04 34-35 50

Corporate Information Statement of Compliance Statement of Changes in

with Listed Companies (Code Equity
05-10 of Corporate Governance)

Notice of Annual General

Regulation, 2019
51
Meeting Statement of Cash Flows
38
11 Independent Auditor’s
Review Report To The 52-91
Key Operating Highlights Members on The Statement Notes to the Financial
of Compliance Contained Statements
14-15 in Listed Companies (Code

Corporate Social
of Corporate Governance)
Regulations, 2019 94-96
Responsibility Pattern of Shareholding

42-44
16 Independent Auditor’s Report Form of Proxy
Value Added and Its to the Members
Distribution
48
17 Statement of
Operational Statistics Financial Position

18-19 49
Chairman’s Review Report Statement of Profit or Loss
and other Comprehensive
Income
22-32
Directors’ Report to the
Members
To make great shoes accessible to everyone
We help people look and feel good by continuously focusing on product quality, innovation and
value.

We become the customer’s destination of choice by offering personal shopping experience to

create long standing customer relationships.

We attract and retain the best people by showing great leadership, a passion for high standards
our respect for diversity and commitment to create exceptional opportunities for professional
growth.

We remain the most respected footwear company by being socially responsible and ethical in
everything we do and a credit to every community in which we operate.
Corporate Information
Board of Directors
Mr. Roberto Longo Chairman Non - Executive Director
Mr. Muhammad Imran Malik Director/Chief Executive Executive Director
Mr. Amjad Farooq Director/Chief Financial Officer Executive Director
Mr. Syed Asad Ali Zaidi Director Executive Director
Mr. Toh Guan Kiat Director Non - Executive Director
Mr. Aamir Amin Director Non - Executive Director
Mr. Kamal Monnoo Director Independent Director
Mr. Muhammad Maqbool Director Independent Director
Ms. Fatima Asad Khan Director Independent Director

Audit Committee Bankers

Mr. Muhammad Maqbool Chairman Habib Bank Limited
Mr. Roberto Longo Member Habib Metropolitan Bank Limited
Mr. Aamir Amin Member MCB Bank Limited
Mr. Toh Guan Kiat Member Bank Al Habib Limited
National Bank of Pakistan Limited
Human Resource and United Bank Limited
Remuneration Committee Meezan Bank Limited
Ms. Fatima Asad Khan Chairperson Allied Bank Limited
Mr. Muhammad Imran Malik Member
Mr. Toh Guan Kiat Member Registered Office
Batapur,
Chief Financial Officer (CFO) G. T. Road,
Mr. Amjad Farooq P.O. Batapur, Lahore.

Company Secretary Share Registrar
Ms. Mahnoor Ather Corplink (Pvt.) Ltd.
Wings Arcade, 1-K Commercial,
Auditors Model Town, Lahore.

A.F. Ferguson & Co. Factories
(a member firm of PwC Network)
23-C, Aziz Avenue, Canal Bank, Batapur,
Gulberg V, Lahore. G. T. Road,
P.O. Batapur, Lahore.
Legal Advisor
Maraka,
Surridge & Beecheno 26 - Km, Multan Road, Lahore.
60, Shahrah-e-Quaid-e-Azam,
Ghulam Rasool Building, Liaison Office Karachi
Lahore.
138 C-II Commercial Area,
Stock Exchange Listing P.E.C.H.S., Tariq Road, Karachi.
Bata Pakistan Limited is listed on Pakistan
Stock Exchange under “Leather and Tanneries” sector.

Web Presence
https://www.bata.com.pk/

4
 Notice of Annual General Meeting
NOTICE IS HEREBY GIVEN TO ALL SHAREHOLDERS/MEMBERS that the 70th Annual General Meeting of Bata Pakistan Limited is scheduled to be held
on Monday, April 25, 2022 at 10:00 a.m. at the Company’s Registered Office situated at G.T. Road, Batapur, Lahore to transact the following business:

1. To confirm the minutes of the Annual General Meeting held on April 27, 2021.

2. To receive, consider, and adopt the Annual Audited Accounts of the Company for the year ended on December 31, 2021 together with Directors’ and
Auditors’ Reports thereon.

3. To appoint Auditors and fix their remuneration for the year ending on December 31, 2022. The Board of Directors upon recommendation of audit
committee has recommended M/s A.F. Ferguson & Co. Chartered Accountants, being eligible for re-appointment as auditors of the company for the
year ending December 31, 2022.

4. To transact any other business with the permission of the Chairman.

By order of the Board

Batapur Lahore: Mahnoor Ather
March 02, 2022 Company Secretary

NOTES:
1. Closure of Shares Transfer Books:
The Share Transfer Books of the Company will remain closed from April 19, 2022 to April 25, 2022 (both days included). Transfer requests on prescribed
format, received at the office of the Share Registrar of the Company, M/s. Corplink (Pvt.) Ltd. 1-K Commercial, Model Town, Lahore on or before the
close of business on April 18, 2022 will be treated in time for the determination of entitlement of shareholders to attend and vote at the meeting.

2. Participation in the Annual General Meeting:

All members entitled to attend and vote at this Meeting may appoint another person as his/her proxy to attend and vote for him / her. Proxies in order
to be effective must be received at the Registered Office of the Company not later than 48 hours before the time of holding the meeting. CDC Accounts
Holders will further have to follow the guidelines as laid down in Circular 1 dated January 26, 2000 issued by the Securities & Exchange Commission of
Pakistan. Proxy form is available at the Company’s website i.e. www.bata.com.pk (in English and Urdu Language).

3. Participation in AGM through Electronic Means:

The shareholder of the Company desirous of attending the meeting through video link etc. may inform the Company and provide their details including
name, CNIC scan (both sides), folio number, cell phone number and email address before close of business on April 19, 2022 at the email investorcare.
[email protected] The video link of meeting shall be sent to the members on their registered email addresses.

5
4. Attendance of the Members:
a. For attending the meeting
I. In the case of individuals, the account holder or sub-account holder whose registration details are uploaded as per the Central Depository
Company of Pakistan Limited Regulations, shall authenticate his/her identity by showing his/ her valid original Computerized National Identity
Card (CNIC) or original passport at the time of attending the Annual General Meeting.
II. In case of a corporate entity, the Board of Directors’ resolution/power of attorney, with specimen signature of the nominee, shall be produced at
the time of the Annual General Meeting, unless it has been provided earlier.
b. For appointing proxies
I. In case of individuals, the account holder or sub-account holder whose registration details are uploaded as per the Central Depository Company
of Pakistan Limited Regulations, shall submit the proxy form as per the mentioned requirements.
II. The proxy form shall be witnessed by two persons whose names, addresses and CNIC numbers shall be mentioned on the form.
III. Attested copies of the valid CNIC’s or the passports of the beneficial owner(s) and the proxy shall be furnished with the proxy form.
IV. The proxy shall produce his/her valid original CNIC or original passport at the time of the Annual General Meeting.
V. In case of a corporate entity, the Board of Directors’ resolution/power of attorney, with specimen signature of the nominee, shall be submitted to
the Bank along with the proxy form unless the same has been provided earlier.
5. Circulation of Annual Audited Accounts and Notice of AGM:
The Company’s Annual Report is also being circulated through electronic transmission to the members in compliance of section 223(6) of the Companies
Act, 2017 and the same is being placed on our website www.bata.com.pk. Those shareholders who also wish to obtain an electronic copy of the annual
report via email are requested to send their email address/consent at the following email address: [email protected] on or before April 05, 2021,
and a PDF copy of the Annual Report will be duly shared with them via email.

6. Mandatory Submission of CNIC Copies:

With reference to the notification of Securities and Exchange Commission of Pakistan (SECP), SRO 779(1)2011 dated August 18, 2011, the Members/
Shareholders who have not yet submitted photo copy of their valid CNIC to the Company are required to send the same at the earliest directly to the
Company’s Share Registrar M/s. Corplink (Pvt.) Ltd. 1-K Commercial, Model Town, Lahore. In case of non-receipt of the copy of valid CNIC and non-
compliance of the above mentioned SRO of SECP, the Company may be constrained to withhold transfer of dividend in the future if any.

7. Dividend Bank Mandate:

Pursuant to Section 242 of the Companies Act, 2017, members are requested to provide their CNIC’s and bank account details including name of the
bank, address of bank branch and International Bank Account Number (IBAN) to receive their cash dividend directly into their bank account. Therefore,
all members who have not yet provided their CNIC and Bank Account details are once again reminded to immediately submit a copy of their CNIC and
duly filled ‘Dividend Bank Mandate Form’ to the Company’s Share Registrar or to the Company directly. In the absence of valid bank account details and
CNIC, dividend amount will be withheld in compliance with the provisions of Act and Regulations made thereunder by the Commission. The ‘Dividend
Bank Mandate Form’ is available at the Company’s website i.e. www.bata.com.pk.

Members who hold shares in CDC accounts are required to provide their bank mandates to their respective participants.

6
8. Unclaimed Dividends and Share Certificates:
The Shareholders are hereby informed that in accordance with Section 244 of the Companies Act, 2017 and the Unclaimed Shares, Modaraba Certificate,
Dividends, Others Instruments and Undistributed Assets Regulations, 2017, the companies are required to deposit such amounts to the credit of the
Federal Government and the shares to the Commission, which are unclaimed/un-collected for a period of three (03) years or more from the date it is
due and payable. The notices to this fact have already been given to the relevant shareholders.

9. Conversion of Physical Securities into Book Entry Forms:

As per Section 72 of the Companies Act, 2017 every listed company is required to replace its physical shares with bookentry form in a manner as may
be specified and from the date notified by the Commission, within a period not exceeding four years from the commencement of the Act, i.e., May 30,
2017. Further, vide its letter dated March 26, 2021, SECP has directed all the listed companies to pursue its shareholder for conversion of their physical
securities into book entry form.

In light of the aforementioned directives, the Shareholders having physical shareholding are encouraged to open CDC account with CDS participant/
CDC Investor Account Services and convert their existing physical securities into book entry form.

10. Intimation of Changes of Address and declaration for non-deduction of Zakat:

Members who hold shares certificates should notify any changes in their registered address and provide their declarations for non-deduction of zakat,
if applicable, to the Share Registrar. Members who hold shares in CDC / participant accounts are required to update their address and submit their
declarations for non-deduction of zakat, if applicable, to the CDC or their respective participants.
Contact Details

Contact Details
Company Secretary
Bata Pakistan Limited
G.T Road, Batapur Lahore, Pakistan
Email: [email protected]

7
8
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‫‪10‬‬
 Key Operating Highlights

Year 2021 2020 2019 2018 2017 2016 2015

Financial Position
Authorized capital Rs. ' 000s 100,000 100,000 100,000 100,000 100,000 100,000 100,000
Paid up capital Rs. ' 000s 75,600 75,600 75,600 75,600 75,600 75,600 75,600
Shareholders' equity Rs. ' 000s 6,159,421 6,372,599 7,444,589 7,491,327 7,126,724 6,662,594 6,051,192
Total assets Rs. ' 000s 15,602,503 14,005,481 15,878,369 10,693,121 9,524,326 9,084,556 8,239,266
Property, plant and equipment Rs. ' 000s 1,935,392 1,949,867 1,866,897 1,643,028 1,511,909 1,420,757 1,470,821
Provision for gratuity Rs. ' 000s 61,992 68,592 83,476 81,421 76,030 72,150 68,805
Current assets Rs. ' 000s 9,505,254 7,602,604 9,259,645 8,970,446 7,930,147 7,585,132 6,684,071
Current liabilities Rs. ' 000s 5,806,866 3,883,160 4,325,671 3,051,863 2,235,773 2,264,332 2,025,534

Trading Results
Sales Rs. ' 000s 13,983,497 11,710,771 17,424,894 16,795,231 15,496,810 15,082,171 14,781,520
Gross profit Rs. ' 000s 6,475,390 4,370,967 7,869,944 7,525,873 6,620,836 6,193,926 6,005,197
Operating profit Rs. ' 000s 1,525,927 (106,928) 2,294,479 2,307,940 2,220,158 2,140,580 2,131,784
Profit before tax Rs. ' 000s 807,279 (908,049) 1,504,279 2,265,902 2,180,270 2,100,645 2,101,280
Profit after tax Rs. ' 000s 546,089 (627,345) 1,088,862 1,501,409 1,524,466 1,442,016 1,445,500

Distribution
Interim cash dividend - paid % 1000.00 – 900.00 900.00 800.00 650.00 510.00
Final cash dividend - proposed/paid % – – 600.00 600.00 600.00 600.00 450.00

Financial Ratios and Values
Gross profit % 46.31 37.32 45.16 44.81 42.72 41.07 40.63
Operating profit % 10.91 (0.91) 13.17 13.74 14.33 14.19 14.42
Profit before tax % 5.77 (7.75) 8.63 13.49 14.07 13.93 14.22
Profit after tax % 3.91 (5.36) 6.25 8.94 9.84 9.56 9.78
Return on equity % 8.87 (9.84) 14.63 20.04 21.39 21.64 23.89
Price earning ratio Times 30.06 (14.36) 13.84 7.78 12.16 22.60 17.10
Dividend yield % 4.61 9.14 7.02 9.71 5.71 2.55 2.69
Earnings per share Rs. 72.23 (82.98) 144.03 198.60 201.65 190.74 191.20
Debt : equity ratio Times 1.53 : 1 1.20 : 1 1.13 : 1 0.00 : 1 0.00 : 1 0.00 : 1 0.00 : 1
Current ratio Times 1.64 : 1 1.97 : 1 2.77 : 1 2.94 : 1 3.55 : 1 3.35 : 1 3.30 : 1
Average stock turns - value Times 2.21 2.16 2.38 2.49 2.78 3.03 3.08
Debtors turnover Times 14.36 8.45 6.65 2.21 2.84 3.57 6.34
Average collection period Days 25 43 55 165 129 102 58
Property, plant and equipment turnover Times 7.20 6.02 9.33 10.22 10.25 10.62 10.05
Break up value per share Rs. 814.74 819.70 984.73 990.92 942.69 881.30 800.42
Market price per share Rs. 2,171.15 1,531.84 1,993.06 1,545.00 2,452.27 4,310.00 3,269.70
Market capitalization Rs. ' 000s 16,413,894 11,580,710 15,067,534 11,680,200 18,539,161 32,583,600 24,718,932

Other information
Permanent employees Number 2,274 2,287 2,683 2,693 2,421 2,492 2,544
Retail outlets Number 443 444 462 476 435 412 417
Wholesale depots Number 0 0 11 12 12 13 13
Installed capacity Pairs ' 000s 18,339 18,704 19,375 20,290 20,329 19,439 18,941
Actual production Pairs ' 000s 11,572 11,186 15,641 15,832 16,932 16,545 16,123
Capacity utilization % 63.10 59.81 80.73 78.03 83.29 85.11 85.12
Capital expenditure Rs. ' 000s 309,746 417,237 482,170 387,501 311,326 177,751 340,725

Contribution to the National Exchequer Rs. ' 000s 2,633,142 2,251,024 3,101,414 2,662,527 2,486,279 2,420,794 2,205,089

11
Donated 1513 pairs of shoes to the orphan / abandoned Furnished a classroom in Mumtaz Girls High School
children living in SOS Villages. Lahore and distributed uniforms and sweaters to 250
students.

