,665,472 Land revenue 431,678 774,358 Freight and
transport 44,568,980 40,420,953 Packing expenses 56,997,081
56,222,351 Commission 22.3 123,413,785 106,832,326 Royalty on Hush
Puppies brand 22.4 8,655,078 5,158,957 Royalty on Dr. Scholl brand
22.4 2,477,165 2,133,913 Global Footwear Services fees 22.4
32,174,700 32,651,717 Electricity 31,625,199 21,391,215 Trade mark
licence fees 22.4 107,215,954 99,880,821 IT fees 6,504,322
-Depreciation 4.1 33,752,875 29,660,773
1,108,521,211 951,660,940
Previous year's figures have been rearranged, wherever
necessary, to conform to current year's presentation.
22.1 General chargesGeneral charge represents security service,
samples, bad debts, etc. Bad debts represent the following:
TakaProvision against advances to agents and employees
2,571,501Provision for bad debts reversed (1,638,903)Bad debts
previously write off now recovered (126,136)
806,462 22.2 Legal and other professional fees
Legal and other professional fees include fees of Tk 3,956,813
(2008: Tk 2,147,215) of the statutory audit firm in connectionwith
global reporting, tax certification and services regarding
assessments/appeals and advisory services.
22.3 CommissionRetail 121,559,616 105,821,984 Export 1,854,169
1,010,342
123,413,785 106,832,326
22.4 Royalty on Hush Puppies brand , royalty on Dr. Scholl
brand, Global Footwear Services fees and trade mark licencefees of
Tk 8,655,078, Tk. 2,477,165, Tk. 32,174,700 and Tk 107,215,954
respectively represent equivalent foreigncurrency of USD 125,664
USD 35,966 SGD 660,000 and USD 1,556,674.24 provided during the
year as provisionfor expenses.
2009 2008Taka Taka
23. Finance incomeInterest on:
Fixed deposit 4,226,193 2,230,871 Short term deposit 6,159,715
4,971,087 Personal account 14,348 36,968
Exchange gain 269,207 1,777,572 10,669,463 9,016,498
24. Finance expensesInterest on:
Overdraft 766,401 2,480,692 Lease finance - 8,672 Personal
account 3,154,018 2,553,700
3,920,419 5,043,064
25. Emoluments to directorsRemuneration 14,606,145 13,712,148
Bonus 17,465,488 25,136,357 Retirement benefit schemes 1,041,880
972,420 Housing 2,160,000 2,040,000
35,273,513 41,860,925
26. Emoluments to managersRemuneration 81,312,938 70,413,147
Retirement benefit schemes 10,337,137 9,055,757 Housing 9,713,959
9,983,884
101,364,034 89,452,788
27. Contribution to employees' provident fund and pension
fundDuring the year 2009 the company contributed the following
amounts to the employees' provident fund and pensionfund:
Provident fund :Managers 5,407,206 4,860,340 Officers &
supervisors 6,833,091 6,292,238 Workers 9,576,576 9,935,917
21,816,873 21,088,495 Pension fund 5,227,090 5,167,837
27,043,963 26,256,332
28. Profit before taxThis includes profit amounting to Tk
357,346,048 (2008 : Tk 387,266,038) of leather shoe factory and
tannery atDhamrai.
-
40 41
29. Remittance of foreign currency
Amount Amountin foreign in local
Name of party Nature of transaction Currency currency
currencyTaka
Bafin (Nederland) B.V. Dividend USD 2,739,243 189,604,800
SSL International PLC Royalty on Dr. Scholl Brand GBP 8,625
1,005,621
Global Footwear Service Footware services fees SGD 445,500
21,793,900 Pte. Ltd, Singapore
Wolverine World Royalty on Hush USD 66,884 4,643,061 Wide Inc.,
USA Puppies Brand
The figures represent net of tax.
30. Earnings in foreign currency
C&F value
Unit Quantity USD TakaExport of Finished leather Sft 135,104
198,529 13,553,601
Shoes Pair 177,469 858,592 58,660,228
31. Earnings per share
31.1 Basic earnings per share (EPS)
2009 2008Taka Taka
The computation of EPS is given below:Earnings attributable to
the ordinary shareholders (net profit after tax) 449,406,445
449,415,702 Weighted average number of ordinary shares outstanding
during the year 13,680,000 13,680,000Basic earnings per share (EPS)
32.85 32.85
31.2 Diluted earning per shareNo diluted earnings per share is
required to be calculated for the year as there was no scope for
dilution during theyear.
32. Number of employeesThe number of employees for the whole
year or part thereof who received a total remuneration of Tk 36,000
andabove was 1,510 (2008: 1,519).