Distributed uniforms and books among 650 children

studying in different schools.

14
To impart our role for better environment, Go Green A Water Filtration Plant was built at Ghurki Teaching
(Tree Plantation) campaign was launched and inspired Hospital Lahore in order to provide clean & safe
our employees and their children. drinking water for the patients and their attendants.

15
 Value Added and Its Distribution

To Buy Material, Finished Goods and Services

65.6%
To Employees Salaries, Wages and Benefits
11.7%
To Government Income Tax, Sales Tax, Custom
& Excise Duties, Wwf, Wppf, Eobi, Social
Security, Professional and Local Taxes
14.5%
Finance Cost
4.0%
To Shareholders Dividend
4.2%
Retained in Business for Retail Expansion and
Operations
0.0%

2021 2020
Revenue Generated Rs. '000s % Rs. '000s %
Sales 17,845,728 15,084,541
Other income 315,753 473,283
18,161,481 100% 15,557,824 100%
Revenue Distributed
To Buy Materials, Finished Goods and Services 11,915,076 65.6% 10,158,749 65.3%
To Employees
Salaries, wages and benefits 2,138,615 11.7% 1,893,331 12.2%
To Government
Income Tax, Sales Tax, Custom & Excise Duties, WWF,
WPPF, EOBI, Social Security, Professional and Local Taxes
2,633,142 14.5% 2,251,024 14.5%
Finance Cost 718,648 4.0% 801,120 5.1%
To Shareholders
Dividend 756,000 4.2% 453,600 2.9%
Retained in Business
For Retail Expansion and Operations – 0.0% – 0.0%
18,161,481 100.0% 15,557,824 100.0%

16
 Operational Statistics

(Rupees in million) (Rupees in million)

Total Turnover (Gross) Domestic Turnover (Gross)
25,000 25,000
21,640 21,578
19,842 19,783
20,000 18,320 17,845
20,000 18,247 17,805
15,084 15,053
15,000 15,000

10,000 10,000

5,000 5,000

0 0
2017 2018 2019 2020 2021 2017 2018 2019 2020 2021

(Rupees in million) (Rupees in million)

Export Turnover (Gross) Total Turnover (Gross)
80 2,000
72.1 1,524 1,501
70
62.4 1,500
58.5
60 1,088
1,000
50
40.2 546
40 500
31.5
30
0
20
-500
10 (627)
72.1 58.5 62.4 31.5 40.2
0 -1,000
2017 2018 2019 2020 2021 2017 2018 2019 2020 2021

17
 Chairman’s Review Report
On Board’s overall Performance u/s 192 of the Companies Act 2017
Bata Pakistan Limited complies with all the requirements set out in the Companies Act, 2017 and the Listed Companies (Code of Corporate Governance)
Regulations, 2017 with respect to the composition, procedures and meetings of the Board of Directors and its committees. As required under the Code of
Corporate Governance, an annual evaluation of the Board of Directors of (the “Board”) of Bata Pakistan Limited (the “Company”) is carried out. The purpose
of this evaluation is to ensure that the Board’s overall performance and effectiveness is measured and benchmarked against expectations in the context of
objectives set for the Company. Areas where improvements are required are duly considered and action plans are framed and implemented.

For the Purpose of Board evaluation, a comprehensive criteria has been developed. The Board has recently completed its annual self-evaluation for the year
ended December 31, 2021 and I report that:

The overall performance of the Board measured on the basis of approved criteria for the year was satisfactory.

The overall assessment as satisfactory is based on an evaluation of the following integral components, which have a direct bearing on the Board’s role in
achievement of Company’s objectives:

1. Vision, mission and values:

The Board members are familiar with the current vision, mission and values and support them. The Board revisits the mission and vision statement from
time to time.

2. Engagement in strategic planning:

The Board has a clear understanding of the stakeholders (shareholders, customers, employees, vendors, society at large) whom the Company serves.
The Board has a strategic vision of how the Organization should evolve over the next three to five years. Further, the Board sets annual goals and targets
for the management in all major performance areas.

3. Diligence:
The Board members diligently performed their duties and thoroughly reviewed, discussed and approved business strategies, corporate objectives,
plans, budgets, financial statements and other reports. It received clear and succinct agendas and supporting written material in sufficient time prior to
Board and committee meetings. The Board met frequently enough to adequately discharge its responsibilities.

4. Monitoring of Organization’s business activities:

The Board remained updated with respect to achievement of Company’s objectives, goals, strategies and financial performance through regular
presentations by the management, internal and external auditors and other independent consultants. The Board provided appropriate direction and
oversight on a timely basis.

5. Diversity and mix:

The Board members effectively bring the diversity to the Board and constitute a mix of independent and non-executive directors. The non-executive
and independent directors were equally involved in important board decisions.

6. Governance and Control Environment:

The Board has effectively set the tone at the top, by putting in place a transparent and robust system of governance. This is reflected by setting up
an effective control environment, compliance with best practices of Corporate Governance and by promoting ethical and fair behaviour across the
Company.

Batapur: ROBERTO LONGO

LAHORE: MARCH 02, 2022 CHAIRMAN

18
19
20
21
 DIRECTORS’ REPORT TO THE MEMBERS
Directors are pleased to submit this report and financial statements of the Company for the year ended December 31, 2021.

1. Principal Activity
The principal activity of the Company is manufacturing and sale of footwear of all kinds along with sale of accessories and hosiery
items.

2. Holding Company
The parent company of Bata Pakistan Limited is Bafin B. V. situated in Nederland, whereas the ultimate parent entity is Compass
Limited, Bermuda.

3. Financial results
A brief financial analysis is presented as under:

Operating Results 2021 2020 Increase / (Decrease)

Amount in (000's)
Turnover 17,845,728 15,084,541 18.30%
Net Turnover 13,983,497 11,710,771 19.41%
Gross Profit 6,475,390 4,370,967 48.15%
Gross Profit % 46.31% 37.32% 8.98%
Distribution Costs 4,004,374 3,749,248 6.80%
Administrative Expenses 1,130,745 1,113,188 1.58%
Operating Profit 1,525,927 (106,928) 1527.06%
Profit After Tax 546,089 (627,345) 187.05%
Earnings per Share - Rupees 72.23 (82.98) 187.05%

4. Financial Results and Developments
The Company’s business achieved net turnover of Rs. 13.983 billion showing a growth of 19% over last year. The gross profit was
recorded at Rs. 6.475 billion against last year of Rs. 4.371 billion. Operating profit was Rs. 1.526 billion against Operating loss of Rs.
106.928 million of last year. Profit after taxation was Rs. 546.089 million compared to Loss after tax of Rs. 627.345 million of last
year. The Company achieved earnings per share of Rs. 72.23 against Loss per share of Rs. 82.98 of last year.

Our retail division continues to grow with the current setup along with the new stores and achieved a growth of 21%. In order to
sustain this growth and to provide friendly and modern atmosphere in the stores, an amount of Rs. 38 million has been spent to open
new stores and to renovate existing stores at key business locations. Much of the expansion was focused on our modern format of
stores concept.

The Company has an effective cash flow management system in place whereby cash inflows and outflows are projected on regular
basis. The profit on short term investments and bank deposits along with income/discounts from early payment to suppliers was Rs.
115.171 million. The Board is satisfied that there are no short or long term financial constraints at the close of the year.

As a result of the COVID-19 pandemic, rent concessions have been granted to lessees. Such concessions might take a variety of
forms, including payment holidays and deferral of lease payments. In May 2020, the IASB made an amendment to IFRS 16 Leases
which provides lessees with an option to treat qualifying rent concessions in the same way as they would if they were not lease
modifications. In many cases, this will result in accounting for the concessions as variable lease payments in the period in which they
are granted.

Entities applying the practical expedients must disclose this fact, whether the expedient has been applied to all qualifying rent
concessions or, if not, information about the nature of the contracts to which it has been applied, as well as the amount recognised
in profit or loss arising from the rent concessions.

The relief was originally limited to reduction in lease payments that were due on or before 30 June 2021. However, the IASB
subsequently extended this date to June 30, 2022.

If a lessee already applied the original practical expedient, it is required to continue to apply it consistently, to all lease contracts with
similar characteristics and in similar circumstances, using the subsequent amendment. If a lessee did not apply the original practical
expedient to eligible lease concessions, it is prohibited from applying the expedient in the 2021 amendment. Since the Company had

22
 already applied the original practical expedient, therefore, it continues to apply it. As a result the Company has accounted for rent
concessions amounting to Rs. 172.351 million (2020: Rs. 376.280 million) as ‘other income’ (note 37) in the financial statements.

The growth of our business is highly dependent on the skills imparted to our personnel through sound training. The Company
has invested a considerable time and money on human resource during the period to acquire latest developments in the field of
technology and business administration. This would be the ongoing process for future periods. Training of our employees has always
been considered as an investment for the future with the objective to provide them with safe and healthy working environment.

5. Earning per share
Earning per share for the year ended December 31, 2021 was Rs. 72.23 as against Loss per share of Rs. 82.98 of the preceding
year.

6. Appropriation of Profit
The financial results of the Company are as under:

Year ended December 31, 2021

Rs. ('000)
Profit before taxation 807,279
Less: Provision for taxation
Current 186,714
Prior years (14,543)
Deferred 89,019
261,190
Profit after tax 546,089

Unappropriated profit brought forward from last year (660,484)
Experience adjustments - Employee Benefits (3,267)
Profit available for appropriations (117,662)

Interim dividend 2021 @ Rs. 100.00 per share (756,000)
Final dividend 2021 @ Rs. 00.00 per share –
Transfer to general reserve –
(756,000)
Unappropriated profit carried forward (873,662)

The directors in their meeting held on March 02, 2022 have also proposed a final cash dividend Rs 0.00 per share (2020: Final dividend
Rs. 00.00 per share).

7. Principal Risk and Uncertainties
The Company is exposed to certain inherent risks and uncertainties. However, we consider the following as key risks:
• Significant competition in our product categories;
• Adverse movement in foreign exchange rates and commodity prices; and
• Litigation risks involving significant cases against the company.

The Company works with internal and external stakeholders to mitigate/reduce to acceptable level the likely impacts of aforesaid
risks.

8. Corporate Social Responsibility
“A Water Filtration Plant was built at Ghurki Teaching Hospital Lahore in order to provide clean & safe drinking water for the
patients and their attendants. Donated 1328 pairs of shoes to the underprivileged children studying in different schools. Distributed
uniforms and books among 650 children studying in different schools. To impart our role for better environment, Go Green (Tree
Plantation) campaign was launched and inspired our employees and their children. Celebrated Independence Day with the children
of a local school and distributed gifts amongst them. Donated 1513 pairs of shoes to the orphan / abandoned children living in
SOS Villages. Furnished a classroom in Mumtaz Girls High School Lahore and distributed uniforms and sweaters to 250 students.

23
 In the wake of our initiatives towards employees’ health care, we arranged Covid Vaccination camps at Batapur and Maraka where
727 employees and their family members got vaccinated. As part of Polio Eradication Campaign, we arranged an immunization camp
at Bata Dispensary along with door-to-door polio vaccination drive in Bata residential colony where 224 children aged under 5 years
were vaccinated against polio.

Arranged free blood screening camp at Bata Colony No. 3 where our medical team screened more than 500 children, their parents
and local community against diabetes, cholesterol, uric acid and Hepatitis B & C.

9. Environmental Impact
In order to impart our role for better environment, we planted more than 2,700 trees / saplings at Batapur and Branch Factory Maraka

10. Future Outlook
Despite the tough economic environment especially slow down in economy and high inflation, Company remains fully committed
and optimistic about the future growth of the business where it try to present best products along with excellent shopping experience
to its customers.

11. Internal Financial Controls
The Directors and management are responsible for the Company’s system of internal controls and for reviewing annually its
effectiveness in providing shareholders with a return on their investments that is consistent with a responsible assessment and
management of risks. This includes reviewing financial, operational and compliance controls and risk management procedures and
their effectiveness. The Directors have completed their annual review and assessment for the year ended December 31, 2021.

The Board and Audit Committee regularly review reports of the internal audit function of the Company related to the Company’s
control framework in order to satisfy the internal control requirements. The Company’s internal audit function performs reviews of
the integrity and effectiveness of control activities and provides regular reports to the Audit Committee and the Board.

12. Compliance with Listed Companies (Code Of Corporate Governance) Regulations, 2019 (the Regulations)

The requirements of the Regulations relevant for the year ended December 31, 2021 have been adopted by the Company and have
been fully complied with. A statement to this effect is annexed to the Report.

13. Corporate and Financial Reporting Framework
The Directors of your company state that:

a) The financial statements together with the notes thereon have been drawn up in conformity with the Companies Act, 2017 and
International Financial Reporting Standards, as applicable in Pakistan. These statements present fairly the Company’s state of
affairs, the results of its operations, cash flows and changes in equity.
b) Proper books of account of the Company have been maintained.
c) Appropriate accounting policies have been consistently applied in the preparation of financial statements and accordingly
estimates are based on reasonable and prudent judgment. Change in accounting policy, if any has been adequately disclosed.
d) International Financial Reporting Standards, as applicable in Pakistan, have been followed in the preparation of financial
statements.
e) The system of internal controls is sound in design and has been effectively implemented and is being consistently reviewed by
the internal audit department.
f) There are no significant doubts upon the Company’s ability to continue as a going concern.
g) There has been no material departure from the best practices of corporate governance as detailed in listing regulations of
Pakistan Stock Exchange.
h) Key operating and financial data of last six years is annexed to this report.
i) Information about taxes and levies outstanding as at December 31, 2021 is given in the notes to the annexed financial
statements.
j) The valuation of investment made by the Provident Fund Trust Rs. 1.300 billion as on December 31, 2021 as per audited
accounts.
k) No trading in the shares of the Company was carried out by the Directors, CEO, CFO and Company Secretary, their spouses
and minor children.

24
 14. Composition of Board
The board consists of eight (08) male and one (01) female directors with following composition:

Independent directors * 3
Other non-executive directors 3
Executive directors 3

* This includes one female director

The Board held six (6) meetings during the year. Attendance by each Director was as follows:


Directors’ Name Meetings Attended
Eligible to attend

Mr. Roberto Longo

( Chairman of the Board) Non - Executive Director 5 6
Mr. Muhammad Imran Malik Executive Director 6 6
Mr. Amjad Farooq Executive Director 6 6
Mr. Syed Asad Ali Zaidi Executive Director 5 6
Mr. Toh Guan Kiat Non - Executive Director 6 6
Mr. Aamir Amin Non - Executive Director 6 6
Mr. Muhammad Maqbool Independent Director 6 6
Mr. Kamal Monnoo Independent Director 5 6
Ms. Fatima Asad Khan Independent Director 5 6

Leave of absence was granted to directors who could not attend some of the Board meetings.

Mr. Hafiz Mudassar Hassan Kamran resigned from the position as Company Secretary and Ms. Mahnoor Ather was appointed as
Company Secretary of the Company.

The Company has already met the criteria specified in the Regulations till December 31, 2021 pertaining to Directors’ training
program. Therefore, no such training program was conducted during the year.

15. Remuneration of Directors and Chief Executive
The Company shall not pay remuneration to its non-executive directors including independent directors except for meeting fee for
attending Board and its Committees meetings. The Company will reimburse or incur expenses of travelling and accommodation of
Directors in relation to attending of Board and its Committees meetings. The Directors’ Policy will be reviewed and approved by
the Board of Directors from time to time. Details of aggregate amount of remuneration separately of chief executive, executive
directors and non- executive directors, including salary/fee, perquisites, benefits and performance-linked incentives are disclosed in
note 43 of the financial statements.

16. Audit Committee
The Audit Committee held four (4) quarterly meetings during the year. Attendance by each member was as follows:

Meetings Attended Eligible to attend
Mr. Muhammad Maqbool Chairman 4 4
Mr. Roberto Longo Member 1 4
Mr. Aamir Amin Member 4 4
Mr. Toh Guan Kiat Member 4 4

Mr. Hafiz Mudassar Hassan Kamran resigned from the position as Secretary Audit Committee and Ms. Mahnoor Ather was appointed
as Secretary Audit Committee of the Company.

The Audit Committee reviewed the quarterly, half yearly and annual financial statements before submission to the Board and their
publication. CFO, Head of Internal Audit and a representative of external auditors attended the meetings where issues relating to
accounts and audit were discussed. The Audit Committee also reviewed internal audit findings and held separate meetings with internal
and external auditors as required under the Listed Companies (Code Of Corporate Governance) Regulations, 2019 (the Regulations).
The Audit Committee also discussed with the external auditors their letter to the management. Related party transactions were also
placed before the Audit Committee prior to approval of the Board.

25
17. Human Resource and Remuneration Committee
The HR Committee held Four (04) meetings during the year. Attendance by each member was as follows:

Meetings Attended Eligible to attend
Ms. Fatima Asad Khan Chairperson 4 4
Mr. Muhammad Imran Malik Member 4 4
Mr. Toh Guan Kiat Member 4 4

Mr. Hafiz Mudassar Hassan Kamran resigned from the position as Secretary Human Resource and Remuneration Committee and Mr.
Muhammad Anwar Siddiqui was appointed as Secretary Human Resource and Remuneration Committee of the Company.

18. Auditors
The present Auditors, Messrs. A.F. Ferguson & Co., Chartered Accountants retire and offer themselves for re-appointment. The
Board of Directors, on recommendation of Audit Committee, proposes the re-appointment of Messrs. A.F. Ferguson & Co.,
Chartered Accountants, for the year ending December 31, 2021.

19. The Pattern of Shareholding
The pattern of shareholding as on December 31, 2021 and its disclosure according to the requirement of Listed Companies (Code
Of Corporate Governance) Regulations, 2019 (the Regulations) is annexed to this report.

20. Subsequent Events
No material changes and commitments affecting the financial position of the Company have occurred between the end of the
financial year to which these financial statements relate and the date of directors’ report.

21. Related Party Transactions
The transactions with the related parties and associated undertakings were placed before Audit Committee and upon its
recommendations were approved by the Board of Directors.

22. Acknowledgement
We take this opportunity to express our gratitude and appreciation to our customers for their confidence in our products, our
employees for their efforts and all other stakeholders for their continued support.

On behalf of the
BOARD OF DIRECTORS

Place: Batapur, Lahore MUHAMMAD IMRAN MALIK

Date: March 02, 2022 DIRECTOR CHIEF EXECUTIVE

26
27
28
29
30
31
32
33
 STATEMENT OF COMPLIANCE WITH LISTED COMPANIES
(CODE OF CORPORATE GOVERNANCE) REGULATIONS, 2019
Name of Company: Bata Pakistan Limited
Year ended: December 31,2021

The company has complied with the requirements of the Listed Companies (Code of Corporate Governance) Regulations, 2019
('Regulations') in the following manner:

1. The total number of directors are Nine (09) as per the following,-

a) Male Eight (08)
b) Female One (01)

2. The composition of the Board is as follows:

Category Names
i. Independent directors Mr. Muhammad Maqbool
Mr. Kamal Monnoo
Ms. Fatima Asad Khan
ii. Non-executive directors Mr. Roberto Longo
Mr. Toh Guan Kiat
Mr. Aamir Amin
iii. Executive directors Mr. Muhammad Imran Malik
Mr. Amjad Farooq
Mr. Syed Asad Ali Zaidi
iv. Female directors Ms. Fatima Asad Khan

3. The directors have confirmed that none of them is serving as a director on more than seven listed companies, including this
company;

4. The company has prepared a code of conduct and has ensured that appropriate steps have been taken to disseminate it
throughout the company along with its supporting policies and procedures;

5. The Board has developed a vision/mission statement, overall corporate strategy and significant policies of the company.
The Board has ensured that complete record of particulars of the significant policies along with their date of approval or
updating is maintained by the company;

6. All the powers of the Board have been duly exercised and decisions on relevant matters have been taken by the Board/
shareholders as empowered by the relevant provisions of the Act and these Regulations;

7. The meetings of the Board were presided over by the Chairman and, in his absence, by a director elected by the Board for
this purpose. The Board has complied with the requirements of Act and the Regulations with respect to frequency, recording
and circulating minutes of meeting of the Board;

8. The Board have a formal policy and transparent procedures for remuneration of directors in accordance with the Act and
these Regulations;

9. The company has already met the criteria specified in the Regulations pertaining to Director's training program. Therefore,
no such training program was conducted during the year.

10. The Board has approved appointment of chief financial officer, company secretary and head of internal audit, including
their remuneration and terms and conditions of employment and complied with relevant requirements of the Regulations;

11. Chief financial officer and chief executive officer duly endorsed the financial statements before approval of the Board;

34
12. The Board has formed Committees comprising of members given below:

a) Audit Committee
1. Mr. Muhammad Maqbool (Chairman)
2. Mr. Roberto Longo
3. Mr. Aamir Amin
4. Mr. Toh Guan Kiat

b) Human Resource and Remuneration Committee
1. Ms. Fatima Asad Khan (Chairperson)
2. Mr. Muhammad Imran Malik
3. Mr. Toh Guan Kiat

13. The terms of reference of the aforesaid committees have been formed, documented and advised to the committee for
compliance;

14. The frequency of meetings (quarterly / half yearly / yearly) of the Committees were as per following:

a) Audit Committee
Four quarterly meetings were held during the financial year ended December 31, 2021

b) Human Resource and Remuneration Committee
Four meetings were held during the financial year ended December 31, 2021

15. The Board has set up an effective internal audit function;

16. The statutory auditors of the company have confirmed that they have been given a satisfactory rating under the Quality
Control Review program of the Institute of Chartered Accountants of Pakistan and registered with Audit Oversight Board of
Pakistan, that they and all their partners are in compliance with International Federation of Accountants (IFAC) guidelines
on code of ethics as adopted by the Institute of Chartered Accountants of Pakistan and that they and the partners of the firm
involved in the audit are not a close relative (spouse, parent, dependent and non-dependent children) of the chief executive
officer, chief financial officer, head of internal audit, company secretary or director of the company;

17. The statutory auditors or the persons associated with them have not been appointed to provide other services except in
accordance with the Act, these Regulations or any other regulatory requirement and the auditors have confirmed that they
have observed IFAC guidelines in this regard; and

18. We confirm that all requirements of regulations 3, 6, 7, 8, 27,32, 33 and 36 of the Regulations have been complied with.

Batapur: ROBERTO LONGO

LAHORE: March 02, 2022 CHAIRMAN

35
36
37
 INDEPENDENT AUDITOR’S REVIEW REPORT
To the members of Bata Pakistan Limited

Review Report on the Statement of Compliance contained in Listed Companies (Code of Corporate
Governance) Regulations, 2019

We have reviewed the enclosed Statement of Compliance with the Listed Companies (Code of Corporate
Governance) Regulations, 2019 (the Regulations) prepared by the Board of Directors of Bata Pakistan Limited
for the year ended December 31, 2021 in accordance with the requirements of regulation 36 of the Regulations.

The responsibility for compliance with the Regulations is that of the Board of Directors of the Company. Our
responsibility is to review whether the Statement of Compliance reflects the status of the Company's compliance
with the provisions of the Regulations and report if it does not and to highlight any non-compliance with the
requirements of the Regulations. A review is limited primarily to inquiries of the Company's personnel and
review of various documents prepared by the Company to comply with the Regulations.

As a part of our audit of the financial statements we are required to obtain an understanding of the accounting
and internal control systems sufficient to plan the audit and develop an effective audit approach. We are not
required to consider whether the Board of Directors' statement on internal control covers all risks and controls
or to form an opinion on the effectiveness of such internal controls, the Company's corporate governance
procedures and risks.

The Regulations require the Company to place before the Audit Committee, and upon recommendation of the
Audit Committee, place before the Board of Directors for their review and approval, its related party transactions.
We are only required and have ensured compliance of this requirement to the extent of the approval of the
related party transactions by the Board of Directors upon recommendation of the Audit Committee.

Based on our review, nothing has come to our attention which causes us to believe that the Statement of Compliance
does not appropriately reflect the Company's compliance, in all material respects, with the requirements contained
in the Regulations as applicable to the Company for the year ended December 31, 2021.

A.F. Ferguson & Co.

Chartered Accountants
Name of engagement partner: Amer Raza Mir
Lahore
Date: April 01, 2022
UDIN: CR202110118i8vFtMo6z

A. F. FERGUSON & CO., Chartered Accountants, a member firm of the PwC network
23-C, Aziz Avenue, Canal Bank, Gulberg-V, P.O.Box 39, Lahore-54660, Pakistan
Tel: +92 (42) 3571 5868-71 / 3577 5747-50-37; Fax: +92 (42) 3577 5754 www.pwc.com/pk

• Karachi • Lahore • Islamabad

38
40
41
INDEPENDENT AUDITOR'S REPORT
To the members of Bata Pakistan Limited
Report on the Audit of the Financial Statements
Opinion
We have audited the annexed financial statements of Bata Pakistan Limited (the Company), which comprise the statement of financial position as at December
31, 2021, and the statement of profit or loss and other comprehensive income, the statement of changes in equity, the statement of cash flows for the year
then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information, and we state
that we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of the audit.

In our opinion and to the best of our information and according to the explanations given to us, the statement of financial position, statement of profit or
loss and other comprehensive income, the statement of changes in equity and the statement of cash flows together with the notes forming part thereof
conform with the accounting and reporting standards as applicable in Pakistan and give the information required by the Companies Act, 2017 (XIX of 2017),
in the manner so required and respectively give a true and fair view of the state of the Company’s affairs as at December 31, 2021 and of the profit and other
comprehensive loss, the changes in equity and its cash flows for the year then ended.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs) as applicable in Pakistan. Our responsibilities under those standards
are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company
in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants as adopted by the Institute of
Chartered Accountants of Pakistan (the Code) and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matter

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.

Following is the Key audit matter:

S. No. Key audit matter How the matter was addressed in our audit
1 Contingent Taxation Liabilities Our audit procedures included the following:
(Refer notes 5.2 and 31.1 to the financial statements) • Obtained and examined details of the pending tax matters and
The Company has contingent liabilities in respect of various income discussed the same with the Company’s management;
and sales tax matters, which are pending adjudication before the • Circularized confirmations to the Company’s external tax
taxation authorities and the Courts of law. advisors for their views on open tax assessments and matters.
Contingencies require management to make judgments and estimates Furthermore, examined prior years’ precedents of outcomes in
in relation to the interpretation of laws, statutory rules, regulations favor of the Company at various forums related to matters under
and the probability of outcome and financial impact, if any, on the consideration which support the Company’s stance;
Company for disclosure and recognition and measurement of any • Examined correspondence of the Company with the relevant
provision that may be required against such contingencies. authorities including judgments or orders passed by the
Due to significance of amounts involved, inherent uncertainties with competent authorities in relation to the issues involved or
respect to the outcome of matters and use of significant management matters which have similarities with the issues involved;
judgments and estimates to assess the same including related financial • Involved in-house tax specialists to assess management’s
impacts, we considered contingent liabilities relating to income and conclusion on contingent tax matters and to evaluate the
sales tax, a key audit matter. consistency of such conclusions with the views of the
management and external tax advisors engaged by the Company;
and
• Assessed the adequacy and appropriateness of disclosures made
in respect of such income and sales tax matters.

A. F. FERGUSON & CO., Chartered Accountants, a member firm of the PwC network
23-C, Aziz Avenue, Canal Bank, Gulberg-V, P.O.Box 39, Lahore-54660, Pakistan
Tel: +92 (42) 3571 5868-71 / 3577 5747-50-37; Fax: +92 (42) 3577 5754 www.pwc.com/pk

• Karachi • Lahore • Islamabad

42
Information Other than the Financial Statements and Auditor’s Report Thereon
Management is responsible for the other information. The other information comprises the information included in the annual report, but does not include
the financial statements and our auditor’s report thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We
have nothing to report in this regard.

Responsibilities of Management and Board of Directors for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the accounting and reporting standards as
applicable in Pakistan and the requirements of Companies Act, 2017 (XIX of 2017) and for such internal control as management determines is necessary to
enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so.

Board of directors are responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs as applicable in Pakistan will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken
on the basis of these financial statements.

As part of an audit in accordance with ISAs as applicable in Pakistan, we exercise professional judgement and maintain professional skepticism throughout
the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a
material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements
or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements
represent the underlying transactions and events in a manner that achieves fair presentation.

43
We communicate with the board of directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings,
including any significant deficiencies in internal control that we identify during our audit.

We also provide the board of directors with a statement that we have complied with relevant ethical requirements regarding independence, and to
communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.

From the matters communicated with the board of directors, we determine those matters that were of most significance in the audit of the financial statements
of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

Based on our audit, we further report that in our opinion:

a) proper books of account have been kept by the Company as required by the Companies Act, 2017 (XIX of 2017);
b) the statement of financial position, the statement of profit or loss and other comprehensive income, the statement of changes in equity and the statement
of cash flows together with the notes thereon have been drawn up in conformity with the Companies Act, 2017 (XIX of 2017) and are in agreement with
the books of account and returns;
c) investments made, expenditure incurred and guarantees extended during the year were for the purpose of the Company’s business; and
d) zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980), was deducted by the Company and deposited in the Central Zakat
Fund established under section 7 of that Ordinance.