33. Related party transactions
Transactions Receivable/Nature of Nature of during (payable) as
at
Name of the party relationship transaction the year 31 Dec
2009(Taka '000) (Taka '000)
Bata, Singapore Group company Purchase (259,497) (17,165)Claim
1,678 - Service received (555) (382)
Bata, Czech Group company Service received (105) - Bata, Sri
Lanka Group company Sales (1,362) - Bata (Malaysia) Berhad Group
company Service received (163) -
Service given 16 -
Bata, Thailand Group company Purchase (867) - Service received
(14) -
P.T. Sepatu Bata, Jakarta Group company Purchase (1,362)
(715)Claim 343 340 Service received (139) (139)
Global Footwear Service Group company Service received (32,136)
(16,220)Pte. Ltd., Singapore
Bata Brand S.a.r.l., Luxembourg Group company Trade mark
(107,216) (207,097)licence fees
Compass S.P.A., Italy Group company Service received 33 -
Euro Footwear Holdings s.a.r.l. Group company Service received
(6,573) (6,573)BB Export Limited Subsidiary company Subscription of
shares 19,970,000 19,970,000
Liability for subscription of shares (19,970,000)
(19,970,000)
Incorporation expenses 106 106
Key management employee Directors Salary and other (35,274) -
benefits
Key employees -do- (101,364) -
Transactions with related companies are priced on arm's length
basis and are in the ordinary course of business.
34. Capital expenditure and financial commitmentThere were no
capital expenditure and financial commitments as at 31 December
2009 (2008: Nil)
35. Contingent liabilitiesThere are contingent liabilities on
account of unresolved disputed corporate tax assessments and VAT
claims by theauthority aggregating to Tk. 654,219,000 (2008: Tk
763,492,000). Considering the merits of the cases, it has notbeen
deemed necessary to make provisions for all such disputed claims.
However, the company has so far madeprovision for Tk 368,852,000
(2008: 335,083,000) against the above contingent liabilities.
There is also contingent liability in respect of outstanding
letters of credit of Tk. 103 million and letter of guarantee ofTk.
4.2 million.
36. Events after the reporting periodFor the year 2009 the Board
of Directors recommended a final dividend of Tk 10.50 per share
amounting toTk 143,640,000 at the board meeting held on 20 April
2010.
-
Bata Shoe Company (Bangladesh) LimitedProfit and Loss Account
for the year ended 31 December 2009 kK lro
Exhibit - I
2009 2008
Manufacturing Trading Total TotalTaka Taka Taka Taka
Revenue 4,383,915,615 611,441,327 4,995,356,942
4,623,312,077
Cost of goods sold (2,879,540,111) (358,314,029) (3,237,854,140)
(3,030,618,923)Gross profit 1,504,375,504 253,127,298 1,757,502,802
1,592,693,154 Other income 7,103,518 - 7,103,518 7,241,407
Administration, selling anddistribution expenses (948,864,579)
(159,656,632) (1,108,521,211) (951,660,940)Profit from operating
activities 562,614,443 93,470,666 656,085,109 648,273,621 Finance
income 9,132,776 1,536,687 10,669,463 9,016,498
Finance expenses (3,355,774) (564,645) (3,920,419)
(5,043,064)Profit before contribution to WPPF 568,391,445
94,442,708 662,834,153 652,247,055
Contribution to WPPF (28,419,573) (4,722,135) (33,141,708)
(32,612,353)Profit before tax 539,971,872 89,720,573 629,692,445
619,634,702
Tax expense:
Current tax 175,932,903 8,067,097 184,000,000 180,000,000
Deferred tax (3,714,000) - (3,714,000) (9,781,000)
172,218,903 8,067,097 180,286,000 170,219,000
Profit after tax for the year 367,752,969 81,653,476 449,406,445
449,415,702
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Form of Proxy
Please QuoteShareholder's Folio / BO No. No. of Shares held
ATTENDANCE
I/We hereby record my/our presence at the 38th Annual General
Meeting of Bata Shoe Company(Bangladesh) Limited at Dhamrai
Factory, Dhaka on Thursday 24 June, 2010 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 38th Annual General
Meeting of theCompany to be held on Thursday 24 June, 2010 and
adjournment thereof and the poll that may be taken inconsequence
thereof.
As witness my/our hand this day of 2010
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.)
SHOE COMPANY (BANGLADESH) LIMITEDTONGI,GAZIPUR
TEL: +880-2-9800501-5FAX:+880-2-9800511
E-MAIL: [email protected]
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