The engagement partner on the audit resulting in this independent auditor’s report is Amer Raza Mir.

A.F.Ferguson & Co.

Chartered Accountants

Lahore
Dated: April 01, 2022
UDIN: AR2021101183l4vc0JkD

44
STATEMENT OF FINANCIAL POSITION
AS AT DECEMBER 31, 2021

Note 2021 2020

(Rupees in ’000)
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 6 1,935,392 1,949,867
Right of use assets 7 3,427,313 3,685,232
Intangible assets 8 214,307 164,744
Long term investments 9 45,031 45,094
Long term deposits and prepayments 10 41,077 36,127
Deferred tax asset 11 434,129 521,813
6,097,249 6,402,877
CURRENT ASSETS
Stores and spare parts 12 – –
Stock in trade 13 3,978,771 2,812,812
Trade debts - unsecured 14 973,880 1,385,617
Advances - unsecured 15 283,015 116,006
Trade deposits and short term prepayments 16 293,418 167,995
Other receivables 17 411,658 266,933
Interest accrued 5,781 3,340
Short term investments 18 1,100,000 1,950,000
Tax refunds due from Government 19 350,161 350,161
Cash and bank balances 20 2,108,570 549,740
9,505,254 7,602,604
TOTAL ASSETS 15,602,503 14,005,481
EQUITY AND LIABILITY
SHARE CAPITAL AND RESERVES
Authorized share capital 21.1 100,000 100,000
Issued, subscribed and paid up capital 21.2 75,600 75,600
Reserves
Capital reserve 22 483 483
Revenue reserves 23 6,083,338 6,296,516
6,083,821 6,296,999
6,159,421 6,372,599
NON-CURRENT LIABILITIES
Lease liabilities 24 3,500,649 3,602,826
Long term deposits 25 26,353 24,788
Deferred liability - employee benefits 26 61,992 68,592
Long term borrowing 27 47,222 53,516
3,636,216 3,749,722
CURRENT LIABILITIES
Current portion of lease liabilities 24 911,572 871,711
Current portion of long term borrowing 27 6,296 6,743
Trade and other payables 28 4,073,404 2,774,550
Short term borrowings 29 – –
Provision for taxation 186,714 175,662
Unpaid dividend 30 568,587 –
Unclaimed dividend 60,293 54,494
5,806,866 3,883,160
CONTINGENCIES AND COMMITMENTS 31
TOTAL EQUITY AND LIABILITIES 15,602,503 14,005,481

The annexed notes 1 to 52 form an integral part of these financial statements.

Chief Executive Chief Financial Officer Director

48
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED DECEMBER 31, 2021

Note 2021 2020

(Rupees in ’000)

Sales 32 13,983,497 11,710,771

Cost of sales 33 (7,508,107) (7,339,804)
Gross profit 6,475,390 4,370,967

Distribution cost 34 (4,004,374) (3,749,248)
Administrative expenses 35 (1,130,745) (1,113,188)
Other expenses 36 (130,097) (88,743)
Other income 37 315,753 473,283
Finance costs 38 (718,648) (801,120)
Profit / (loss) before taxation 807,279 (908,049)
Taxation 39 (261,190) 280,704
Profit / (loss) after taxation 546,089 (627,345)

OTHER COMPREHENSIVE INCOME
Items that will not be reclassified to profit or loss
Remeasurement of defined benefit liability - net of tax (3,267) 8,955
Items that may be reclassified subsequently to profit or loss – –
Other comprehensive (loss) / income for the year (3,267) 8,955

Total comprehensive income / (loss) for the year 542,822 (618,390)

Earnings / (loss) per share - basic and diluted (Rupees per share) 40 72.23 (82.98)


The annexed notes 1 to 52 form an integral part of these financial statements.

Chief Executive Chief Financial Officer Director

49
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED DECEMBER 31, 2021

Revenue reserve
Share Capital General Unappropriated
capital reserve reserve profits / (losses) Total
(Rupees in ‘000)

Balance as at January 01, 2020 75,600 483 6,957,000 411,506 7,444,589
Total comprehensive loss for the year – – – (618,390) (618,390)
Transactions with owners in their capacity as owners:
Final dividend for 2019 @ Rs. 60.00 per share – – – (453,600) (453,600)
Balance as at December 31, 2020 75,600 483 6,957,000 (660,484) 6,372,599
Total comprehensive income for the year – – – 542,822 542,822
Transactions with owners in their capacity as owners:
Interim dividend for 2021 @ Rs. 100.00 per share – – – (756,000) (756,000)
Balance as at December 31, 2021 75,600 483 6,957,000 (873,662) 6,159,421


The annexed notes 1 to 52 form an integral part of these financial statements.

Chief Executive Chief Financial Officer Director

50
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2021

Note 2021 2020

CASH GENERATED FROM OPERATING ACTIVITIES (Rupees in ’000)

Profit / (loss) before taxation 807,279 (908,049)

Adjustments for:
Depreciation of property, plant & equipment 6.2 278,815 273,591
Depreciation of right of use assets 7 1,126,172 1,245,170
Amortization of intangible assets 8 31,888 256
Provision for gratuity 26.3 10,277 15,088
Loss on disposal of property, plant and equipment 6.5 9,554 60,202
Gain of settlement of leases on vacation of shops 37 (14,552) (22,728)
Rent concessions received 37 (172,351) (376,280)
Income from short term investments 37 (64,711) (8,840)
Income from long term investments 37 (3,074) (3,975)
Exchange loss 36 58,472 21,126
Interest / markup costs 38 670,982 764,573
Early payment discount on supplier invoices 37 (17,409) (3,209)
(Reversal of) / charge of loss allowance of trade debts 34 (3,583) 274,046
Loss allowance of advances to suppliers 15 6,930 –
(Reversal of) / provision for slow moving and obsolete stock - net 13.4 (28,386) 70,368
Provision for / (reversal of) obsolescence of raw material - net 13.1 18,121 (1,687)
Reversal of provision for obsolescence of stores and spare parts - net 12.1 (2,651) (2,427)
1,904,494 2,305,274
Operating profit before working capital changes 2,711,773 1,397,225
Effect on cash flow due to working capital changes:
(Increase) / decrease in current assets:
Stores and spare parts 2,651 2,967
Stock in trade (1,155,694) 1,173,834
Trade debts - unsecured 415,320 961,599
Advances - unsecured (173,939) 151,632
Trade deposits and short term prepayments (125,423) (133,254)
Other receivables 10,327 12,944
(1,026,758) 2,169,722
Increase in current liabilities:
Trade and other payables 1,254,823 33,793
Cash generated from operations 2,939,838 3,600,740
Interest / markup costs paid 38 (670,982) (764,573)
Taxes paid 17.1 (316,171) (198,481)
Gratuity paid 26.2 (21,479) (17,360)
(1,008,632) (980,414)
(Increase) / decrease in long term deposits and prepayments (3,385) 3,228
Net cash generated from operating activities 1,927,821 2,623,554
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (114,209) (73,289)
Investment in capital work in progress 6.3 (174,190) (346,011)
Acquisition of intangible assets (81,451) (120,672)
Proceeds from sale of property, plant and equipment 6.5 14,505 2,537
Decrease / (increase) in long term investments 63 (62)
Interest income received 65,344 10,699
Net cash used in investing activities (289,938) (526,798)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid (181,614) (453,786)
Long term borrowings obtained – 60,259
Repayment of long term loan (6,741) –
Lease payments (743,666) (477,392)
Net cash used in financing activities (932,021) (870,919)
Net increase in cash and cash equivalents 705,862 1,225,837
Cash and cash equivalents at the beginning of the year 2,499,740 1,273,248
Effects of exchange rate changes on cash and cash equivalents 2,968 655
Cash and cash equivalents at the end of the year 42 3,208,570 2,499,740

The annexed notes 1 to 52 form an integral part of these financial statements.

Chief Executive Chief Financial Officer Director

51
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021

1 LEGAL STATUS AND OPERATIONS

Bata Pakistan Limited (the Company) was incorporated in Pakistan as a public limited company and its shares are quoted on Pakistan Stock Exchange.
The registered office of the Company is situated at Batapur, Lahore. The principal activity of the Company is manufacturing and sale of footwear of all
kinds along with sale of accessories and hosiery items. The parent company of Bata Pakistan Limited is Bafin B.V. (Nederland), whereas the ultimate
parent is Compass Limited, Bermuda. Furthermore, the Company has the following production facilities:

Sr. No Business Units Geographical Location
1 Batapur Factory G.T. Road, P.O. Batapur, Lahore
2 Maraka Factory 26 - km, Multan Road, Lahore

The Company operates through retail outlets spread across the country with 8 outlets situated in Azad Kashmir, 6 in Balochistan,14 in Islamabad Capital
Territory, 2 in Gilgit Baltistan, 45 in Khyber Pakhtunkhwa, 302 in Punjab and 66 outlets in Sindh.

2 STATEMENT OF COMPLIANCE

2.1 These financial statements have been prepared in accordance with the accounting and reporting standards as applicable in Pakistan. The
accounting and reporting standards applicable in Pakistan comprise of:

i) International Financial Reporting Standards (‘IFRS’) issued by the International Accounting Standard
Board (IASB) as notified under the Companies Act, 2017; and
ii) Provisions of and directives issued under the Companies Act, 2017.

Where provisions of and directives issued under the Companies Act, 2017 differ from the IFRS, the provisions of and directives issued under the
Companies Act, 2017 have been followed.

2.2 Initial application of standards, amendments or an interpretation to existing standards
The following amendments to existing standards have been published that are applicable to the Company’s financial statements covering annual
periods, beginning on or after the following dates:

2.2.1 Standards, amendments and interpretations to approved accounting standards that are effective in current year or have been
early adopted by the Company
Certain standards, amendments and interpretations to IFRS are effective for accounting periods beginning on or after January 01, 2021 but
are considered not to be relevant to the Company’s operations (although they may affect the accounting for future transactions and events)
and are, therefore, not detailed in these financial statements, except for the following:

As a result of the COVID-19 pandemic, rent concessions have been granted to lessees. Such concessions might take a variety of forms,
including payment holidays and deferral of lease payments. In May 2020, the IASB made an amendment to IFRS 16 Leases which provides
lessees with an option to treat qualifying rent concessions in the same way as they would if they were not lease modifications. In many
cases, this will result in accounting for the concessions as variable lease payments in the period in which they are granted.

Entities applying the practical expedients must disclose this fact, whether the expedient has been applied to all qualifying rent concessions
or, if not, information about the nature of the contracts to which it has been applied, as well as the amount recognised in profit or loss arising
from the rent concessions.

The relief was originally limited to reduction in lease payments that were due on or before 30 June 2021. However, the IASB subsequently
extended this date to June 30, 2022.

If a lessee already applied the original practical expedient, it is required to continue to apply it consistently, to all lease contracts with similar
characteristics and in similar circumstances, using the subsequent amendment. If a lessee did not apply the original practical expedient to
eligible lease concessions, it is prohibited from applying the expedient in the 2021 amendment. Since the Company had already applied the
original practical expedient, therefore, it continues to apply it. As a result the Company has accounted for rent concessions amounting to
Rs. 172.351 million (2020: Rs. 376.280 million) as ‘other income’ (note 37) in the financial statements.

52
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021

2.2.2 Standards, amendments and interpretations to existing standards that are not yet effective and have not been early adopted
by the Company
There are certain standards, amendments to the accounting standards and interpretations that are mandatory for the Company’s
accounting periods beginning on or after January 01, 2022 but are considered not to be relevant to the Company’s operations and are,
therefore, not detailed in these financial statements, except for the following:

(a) Amendments to IAS 16, ‘Property plant and equipment’
The amendment to IAS 16 Property, Plant and Equipment (PP&E), effective for accounting periods beginning on or after January 01, 2022,
prohibits an entity from deducting from the cost of an item of PP&E any proceeds received from selling items produced while the entity is
preparing the asset for its intended use. It also clarifies that an entity is testing whether the asset is functioning properly when it assesses
the technical and physical performance of the asset. The financial performance of the asset is not relevant to this assessment. These
amendments are not expected to have a material impact on the Company’s financial statements when they become effective.

(b) Amendments to IAS 1, ‘Classification of liabilities as current or non-current’
The narrow-scope amendments to IAS 1 Presentation of Financial Statements, effective for accounting periods beginning on or after January
01, 2023, clarify that liabilities are classified as either current or non-current, depending on the rights that exist at the end of the reporting
period. Classification is unaffected by the expectations of the entity or events after the reporting date (e.g. the receipt of a waver or a breach
of covenant). The amendments also clarify what IAS 1 means when it refers to the settlement of a liability.

The amendments could affect the classification of liabilities, particularly for entities that previously considered management’s intentions to
determine classification and for some liabilities that can be converted into equity.

These amendments are not expected to have a material impact on the Company’s financial statements when they become effective.

(c) Amendments to IAS 1 and IFRS 2 Practice Statement 2, ‘Disclosure of Accounting Policies’
The IASB amended IAS 1 to require entities to disclose their material rather than their significant accounting policies. The amendments
define what is ‘material accounting policy information’ and explain how to identify when accounting policy information is material. They
further clarify that immaterial accounting policy information does not need to be disclosed. If it is disclosed, it should not obscure material
accounting information.

To support this amendment, the IASB also amended IFRS Practice Statement 2 Making Materiality Judgements to provide guidance on how
to apply the concept of materiality to accounting policy disclosures.

The above mentioned amendments are effective for accounting periods beginning on or after January 01, 2023.

The Company is in the process of assessing the impact of these amendment on the Company’s financial statements.

(d) Amendments to IAS 8, ‘Definition of Accounting Estimates’
The amendment to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, effective for accounting periods beginning on
or after January 01, 2023, clarifies how companies should distinguish changes in accounting policies from changes in accounting estimates.
The distinction is important, because changes in accounting estimates are applied prospectively to future transactions and other future
events, but changes in accounting policies are generally applied retrospectively to past transactions and other past events as well as the
current period.

The Company is in the process of assessing the impact of this amendment on the Company’s financial statements.

(e) Amendments to IAS 12, ‘Deferred Tax related to Assets and Liabilities arising from a Single Transaction’
The amendments to IAS 12 Income Taxes, effective for accounting periods beginning on or after January 01, 2023, require companies
to recognise deferred tax on transactions that, on initial recognition, give rise to equal amounts of taxable and deductible temporary
differences. They will typically apply to transactions such as leases of lessees and decommissioning obligations and will require the
recognition of additional deferred tax assets and liabilities.

The Company is in the process of assessing the impact of these amendments on the Company’s financial statements.

53
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021

3 BASIS OF PREPARATION
3.1 Basis of measurement
These financial statements have been prepared under the historical cost convention except as otherwise stated.

3.2 Presentation currency
These financial statements are presented in Pak Rupee, which is the Company’s functional currency. Figures have been rounded off to nearest
thousand of Rupees, unless otherwise stated.

4 SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS
The Company’s significant accounting policies are stated in note 5. Not all of these significant accounting policies require management to make difficult,
subjective or complex judgments or estimates. The following is intended to provide an understanding of the policies that management considers critical
because of the complexity, judgment of estimation involved in their application and their impact on these financial statements. Estimates and judgments
are continually evaluated and are based on historical experience, including expectations of future events that are believed to be reasonable under the
circumstances. These judgments involve assumptions or estimates in respect of future events and the actual results may differ from these estimates. The
areas involving a higher degree of judgments or complexity or areas where assumptions and estimates are significant to the financial statements are as
follows:

- Measurement of employee benefits - Note 5.1.

- Provision for current taxation - Note 5.2.

- Useful lives and residual values of property, plant and equipment - Note 5.3.

- Use of discount rates and interpretation of lease terms - Note 5.4.1.

- Provision for obsolescence of stock in trade - Note 5.9.

- Loss allowance for doubtful debts - Note 5.17.1.

5 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently
applied to all the years presented, unless otherwise stated.

5.1 Employee Benefits
The main features of the schemes operated by the Company for its employees are as follows:

Defined Benefit Plan

The Company operates an un-funded gratuity scheme covering all employees, excluding managerial staff. The entitlement to gratuity is determined
as follows:

a) For employees, who are members of the provident fund scheme, the provision is calculated with reference to 3 weeks’ basic salary for each
completed year of service.
b) For employees, who are not members of the provident fund scheme, provision is based on 30 days gross highest salaries / wages drawn
during the year for each completed year of service.

Actuarial valuation of defined benefit scheme is conducted annually and the most recent valuation was carried out as of December 31, 2021 using
projected unit credit method. The significant assumptions used are detailed in note 26.

The Company’s policy with regard to experience gains and losses is to recognize them as they occur in other comprehensive income under IAS
19 ‘Employee Benefits’.

Defined Contribution Plan
The Company operates two recognized provident fund schemes that are defined contribution plans for all of its employees. Equal monthly
contributions are made both by the Company and the employees to the Employees’ Provident Fund and Managerial Staff Provident Fund at the
rates of 8% and 10% of basic salary respectively.

54
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021

5.2 Taxation
Income tax expense comprises current and deferred tax. Income tax is recognized in the statement of profit or loss except to the extent that it
relates to items recognized directly in equity or other comprehensive income, in which case it is recognized in equity or other comprehensive
income as the case may be.

Current
Provision of current tax is based on the taxable income for the year determined in accordance with the prevailing law for taxation of income. The
charge for current tax is calculated using prevailing tax rates or tax rates expected to apply to profit for the year if enacted after taking into account
tax credits, rebates and exemptions, if any. The charge for current tax also includes adjustments, where considered necessary, to provision for
tax made in previous years arising from assessments framed during the year for such years. Where there is uncertainty in income tax accounting
i.e. when it is not probable that the tax authorities will accept the treatment, the impact of the uncertainty is measured and accounted for using
either the most likely amount or the expected value method, depending on which method better predicts the resolution of the uncertainty.
Such judgements are reassessed whenever circumstances have changed or there is new information that affects the judgements. Where, at the
assessment stage, the taxation authorities have adopted a different tax treatment and the Company considers that the most likely outcome will
be in favour of the Company, the amounts are shown as contingent liabilities. In making a judgment and / or estimate relating to probability
of outcome, the management considers laws, statutory rules, regulations and their interpretations. Where, based on management’s estimate, a
provision is required, the same is recorded in the financial statements.

Deferred
Deferred tax is accounted for using the liability method in respect of all temporary differences arising from differences between the carrying
amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of the taxable profit.
Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred tax assets are recognized to the extent that it is
probable that future taxable profits will be available against which the deductible temporary differences, unused tax losses and tax credits can be
utilized.

Deferred tax assets and liabilities are calculated at the rates that are expected to apply to the period when the asset is realized or the liability is
settled, based on the tax rates and tax laws that have been enacted or substantively enacted by the reporting date. Deferred tax is charged or
credited to the statement of profit or loss, except in the case of items charged or credited to equity or other comprehensive income, in which case
it is included in the statement of changes in equity or statement of other comprehensive income as the case may be.

5.3 Property, plant and equipment
Operating fixed assets except freehold land and leasehold land with superstructure are stated at cost less accumulated depreciation and any
identified impairment loss. Freehold land and leasehold land with superstructure is stated at cost less any identified impairment loss.

Depreciation is charged to the statement of profit or loss on the reducing balance method so as to write off the depreciable amount of an asset
over its estimated useful life at annual rates mentioned in note 6.2 after taking into account their residual values.

The assets’ useful lives and residual values are reviewed at each financial year end, and adjusted if impact on depreciation is significant.
The Company’s estimate of the residual value and useful life of its operating fixed assets as at December 31, 2021 has not required any
adjustment.

Depreciation on additions is charged from the month in which an asset is available for use while no depreciation is charged for the month in
which the asset is derecognized or retired from active use.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated
recoverable amount.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repair and
maintenance costs are charged to statement of profit or loss during the period in which they are incurred.

The Company assesses at each reporting date whether there is any indication that property, plant and equipment may be impaired. If such
indication exists, the carrying amounts of such assets are reviewed to assess whether they are recorded in excess of their recoverable amount.
Where carrying values exceed the respective recoverable amount, assets are written down to their recoverable amounts and the resulting
impairment loss is recognized in statement of profit and loss. The recoverable amount is the higher of an asset’s fair value less costs to sell and
value in use. Where an impairment loss is recognized, the depreciation charge is adjusted in the future periods to allocate the asset’s revised
carrying amount over its estimated useful life.

55
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021

Any change in estimates in future years might affect the carrying amounts of the respective items of property, plant and equipment and intangible
assets with a corresponding effect on the depreciation / amortization charge and impairment.

An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or
disposal. The gain or loss on disposal or retirement of an asset represented by the difference between the sale proceeds and the carrying amount
of the asset is recognized in the statement of profit or loss.

5.4 Leases
The Company is both the lessor and the lessee.

5.4.1 Lessee accounting
At inception of a contract, the Company assesses whether a contract is, or contains, a lease based on whether the contract conveys the right
to control the use of an identified asset for a period of time in exchange for consideration.

For leases which are not short term (of a period less than twelve months) or of low monetary value, the lease liability is initially measured at
the present value of the lease payments that are not paid at the commencement date. The lease payments are discounted using the interest
rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases of the Company, the lessee’s
incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an
asset of similar value to the right of use asset in a similar economic environment with similar terms, security and conditions.

To determine the incremental borrowing rate, the Company:

- where possible, uses the recent third party financing received by the Company as a starting point, adjusted to reflect the changes in
financing conditions since third party financing was received;

- uses expected terms of third party financing based on correspondence with the third party financial institutions, where third party financing
was not received recently; and

- makes adjustments specific to the lease e.g. terms and security.

Lease payments include fixed payments, variable lease payment that are based on an index or a rate, amounts expected to be payable
by the lessee under residual value guarantees, the exercise price of a purchase option if the lessee is reasonably certain to exercise that
option, payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option, less any lease incentives
receivable.

In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension
option or not to exercise a termination option. Extension options (or periods covered by termination options) are only included in the lease
term if the lease is reasonably certain to be extended (or not terminated). While making this assessment, the Company considers significant
penalties to terminate (or not extend) as well as the significant cost of business disruption.

The lease liability is subsequently measured at amortised cost using the effective interest rate method. It is remeasured when there is a
change in future lease payments arising from a change in fixed lease payments or an index or rate, change in the Company’s estimate of
the amount expected to be payable under a residual value guarantee, or if the Company changes its assessment of whether it will exercise
a purchase, extension or termination option. The corresponding adjustment is made to the carrying amount of the right of use asset, or
is recorded in profit and loss if the carrying amount of right of use asset has been reduced to zero. The rent concessions received by the
Company as a result of the COVID-19 Pandemic have been accounted for in accordance with the amendment to IFRS-16 as explained in
note 2.2.1

The right of use asset is initially measured based on the initial amount of the lease liability adjusted for any lease payments made at or
before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset
or to restore the underlying asset or the site on which it is located, less any lease incentive received. The right of use asset is depreciated
on a straight line method over the lease term as this method most closely reflects the expected pattern of consumption of future economic
benefits. The right of use asset is reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

Payments associated with short-term and low value leases are recognised on a straight line basis as an expense in the statement of profit or
loss.

56
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021

5.4.2 Lessor accounting

Lease income from operating leases where the Company is a lessor is recognized in income on a straight-line basis over the lease term.
Initial direct costs incurred in obtaining an operating lease are added to the carrying amount of the underlying asset and recognized as
expense over the lease term on the same basis as lease income. The respective leased assets are included in the statement of financial
position based on their nature.

5.5 Capital work in progress
All expenditure connected with specific assets incurred during installation and construction period and/or in transit are carried under capital work
in progress. These are transferred to specific assets as and when assets are available for use. Capital work in progress is stated at cost, less any
identified impairment loss.

5.6 Intangible assets
Expenditure incurred to acquire and develop the point of sale (POS) and computer software is capitalized as intangible assets and stated at cost
less accumulated amortization and any identified impairment loss.

Amortization is charged to statement of profit and loss using the straight line method, so as to write off the cost of an asset over its estimated
useful life. Amortization on additions is charged from the month in which an asset is acquired or capitalized while no amortization is charged in
the month of disposal. Amortization is being charged at the annual rate of 33.33% on computer software and 25.00% on POS software, on straight
line basis.

Useful lives of intangible operating assets are reviewed, at each date of statement of financial position and adjusted if the impact of amortization
is significant.

The Company assesses at each reporting date whether there is any indication that intangible asset may be impaired. If such indication exists, the
carrying amount of such assets are reviewed to assess whether they are recorded in excess of their recoverable amount. Where carrying values
exceed the respective recoverable amount, assets are written down to their recoverable amounts and the resulting impairment loss is recognized
in statement of profit and loss. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. Where an impairment
loss is recognized, the amortization charge is adjusted in the future periods to allocate the asset’s revised carrying amount over its estimated useful
life.

5.7 Investments
These represent investments with fixed maturity in respect of which Company has the positive intent and ability to hold till maturity. These are
initially recognized at cost including transaction costs and are subsequently carried at amortized cost.

5.8 Stores and spare parts
These are valued at lower of weighted average cost or net realizable value except for items in transit which are stated at invoice value along with
any other charges associated with buying the inventory for its intended use. The Company reviews the carrying amount of stores and spare parts
on a regular basis for provision for obsolescence.

Provision for obsolescence of stores and spare parts is made on the basis of management’s best estimate of usability of items and considering the
ageing analysis prepared on an item by item basis.

5.9 Stock in trade
Stock in trade is valued at the lower of cost and estimated net realizable value. Cost is determined as follows:

Raw material
Purchased – at weighted average cost
In transit – at actual cost

Goods in process – at production cost
Finished goods
Own production – at production cost on first in first out (FIFO) basis.
Purchased – at actual cost on first in first out (FIFO) basis
In transit – at actual cost

57
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021

Cost of work in process and finished goods comprises cost of direct materials, labor and related production overheads (based on normal
operating capacity). Net realizable value is based on estimated selling price in the ordinary course of business less estimated cost to completion
and estimated cost necessary to make the sale.

If the expected net realizable value is lower than the carrying amount, a write-down is recognized for the amount by which the carrying amount
exceeds its net realizable value. Provision is made in the financial statements for obsolete and slow moving stock in trade based on management’s
best estimate, considering the aging analysis prepared on an item by item basis.

5.10 Trade debts and other receivables
Trade debts and other receivables are recognised initially at the amount of consideration that is unconditional, unless they contain significant
financing component in which case such are recognised at fair value. The Company holds the trade debts with the objective of collecting the
contractual cash flows and therefore measures the trade debts subsequently at amortised cost using the effective interest rate method. The credit
period for wholesale customers of the company is normally 60 days.

Trade debts and other receivables are written off where there is no reasonable expectation of recovery. Indicators that there is no reasonable
expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the Company, and a failure to make
contractual payments for a period of greater than one year past due (considered as default).

5.11 Contingencies and commitments
Contingent liability is disclosed when:

– There is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non occurrence
of one or more uncertain future events not wholly within the control of the Company; or

– There is a present obligation that arises from past events but it is not probable that an outflow of resources embodying economic benefits
will be required to settle the obligation or the amount of the obligation cannot be measured with sufficient reliability.

Accounting policy in respect of contingent taxation liabilities is further elaborated in note 5.2.

5.12 Foreign currency transactions and translations
Transactions in foreign currencies are translated in Pakistan rupees (functional and presentation currency) at the exchange rate prevailing on the
date of transaction. Monetary assets and liabilities in foreign currencies are translated into Pakistan rupees at the rates of exchange approximating
those prevalent at the reporting date. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translations
of monetary assets and liabilities denominated in foreign currencies are recognized in the statement of profit or loss.

5.13 Borrowings
Loans and borrowings are initially recorded at the proceeds received. In subsequent periods, borrowings are stated at amortized cost using the
effective yield method. Finance cost is accounted for on an accrual basis and is included in accrued finance cost to the extent of the amount
remaining unpaid.

5.14 Provisions
Provisions are recognized when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow
of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the
obligation. Provisions are reviewed periodically and adjusted to reflect the current best estimates.

5.15 Revenue recognition
Revenue is recognised when performance obligations are satisfied by transferring control of a promised good to a customer and the control
transfers at a point in time. Revenue is measured at fair value of the consideration received or receivable excluding discounts allowed to customers.
A contract liability is recorded for advances received from customers against which performance obligations have not been satisfied.

The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer
and payment by the customer exceeds one year. As a consequence, the Company does not adjust any of the transaction prices for the time value
of money.

58
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021

The Company operates a loyalty programme where retail customers accumulate points for purchases made which entitle them to
discount on future purchases. A contract liability for the award points is recognized at the time of the sale. Revenue is recognized
when the points are redeemed or when they expire.

5.16 Cash and cash equivalents
Cash and cash equivalents are carried in the statement of financial position at cost. For the purposes of the statement of cash flows,cash and cash
equivalents consist of cash and bank balances, cheques in hand, deposits held at call with banks, and other short term highly liquid investments
with original maturities of three months or less which form an integral part of the Company’s cash management.

5.17 Financial Instruments
5.17.1 Financial assets
In accordance with the requirements of IFRS 9, the Company classifies its financial assets at amortised cost, fair value through other comprehensive
income or fair value through profit or loss on the basis of the Company’s business model for managing the financial assets and the contractual cash
flow characteristics of the financial asset.

a) Financial assets at amortised cost
Financial assets at amortised cost are held within a business model whose objective is to hold financial assets in order to collect contractual cash
flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest
on the principal amount outstanding. Interest income from these financial assets, impairment losses, foreign exchange gains and losses, and gain
or loss arising on derecognition are recognised directly in statement of profit or loss.

b) Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income are held within a business model whose objective is achieved by both
collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash
flows that are solely payments of principal and interest on the principal amount outstanding. Income from such assets are recognized directly in
other comprehensive income.

c) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are those financial assets which are either designated in this category or not classified in any of
the other categories. A gain or loss on debt investment that is subsequently measured at fair value through profit or loss is recognised in statement
of profit or loss in the period in which it arises.

Financial assets are initially measured at cost, which is the fair value of the consideration given and received respectively. These financial assets
and liabilities are subsequently remeasured to fair value, amortized cost or cost as the case may be. Any gain or loss on the recognition and de-
recognition of the financial assets and liabilities is included in the statement of profit or loss for the period in which it arises.

Equity instrument financial assets / mutual funds are measured at fair value at and subsequent to initial recognition. Changes in fair value of these
financial assets are normally recognised in statement of profit or loss. Dividends from such investments continue to be recognised in statement
of profit or loss when the Company’s right to receive payment is established. Where an election is made to present fair value gains and losses on
equity instruments in other comprehensive income there is no subsequent reclassification of fair value gains and losses to statement of profit or
loss following the derecognition of the investment.

Financial assets are derecognised when the rights to receive cash flows from the assets have expired or have been transferred and the Company
has transferred substantially all risks and rewards of ownership. Assets or liabilities that are not contractual in nature and that are created as a result
of statutory requirements imposed by the Government are not the financial instruments of the Company.

Impairment of financial assets

The Company assesses on a forward looking basis, the expected credit losses associated with its financial assets carried at amortised cost and fair
value through other comprehensive income. The Company computes historical loss rates using the historical credit losses which are then adjusted
to reflect current and forward looking information on macroeconomic factors affecting the ability of the customers to settle the receivables. For
trade debts, the Company applied the simplified approach, which requires expected lifetime losses to be recognised from initial recognition of the
receivables. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days
past due. The Company recognises in statement of profit or loss, as an impairment gain or loss, the amount of expected credit losses (or reversal)
that is required to adjust the loss allowance at the reporting date.

59
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021

5.17.2 Financial liabilities

All financial liabilities are recognized at the time when the Company becomes a party to the contractual provisions of the instrument.

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expired. Where an existing financial
liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially
modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and
the difference in respective carrying amounts is recognized in the statement of profit or loss.

5.18 Trade and other payables
Trade payables represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid. The
amounts are unsecured and are usually paid within 30 to 90 days of recognition. Trade and other payables are presented as current liabilities
unless payment is not due within 12 months after the reporting period. They are recognised initially at their fair value and subsequently measured
at amortised cost using the effective interest method.

5.19 Offsetting of financial assets and financial liabilities
Financial assets and financial liabilities are offset and the net amount is reported in the financial statements only when there is a legally enforceable
right to set off the recognized amount and the Company intends either to settle on a net basis or to realize the assets and to settle the liabilities
simultaneously.

5.20 Dividend and appropriation to reserves
Dividend and other appropriation to reserves are recognized in the financial statements in the period in which these are approved.

5.21 Operating segments
Operating segments are reported in a manner consistent with the internal reports issued to the chief operating decision-maker. The Chief Executive
Officer has been identified as the ‘chief operating decision-maker’, who is responsible for allocating resources and assessing performance of the
operating segments. Based on internal management reporting structure, the Company is organized into four operating segments:

- Retail: This segment includes information relating to sales made from retail stores of the Company.
- Wholesale: This segment includes information relating to sales made to distributors of the Company.
- Export: This segment includes information regarding the exports made by the Company to both associated undertakings and other
customers.
- Others: All other sales of the Company including sales of grinderies and wastages are included in this segment.

Management monitors the operating results of above mentioned segments separately for the purpose of making decisions about resources to be
allocated and for assessing performance.

Segment results and assets include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

60
 Note 2021 2020

(Rupees in ’000)

6 PROPERTY, PLANT AND EQUIPMENT

Operating fixed assets 6.2 1,911,223 1,904,351
Capital work in progress 6.3 24,169 45,516
1,935,392 1,949,867

6.1 Particulars of immovable property (i.e. land and building) in the name of the Company are as follows:

Sr. No. Usage of Immovable Property Location Total Area
(Square Feet)

1 Factory Area Batapur Factory Area 740,880

2 Residential Area Batapur Residential Area 1,936,922
3 Sports Ground Batapur, Sports Ground 407,758
4 Factory Area Maraka Factory Area 353,160
5 Retail Store Bata Bazar Batapur, Lahore 4,099
6 Retail Store Mini Price Batapur, Lahore 3,900
7 Retail Store Maraka II, Lahore 9,832
8 Retail Store Aabpara Market Islamabad 1,800
9 Retail Store Jinnah Road Murree 3,230
10 Retail Store Kashmir Road Rawalpindi 3,402
11 Retail Store Haji Building Rawalpindi 2,650
12 Retail Store Amin Bazar Sargodha 1,144
13 Retail Store Khushab 580
14 Retail Store Saddar Bazar Mandi Bahauddin 1,120
15 Retail Store G. T. Road I Gujranwala 521
16 Retail Store Paisa Akbar Anarkali Lahore 1,580
17 Retail Store Abdul Karim Road, Lahore 1,800
18 Retail Store Moon Plaza Liberty Market, Lahore 559
19 Retail Store Marie Claire Liberty Market, Lahore 750
20 Retail Store Shadman Market, Lahore 919
21 Retail Store Shahdara Lahore 522
22 Retail Store Katchery Bazar Faisalabad 2,126
23 Retail Store Liaquat Bazar Quetta 377
24 Retail Store Frere Road Sukkur 645
25 Retail Store Tariq Road I, Karachi 7,560
26 Retail Store Tariq Road Bubble Gummer, Karachi 1,200
27 Retail Store Shah Faisal Colony I, Karachi 753
28 Retail Store Clifton Karachi 1,144
29 Retail Store Pakistan Chowk Karachi 2,628
30 Retail Store Preedy Street Karachi 4,440

61
 6.2 Operating fixed assets
Leasehold land with Buildings on freehold Buildings on freehold Plant and Furniture, fixtures
Freehold land * super structure** Land – factory land – others machinery Boiler Gas installations Office equipment Computers and fittings Vehicles Total
(Rupees in ‘000)
Net carrying value basis
Opening net book value (NBV) 2,508 35 169,294 40,714 477,444 8,335 664 2,046 68,623 1,122,794 11,894 1,904,351

62
Additions (at cost) – – 6,415 750 10,526 – 26 – 132,714 159,315 – 309,746
Disposals (at NBV) – – – – (101) – – – (10,100) (13,858) – (24,059)
Depreciation charge – – (17,132) (2,059) (48,100) (833) (68) (204) (32,651) (175,389) (2,379) (278,815)
Closing net book value (NBV) 2,508 35 158,577 39,405 439,769 7,502 622 1,842 158,586 1,092,862 9,515 1,911,223

Gross carrying value basis
As at December 31, 2021
Cost 2,508 35 305,353 99,440 969,056 13,910 2,240 6,058 277,907 2,536,912 32,452 4,245,871
Accumulated depreciation – – (146,776) (60,035) (529,287) (6,408) (1,618) (4,216) (119,321) (1,444,050) (22,937) (2,334,648)
Net book value (NBV) 2,508 35 158,577 39,405 439,769 7,502 622 1,842 158,586 1,092,862 9,515 1,911,223
Depreciation rate per annum 0% 0% 10% 5% 10% 10% 10% 10% 25% 15% 20%
Net carrying value basis
Year ended December 31, 2020
Opening net book value (NBV) 2,508 35 122,815 39,970 385,468 6,467 741 2,619 78,965 1,168,989 14,867 1,823,444
FOR THE YEAR ENDED DECEMBER 31, 2021

Additions (at cost) – – 61,518 2,823 134,353 2,535 – – 13,397 202,611 – 417,237
Disposals (at NBV) – – – – (436) – – (318) (2,109) (59,876) – (62,739)
Depreciation charge – – (15,039) (2,079) (41,941) (667) (77) (255) (21,630) (188,930) (2,973) (273,591)
Closing net book value (NBV) 2,508 35 169,294 40,714 477,444 8,335 664 2,046 68,623 1,122,794 11,894 1,904,351
Gross carrying value basis
As at December 31, 2020
Cost 2,508 35 298,938 98,690 960,357 13,910 2,214 6,058 198,977 2,426,373 32,452 4,040,512
Accumulated depreciation – – (129,644) (57,976) (482,913) (5,575) (1,550) (4,012) (130,354) (1,303,579) (20,558) (2,136,161)
Net book value (NBV) 2,508 35 169,294 40,714 477,444 8,335 664 2,046 68,623 1,122,794 11,894 1,904,351
Depreciation rate per annum 0% 0% 10% 5% 10% 10% 10% 10% 25% 15% 20%

* Freehold land represents the area of Batapur factory, Maraka factory and Peshawar land. Peshawar land is not saleable in the ordinary course of business.
NOTES TO THE FINANCIAL STATEMENTS

** Leasehold land represents a piece of land obtained from Capital Development Authority in 1965, measuring 1,800 square Feet situated in Islamabad.

6.2.1 The assets include furniture, fixtures & fittings and computers amounting to Rs. 192.012 million (2020: Rs. 125.175 million), which are in the name of the Company but are in possession of various business associates. These assets are provided under a contract,
to run operations of the retail shops to sell Company’s merchandise exclusively.

6.3 Capital work–in–progress 2021
(Rupees in ‘000)
Opening Balance Additions Transfers Closing Balance
Building – 5,638 (5,638) –
Furniture 24,823 32,432 (55,318) 1,937
Machinery 575 7,373 (6,883) 1,065
Computer 20,118 128,747 (127,698) 21,167
45,516 174,190 (195,537) 24,169

2020
(Rupees in ‘000)
Opening Balance Additions Transfers Closing Balance
Building 47 59,505 (59,552) –
Furniture 1,833 172,330 (149,340) 24,823
Machinery 41,448 93,107 (133,980) 575
Computer 125 21,069 (1,076) 20,118
43,453 346,011 (343,948) 45,516
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2020

Note 2021 2020

(Rupees in ‘000)
6.4 Allocation of depreciation expense
The depreciation charge for the year has been allocated as follows:
Cost of sales 33.1 66,099 57,726
Distribution cost 34.4 199,364 200,694
Administrative expenses 35 13,352 15,171
278,815 273,591

6.5 Disposal of property, plant and equipment

2021
Accumulated Written Gain / Mode of
Description of assets Particulars of Purchasers Cost depreciation down value Sale proceeds (loss) disposal
(Rupees in ‘000)
Plant and machinery
Items having book value of less than Rs. 0.50 million each Miscellaneous 1,827 1,726 101 893 792 Negotiation

Computers
Items having book value of less than Rs. 0.50 million each Miscellaneous 53,784 43,684 10,100 2,780 (7,320) Negotiation /
Scrapped

Furniture, fixtures and fittings

Items having book value of less than Rs. 0.50 million each Miscellaneous 48,776 34,918 13,858 10,832 (3,026) Negotiation

104,387 80,328 24,059 14,505 (9,554)

2020
Original Accumulated Written Gain / Mode of
Description of assets Particulars of Purchasers Cost depreciation down value Sale proceeds (loss) disposal
(Rupees in ‘000)
Plant and machinery
Items having book value of less than Rs. 0.50 million each Miscellaneous 4,767 4,330 437 1,104 667 Negotiation

Office Equipment
Items having book value of less than Rs. 0.50 million each Miscellaneous 1,221 905 316 2 (314) Negotiation /
Scrapped
Computers
Items having book value of less than Rs. 0.50 million each Miscellaeous 17,949 15,839 2,110 262 (1,848) Negotiation

Furniture, fixtures and fittings

Items having book value of less than Rs. 0.50 million each Miscellaneous 134,076 74,200 59,876 1,169 (58,707) Negotiation /
Scrapped

158,013 95,274 62,739 2,537 (60,202)

6.5.1 The Company or any of its directors are not related to the purchasers.

63
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021

7 RIGHT OF USE ASSETS

This represents right of use assets (ROUA) obtained on lease. These are being depreciated on straight line basis over their lease term. Reconciliation of
the carrying amount is as follows:
2021 2020
(Rupees in ’000)

Cost
Opening balance as at January 01 6,055,680 5,677,794
Additions 293,088 352,116
Shops vacated during the year (150,678) (443,252)
Effect on ROUA due to renewals 725,843 469,022
Closing balance as at December 31 6,923,933 6,055,680

Depreciation
Opening balance as at January 01 2,370,448 1,125,278
Charge for the year 1,126,172 1,245,170
Closing balance as at December 31 3,496,620 2,370,448

Book value as at December 31 3,427,313 3,685,232

7.1 The depreciation for the year on right of use asset has been charged to distribution cost as referred to in note 34.4.

Note 2021 2020

(Rupees in ’000)

8 INTANGIBLE ASSETS
Intangible assets - POS and computer software 8.1 206,466 1,738
Capital work in process - computer software 7,841 163,006
214,307 164,744

8.1 Net carrying value basis 2021
Year ended December 31, 2021
(Rupees in '000)
Opening net book value (NBV) 1,738
Additions (at cost) 236,616
Amortization charge (31,888)
Closing net book value (NBV) 206,466

Gross carrying value basis
As at December 31, 2021
Cost 275,402
Accumulated Amortization (68,936)
Net book value (NBV) 206,466

Amortization rate is 33.33% for computer software and 25.00% for POS software at retail stores.

Net carrying value basis 2020

Year ended December 31, 2020 (Rupees in '000)

Opening net book value (NBV) 41

Additions (at cost) 1,953
Amortization charge (256)
Closing net book value (NBV) 1,738

Gross carrying value basis

64
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021

Gross carrying value basis 2020

Year ended December 31, 2020 (Rupees in '000)

As at December 31, 2020

Cost 38,786
Accumulated Amortization (37,048)
Net book value (NBV) 1,738

Amortization rate is 33.33% for computer software.

8.2 The amortization charge for the year has been allocated as follows:

Note 2021 2020

(Rupees in ’000)

Distribution cost 34 31,125 256
Administrative expenses 35 763 –
31,888 256

8.3 The cost of fully amortized intangible assets which are still in use as at December 31, 2021 is Rs. 36.833 million ( 2020: Rs. 36.833 million).

Note 2021 2020

(Rupees in ’000)

9 LONG TERM INVESTMENTS

Term deposit receipts 9.1 45,031 45,094

9.1 The deposits include those earmarked against the balances due to employees held as securities as stated in note 25. These carry mark-up at the
rate of 7.4% (2020: 6.5%) per annum. These have been invested in accordance with the provisions of Section 217 of the Companies Act, 2017.

Note 2021 2020
(Rupees in ’000)

10 LONG TERM DEPOSITS AND PREPAYMENTS

Security deposits 10.1 38,630 36,127
Prepaid rent 10.2 50,571 67,257
Less: adjustable within one year 16 (48,124) (67,257)
2,447 –
41,077 36,127

10.1 Included in the amount of security deposits are securities given to landlords in respect of leases of shops.

10.2 Prepaid rent is amount paid in advance to the respective landlord in accordance with the terms of rent agreements of short term leases. It is
adjusted with the rent payable in accordance with the terms of rent agreements.

11 DEFERRED TAX ASSET
The deferred tax asset comprises of temporary differences relating to:

2021 2020
(Rupees in ’000)

Accelerated tax depreciation (1,114,565) (1,198,896)
Lease liabilities 1,279,544 1,290,076
Deferred liability - employee benefits 17,978 19,843
Provision for stores and spare parts 9,356 10,124

65
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021

Note 2021 2020

(Rupees in ’000)

Provision for stock in trade 21,833 29,848

Loss allowance on trade debts 40,449 90,342
Loss allowance on other receivables 1,572 1,572
Loss allowance on advances 2,010 –
Taxable loss carried forward – 103,242
Minimum tax credit carried forward 11.2 94,305 175,662
Liabilities written back 81,647 434,129
434,129 521,813

11.1 The gross movement in net deferred tax asset during the year is as follows:

Opening balance 521,813 70,667
(Charged) / credited to statement of profit or loss (89,019) 454,803
Credited / (charged) to other comprehensive income 11.3 1,335 (3,657)
Closing balance 434,129 521,813

11.2 This represents tax credits on minimum tax which can be carried forward till the year 2025.

11.3 This represents tax impact of remeasurement of defined benefit obligation recognized in other comprehensive income.

Note 2021 2020

(Rupees in ’000)

12 STORES AND SPARE PARTS

Stores 2,400 2,719
Spare parts 29,861 32,193
32,261 34,912
Less: provision for obsolescence 12.1 (32,261) (34,912)
12.1 Provision for obsolescence – –
Opening provision 34,912 37,339
Reversal for the year (2,651) (2,427)
Closing provision 32,261 34,912

13 STOCK IN TRADE
Raw material
In hand 374,340 259,653
In transit 6,236 1,170
380,576 260,823
Less: provision for obsolescence of raw material 13.1 (10,623) (9,878)
369,953 250,945

Goods in process 13.2 35,192 40,540
Finished goods
Own production 1,713,117 1,309,789
Purchased 1,925,172 1,304,587
13.3 3,638,289 2,614,376

Less: provision for slow moving and obsolete items 13.4 (64,663) (93,049)
3,573,626 2,521,327
3,978,771 2,812,812

66
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021

2021 2020
(Rupees in ’000)

13.1 Provision for obsolescence of raw materials

Opening provision 9,878 11,565
Charge for the year 18,121 –
Written off during the year (17,376) –
Reversal for the year – (1,687)
Closing provision 10,623 9,878

13.2 Included in goods in process is stock held by third parties amounting to nil (2020: Rs. 12.672 million).

13.3 Included in finished goods is stock held by third parties amounting to nil (2020: Rs. 459.816 million).

Note 2021 2020
(Rupees in ’000)

13.4 Provision for slow moving and obsolete items

Opening provision 93,049 22,681
Charge for the year – 70,368
Reversal for the year (28,386) –
Closing provision 64,663 93,049

14 TRADE DEBTS - UNSECURED
Considered good
Due from customers 14.1 973,880 1,384,097
Due from associated undertakings 14.2 – 1,520
973,880 1,385,617

Considered doubtful
Due from customers 139,480 311,523
Less: loss allowance 14.3 (139,480) (311,523)
– –
973,880 1,385,617

14.1 These customers have no recent history of default. For age analysis of these trade debts refer to note 44.2.3.
2021 2020
(Rupees in ’000)

14.2 Due from associated undertakings - unsecured

Bata Shoe Singapore Pte Limited – 1,520

14.2.1 Maximum aggregate amount due from associated undertakings at the end of any month in the year was Rs. 2.639 million (2020: Rs. 6.931 million).
No interest has been charged on the amounts due from associated undertakings.

14.2.2 For age analysis of these trade debts refer to note 44.2.4.

2021 2020
(Rupees in ’000)

14.3 Movement in loss allowance is as follows:

Opening provision 311,523 37,477
Charge for the year 1,760 274,046
Written off during the year (168,460) –
Reversals for the year (5,343) –
Closing provision 139,480 311,523

67
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021

Note 2021 2020

(Rupees in ’000)

15 ADVANCES - UNSECURED
Considered good, non-interest bearing
Advances to suppliers 141,573 75,438
Letters of credit - margin 141,442 40,568
283,015 116,006
Considered doubtful, non-interest bearing
Advances to suppliers 6,930 –
Less: provision for doubtful advances 35.4 (6,930) –
– –
283,015 116,006

16 TRADE DEPOSITS AND SHORT TERM PREPAYMENTS
Deposits - Considered good, unsecured
Custom duty and taxes 23,811 3,620
Letters of guarantee - margin 129 129
Others 15,246 3,762
39,186 7,511
Short term prepayments
Prepaid rent 10 48,124 67,257
Prepaid sales tax 175,516 78,959
Other prepaid expenses 30,592 14,268
254,232 160,484
293,418 167,995
17 OTHER RECEIVABLES
Considered good - secured
Receivable from employees 8,747 19,747
Considered good - unsecured
Export rebates 3,595 4,119
Insurance claims 13,648 10,006
Advance tax 17.1 383,895 228,843
Others 17.2 1,773 4,218
402,911 247,186
Considered doubtful
Advance rent 1,584 1,584
Others 3,838 3,838
5,422 5,422
Less: loss allowance 17.3 (5,422) (5,422)
– –
411,658 266,933
17.1 Advance tax
Opening balance 228,843 592,953
Advance tax paid during the year 316,171 198,481
545,014 791,434
Adjusted against:
Provision for taxation (161,119) (564,154)
Provision for prior year tax – 1,563
(161,119) (562,591)
Closing balance 383,895 228,843

68
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021

17.2 Included in others is an amount of Nil (2020: nil) receivable from Bata Shoe Singapore Pte. Limited, an associated undertaking. Maximum
aggregate amount due from associated undertaking at the end of any month in the year was nil (2020: Rs. 0.080 million).

17.3 There has been no movement in loss allowance during the year.

2021 2020
(Rupees in ’000)

18 SHORT TERM INVESTMENTS

This includes the following term deposit receipts:
Habib Metropolitan Bank Ltd. 1,100,000 600,000
Meezan Bank Limited – 300,000
United Bank Limited – 1,050,000
1,100,000 1,950,000

18.1 The range of rates of profits on these term deposits was between 7.00% and 9.15% (2020: 7.00% and 7.50%) per annum.
18.2 The short term investments do not include any investment in related parties (2020: Nil).

2021 2020
(Rupees in ’000)

19 TAX REFUNDS DUE FROM GOVERNMENT

Tax refunds due from Government 350,161 350,161

19.1 This represents sales tax paid on raw materials used in zero-rated taxable footwear for which refund claims have been lodged with the Sales Tax
Department.

Note 2021 2020
(Rupees in ’000)

20 CASH AND BANK BALANCES

Bank balances in:
Current accounts
- Foreign currency 26,787 23,958
- Local currency 51,704 25,843
78,491 49,801
Daily profit accounts 20.1 1,961,799 430,858

Cash in transit 65,398 66,688

Cash in hand:
- Foreign currency 1,871 428
- Local currency 1,011 1,965
2,882 2,393
2,108,570 549,740

20.1 The rate of mark-up on these accounts ranges from 2.75% to 7.25% (2020: 2.84% to 5.50%) per annum.

69
 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021

21 SHARE CAPITAL
21.1 Authorized share capital

2021 2020 2021 2020
(Number of shares in '000) (Rupees in ’000)

10,000 10,000 Ordinary shares of Rs. 10 each 100,000 100,000
10,000 10,000 100,000 100,000

21.2 Issued, subscribed and paid up capital
2021 2020 2021 2020
(Number of shares in '000) (Rupees in ’000)

1,890 1,890 Ordinary shares of Rs. 10 each 18,900 18,900
fully paid in cash
300 300 Ordinary shares of Rs. 10 each 3,000 3,000
issued for consideration other than cash
5,370 5,370 Ordinary shares of Rs. 10 each 53,700 53,700
issued as fully paid bonus shares
7,560 7,560 75,600 75,600

21.2.1 Bafin B.V. (Nederland) (the parent company) holds 5,685,866 (2020: 5,685,866) ordinary shares of Rs. 10 each fully paid up which represents
75.21% (2020: 75.21%) of total paid up capital.

21.2.2 Shares issued for consideration other than cash were issued against plant and machinery.

21.2.3 All ordinary shares rank equally with regard to the Company’s residual assets. Holders of these shares are entitled to dividends as declared from
time to time and are entitled to one vote per share at general meetings of the Company.

2021 2020
(Rupees in ’000)

22 CAPITAL RESERVE

Capital reserve 483 483

22.1 Capital reserve represents the balance of foreign shareholders’ equity in Globe Commercial Enterprises Limited (an associated undertaking) gifted
to the Company on its winding up, and is not available for distribution.

2021 2020
(Rupees in ’000)

23 REVENUE RESERVES
General Reserve:
Opening balance 6,957,000 6,957,000
Transfer from unappropriated profit / (loss) – –
6,957,000 6,957,000
Unappropriated losses (873,662) (660,484)
6,083,338 6,296,516

24 LEASE LIABILITIES
Long term lease liabilities 3,500,649 3,602,826
Current portion of lease liabilities 911,572 871,711
4,412,221 4,474,537

24.1 The Company has leased retail stores from different parties. Reconciliation of the carrying amount is as follows:

70
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021

2021 2020
(Rupees in ’000)

Opening balance 4,474,537 4,984,568
Additions during the year 293,088 373,601
Interest on lease liabilities 667,574 736,832
Payments made and rent concessions received during the year (1,583,591) (1,590,504)
3,851,608 4,504,497
Shops vacated during the year (165,230) (465,980)
Effect on lease liabilities due to renewals 725,843 436,020
Lease liabilities as at December 31 4,412,221 4,474,537
Current portion shown under current liabilities (911,572) (871,711)
Long term lease liabilities as at December 31 3,500,649 3,602,826

24.2 Maturity analysis

Gross lease liabilities - minimum lease payments:
Not later than 1 year 1,465,802 1,456,731
Later than 1 year but not later than 5 years 3,910,151 4,059,050
Later than 5 years 787,528 905,105
6,163,481 6,420,886
Future finance charge (1,751,260) (1,946,349)
Present value of lease liabilities 4,412,221 4,474,537

24.3 The Company had total cash outflows for leases of Rs. 1,411.240 million (2020: Rs. 1,214,224 million). The Company also had non-cash additions
to right of use assets and lease liabilities of Rs. 1,018.931 million (2020: Rs. 809.621 million).

2021 2020
(Rupees in ’000)

25 LONG TERM DEPOSITS

Employees’ securities and personal accounts 26,353 24,788

25.1 Employees’ securities represent the securities deposited by the employees in accordance with the terms of employment. Interest at the rate of
7.40% (2020: 6.50%) per annum is being paid on the monthly outstanding balances.

25.2 In accordance with provisions of Section 217 of the Companies Act, 2017, this amount has been invested in Term Deposit Receipts and is shown
as long term investments in Note 9.

2021 2020
(Rupees in ’000)

26 DEFERRED LIABILITY - EMPLOYEE BENEFITS

26.1 Provision for gratuity - un-funded defined benefit plan 61,992 68,592
26.2 Changes in present value of defined benefit obligations
Present value of defined benefit obligations as at January 01 68,592 83,476
Expense charged in statement of profit or loss 10,277 15,088
Benefits paid during the year (21,479) (17,360)
Remeasurement adjustments charged to other comprehensive income:
- Changes in financial assumptions (1,499) 9,395
- Experience adjustments 6,101 (22,007)
4,602 (12,612)
Present value of defined benefit obligations as at December 31 61,992 68,592

71
 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021

Note 2021 2020

(Rupees in ’000)

26.3 The amount recognized in the statement of profit or loss is as follows:

Current service cost 4,552 4,654
Interest cost 5,725 10,434
Expense charged in statement of profit or loss 10,277 15,088

26.4 Charge for the year has been allocated as follows
Cost of sales 33.4 4,891 7,180
Distribution cost 34.1 1,444 2,120
Administrative expenses 35.1 3,942 5,788
10,277 15,088
26.5 Principal actuarial assumptions
The principal actuarial assumptions used in the actuarial valuation of this scheme by applying projected unit credit method as on December 31
are as follows:

2021 2020

Expected rate of salary increase in future years 9.25% 8.25%

Discount rate 9.75% 9.25%
Expected mortality rate SLIC 2001-2005 SLIC 2001-2005
Average duration of plan 8 Years 7 Years

26.6 Historical information
As at December 31 2021 2020 2019 2018 2017

(Rupees in ‘000)

Present value of defined benefit obligation 61,992 68,592 83,476 86,812 76,030
Remeasurement of defined benefit obligation 4,602 (12,612) 2,254 3,897 2,652
Remeasurement of defined benefit obligation as a percentage
of defined benefit obligation 7% 18% 3% 5% 3%


26.7 Estimated expense to be charged to statement of profit or loss in 2021 Amount

(Rupees in ’000)

Current service cost 3,587

Interest cost on defined benefit obligation 5,536
Amount chargeable to statement of profit or loss 9,123

26.8 Sensitivity analysis
Significant assumptions for the determination of the defined obligation are discount rate and expected salary increase. The sensitivity analysis
below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period,
while holding all other assumptions constant.

Year and sensitivity analysis (± 100 basis points (bps)) on defined benefit obligation

2021 2020
(Rupees in ’000)

Discount rate + 100 bps 59,793 66,656

Discount rate - 100 bps 64,379 70,774
Salary increase + 100 bps 62,867 69,328
Salary increase - 100 bps 61,176 67,885

72
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021

26.9 Risk exposure

Through its defined benefit gratuity scheme, the Company is exposed to a number of risks, the most significant of which are detailed below:

Changes in market yields on Government bonds - The discount rate used to compute the plan liabilities is based on the Government bond yields.
A decrease in Government bond yields will increase the plan liabilities.

Inflation risk - The Company’s gratuity obligation is linked to the salary of the members of the scheme. Therefore, increases in the salaries due to
higher inflation will increase the plan liabilities.

Employee turnover - The plan obligations are to provide benefits for the period of employment of the members. Therefore, lower employee
turnover will increase the plan liabilities.

Life expectancy - The plan obligations are to provide benefits for the period of employment of the members, so increase in life expectancy will
result in an increase in plan liabilities.

Note 2021 2020
(Rupees in ’000)

27 Long term borrowing

Long term finance - secured 27.1 53,518 60,259
Less: current portion shown under current liabilities (6,296) (6,743)
47,222 53,516

27.1 The long term finance was obtained from Habib Bank Limited for import and installation of solar power machinery. Under the arrangement,
principal amount upto Rs. 80 million was repayable in 39 equal quarterly instalments beginning six months after the initial drawdown date.
Interest was payable quarterly in arrears at the rate of 3 months State Bank of Pakistan (SBP) rate plus 1.5 percent per annum.

The loan is secured by first hypothecation charge of Rs. 106.67 million on all present and future moveable fixed assets of the Company and a joint
pari-passu charge on present and future moveable assets and contingent debts of the Company to the extent of Rs. 447 million.

Note 2021 2020
(Rupees in ’000)

28 TRADE AND OTHER PAYABLES

Creditors 28.1 3,119,419 2,199,546
Accrued liabilities 512,682 347,676
Deferred revenue 6,989 5,066
Advances from customers 175,137 30,957
Payable to provident fund trust 21,629 22,080
Security deposits 28.2 106,543 98,160
Workers’ profit participation fund 28.3 40,033 –
Workers’ welfare fund 15,129 –
Sales tax payable 22,659 –
Taxes deducted at source payable 15,831 19,650
Other liabilities 28.4 37,353 51,415
4,073,404 2,774,550

28.1 This includes amounts due to the following related parties:
Bata Brand, Switzerland 28.1.1 1,048,042 608,989
Global Footwear Services, Singapore 604,537 390,818
Bata Malaysia 351 320
Bata Shoe, Singapore 14,776 –
Bata Centre S.R.O 4,885 –
Bata Shoe, Thailand 45 –
1,672,636 1,000,127

73
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021

28.1.1 This includes amounts due in respect of trademark licence fee agreement. During the year ended December 31, 2018, BATA Pakistan Limited and
BATA Brands SA, Switzerland revised the terms of the trade mark agreement wherein the royalty percentage was increased from 2% of the net
revenue (net of taxes) to 5% of the net revenue (subject to deduction of applicable taxes). Certain minority shareholders have filed a suit against
the Company claiming that the increase in royalty is unjustified and have claimed damages of Rs. 800.00 million. Initial proceedings of the case are
currently underway and based on opinion of the management’s legal counsel, the management is expecting a favorable outcome in this regard.
However, State Bank of Pakistan has linked the approval of remittance of additional amount of royalty i.e. the difference between 5% and 2%,
upon the decision of The Honorable Court.

28.1.2 Maximum aggregate amount due to associated undertakings at the end of any month in the year was Rs. 1,667.751 million (2020: Rs. 1,000.127
million). No interest has been paid / accrued on the amounts due to associated undertakings as they are in normal course of business.

28.2 This represents the security deposit received from the registered agency holders and business associates in accordance with the terms of the
contract. These deposits carry interest at the rate of 7.4% (2020: 6.5%) per annum. These are repayable on termination / completion of the contract
and on returning the Company’s property already provided to them if any. As per the agreements signed with these parties, the Company has the
right to utilize the amounts for the purpose of the business, hence, the amounts are not required to be kept in a separate bank account maintained
in a scheduled bank.

Note 2021 2020
(Rupees in ’000)

28.3 Workers' profit participation fund

Opening balance – 81,269
Allocation for the year 36 40,033 –
Interest on funds utilized in Company’s business 38 – 1,002
40,033 82,271
Less: Amount adjusted / paid to fund’s trustees – 82,271
Closing balance 40,033 –

28.4 Other liabilities
Group insurance claims 4,492 5,992
Payable to former employees 19,619 20,561
Payable in respect of Bata mosque – 113
Miscellaneous 13,242 24,749
37,353 51,415

29 SHORT TERM BORROWINGS
The credit facilities available to the Company from various commercial banks aggregate to Rs. 2,235 million (2020: Rs. 2,235 million). These include:

- Non funded facilities of letters of guarantee and letters of credit amounting to Rs. 455 million (2020: Rs. 455 million); and

- Cash finance facilities of Rs. 1,780 million ( 2020: Rs. 1,780 million).

Moreover, the Company can avail further cash finance facilities out of un-utilized unfunded facilities of Rs. 365.000 million (2020: Rs. 365.000 million)
which also includes Rs. 35.000 million (2020: Rs. 35.000 million) of export finance facilities.

The un-utilized facility for letter of credits and guarantees at year end amounts to Rs. 1,879.458 million (2020: Rs. 553.041 million).

Mark up on cash finance ranges from 3 months KIBOR plus 0.50% to 1.0% (2020: 3 months KIBOR plus 0.50% to 1.0% ) as per agreements with banks.
While mark up on export finance is charged at SBP rate plus 1.00% (2020: SBP rate plus 1.00%) per annum.

These finances are secured against hypothecation of stock in trade, stores and spare parts and receivables of the Company amounting to Rs. 2,687
million ( 2020: Rs. 2,654 million).

30 UNPAID DIVIDEND
This represents dividend payable to Bafin B.V. (Nederland), which was pending approval from State Bank of Pakistan as at December 31, 2021. It has
been subsequently paid on January 17, 2022.

74
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021

Note 2021 2020

(Rupees in ’000)

31 CONTINGENCIES AND COMMITMENTS

31.1 Contingent taxation liabilities
The Company is contingently liable for:
Order by sales tax department - under appeal 31.1.1 265,454 265,454
Order by sales tax department - under appeal 31.1.2 237,370 237,370
Order by income tax department - under appeal 31.1.3 954,859 –
Order by income tax department - under appeal 31.1.4 1,027,460 1,027,460
Order by sales tax department - under appeal 31.1.5 79,982 79,982
Order by sales tax department - under appeal 31.1.6 52,134 52,134
Show cause notice by sales tax department against which stay order has been obtained 31.1.7 85,097 85,097
Order by income tax department - under appeal 31.1.8 254,038 254,038
Order by sales tax department - under appeal 31.1.9 60,732 60,732
Order by Collector of Customs - under appeal 31.1.10 23,975 23,975
Order by income tax department - under appeal 31.1.11 34,270 34,270
Order by income tax department - decided in Company’s favour 31.1.12 4,985 24,863
Order by sales tax department-under appeal 31.1.13 90,315 90,315
Order by sales tax department-under appeal 31.1.14 48,046 48,046
Order by income tax department - decided in Company’s favour 31.1.15 153,974 –
3,372,691 2,283,736

31.1.1 The Assistant Commissioner Inland Revenue (ACIR) issued an order on September 30, 2011 raising a demand of Rs. 201.252 million in respect of
tax period from July 2007 to December 2008 on account of non-payment of retail tax on sales made through retail outlets and inadmissible input
tax adjustment claimed against retail supplies. Being aggrieved, the Company preferred an appeal before the Commissioner Inland Revenue
(Appeals) whereby the appeal was decided against the Company. The Company also filed a complaint before the Federal Tax Ombudsman
(FTO), who decided the case in favor of Company on January 11, 2012 and ordered the Commissioner Inland Revenue (CIR) to vacate the
above order. The Company filed an appeal before Commissioner Inland Revenue (Appeals) to dispose of the original order. Commissioner
Inland Revenue (Appeals) ordered that since the Learned FTO decided the case in favor of the Company there remains no cause of further
action. Thereafter, the Company preferred an appeal before the Appellate Tribunal Inland Revenue (ATIR) for cancellation of impugned order,
which is pending adjudication. Moreover, Deputy Commissioner Inland Revenue (DCIR) raised additional demand amounting to Rs. 64.202
million on June 25, 2012 pertaining to period from July 2007 to October 2008 of the sales tax previously refunded to the Company and referred
the case to concerned ACIR / DCIR for enforcement of the order. Thereafter, the Company filed an appeal with Commissioner Inland Revenue
(Appeals), which is pending adjudication. Based on tax advisor’s opinion, the Company’s management expects favorable outcome due to which
no provision has been recorded in these financial statements.

31.1.2 The Tax Department issued 22 separate orders dated October 17, 2012 and November 14, 2012 in which sales tax refunds for the periods
from November 2008 to December 2010 amounting to Rs. 237.370 million have been rejected on the grounds that input sales tax relating to
retail turnover is not admissible. The Company filed separate appeals against these orders with Commissioner Inland Revenue (Appeals). The
Commissioner Inland Revenue (Appeals) decided 19 appeals against the Company while 3 appeals were decided in favor of the Company. The
Company filed 19 separate appeals while tax department filed 3 separate appeals with Appellate Tribunal Inland Revenue (ATIR). The ATIR
decided all 22 appeals in favor of the Company on May 15, 2014. Thereafter, the Tax Department filed an appeal before the Honorable Lahore
High Court, which is pending for adjudication. Based on tax advisor’s opinion, the Company’s management expects favorable outcome due to
which no provision has been recorded in these financial statements.

31.1.3 The Additional Commissioner Inland Revenue (ACIR) raised demand of Rs. 954.859 million vide order dated June 28, 2013 to the Company for
the tax year 2011, whereby, the assessing officer added back certain expenses, disallowed certain amount of tax credit and also assessed that the
Company has suppressed turnover amounting to Rs. 1,427.436 million. Being aggrieved, the Company preferred an appeal with Commissioner
Inland Revenue (Appeals), which was decided in favor of the Company vide order dated October 2, 2013, by deleting all the add backs with
the exception of the difference in the amount of tax credit which has been calculated under Section 65(b) of the Income Tax Ordinance, 2001.
Being aggrieved, the Tax Department filed an appeal against the order of Commissioner Inland Revenue (Appeals) with the Appellate Tribunal
Inland Revenue (ATIR). ATIR vide order dated April 11, 2019 decided the appeal in favour of the Company. The Department filed a reference
petition before Honorable Lahore High Court against the order of ATIR on June 22, 2021 which is pending adjudication. Based on the tax
advisor’s opinion, the Company’s management expects a favourable outcome due to which no provision has been recorded in these financial
statements.

31.1.4 The Additional Commissioner Inland Revenue (ACIR) raised demand of Rs. 1,027.460 million pertaining to the tax year 2012 vide order dated
October 31, 2014, whereby, the assessing officer added back certain expenses & payments to non-residents on the basis of non deduction of

75
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021

withholding taxes, changed the basis of appropriation of expenses between export and local sales, disallowed certain amount of tax credit and
also assessed that the Company has suppressed turnover amounting to Rs. 1,773.054 million. Being aggrieved, the Company preferred an appeal
with the Commissioner Inland Revenue (Appeals). The Commissioner Inland Revenue (Appeals) decided the appeal in favor of the Company vide
order dated January 14, 2015 by deleting almost all the add backs with the exception of the difference in the amount of tax credit which has been
calculated under Section 65(b) of the Income Tax Ordinance, 2001 and the amount of expenditure disallowed on the basis of non deduction of
withholding taxes. The Tax Department and the Company filed separate appeals against the order of the Commissioner Inland Revenue (Appeals)
with the Appellate Tribunal Inland Revenue (ATIR) which are pending adjudication. Based on tax advisor’s opinion, the Company’s management
expects a favorable outcome due to which no provision has been recorded in these financial statements.

31.1.5 The Tax Department raised demand vide two separate orders dated June 25, 2014 and September 30, 2014 amounting to Rs. 46.693 million and Rs.
33.289 million respectively for certain tax periods from January 2012 to June 2013 and from October 2013 to March 2014, respectively, on account
of adjustment of 100% input tax in violation of Section 8b of Sales Tax Act, 1990. Being aggrieved, the Company preferred an appeal before the
Commissioner Inland Revenue Appeals (CIR) whereby the appeal was decided against the Company vide order dated September 9, 2014 and
December 10, 2014. The Company preferred appeals against both the orders before the Appellate Tribunal Inland Revenue (ATIR) which was
decided in favor of the Company vide orders dated December 10, 2014 and January 13, 2015, respectively. The Tax Department filed respective
appeals before the Honorable Lahore High Court, which are pending adjudication. Based on tax advisor’s opinion, the Company’s Management
expects favorable outcome due to which no provision has been recorded in these financial statements.

31.1.6 The Tax Department raised two separate demands vide orders dated December 06, 2014 amounting to Rs. 43.856 million and Rs. 8.278 million
on account of further sales tax of 1% on unregistered customers for the period from October 2013 to July 2014 and August 2014 to September
2014 respectively. Being aggrieved, the Company preferred an appeals with Commissioner Inland Revenue (Appeals) who remanded back both
the cases to adjudicating officer for fresh decision after allowing the appellant to produce relevant record. However the Commissioner Inland
Revenue filed an appeal in the Appellate Tribunal Inland Revenue (ATIR) against the said order, which is pending adjudication. Based on tax
advisor’s opinion, the Company’s Management expects favorable outcome due to which no provision has been recorded in these financial
statements.

31.1.7 The Tax Department issued show cause notice dated April 20, 2015, stating that adjustment of input sales tax of Rs. 85.097 million for the tax
periods February, 2014 to January 2015 on Trade Mark License fee and Management Service Fee claimed by the Company is inadmissible and
recoverable from the Company along with default surcharge. The Company filed a writ petition with the Honorable Lahore High Court (LHC)
against show cause notice. The Honorable Lahore High Court granted stay against the show cause notice, however, the petition is still pending
with the Honorable Lahore High Court for adjudication. Based on tax advisor’s opinion, the Company’s Management expects favorable outcome
due to which no provision has been recorded in these financial statements.

31.1.8 The Additional Commissioner Inland Revenue (ACIR) raised demand vide order dated June 27, 2016 pertaining to tax year 2010 amounting to
Rs. 363.683 million on account of certain issues which primarily include proration of expenses and disallowance of certain expenses. Being
aggrieved, the Company preferred an appeal before the Commissioner Inland Revenue (Appeals) and also filed a rectification application of the
said order. The Commissioner Inland Revenue (Appeals) vide order dated September 16, 2016 decided the appeal in favour of the Company
by deleting majority of the add backs with certain exceptions and remanded back the order with the direction to give consideration to the
rectification application filed by the Company in respect of the proration of expenses made by the Department. Based on the appeal disposed off
by Commissioner Inland Revenue (Appeals), the ACIR issued revised demand amounting to Rs. 254.034 million vide order dated June 30, 2019.
Being aggrieved, the Company again filed an appeal against the order with Commissioner Inland Revenue (Appeals) along with rectification
application against the revised assessment order which was decided in favour of the Company vide order dated November 27, 2020. The
Department has filed an appeal before the ATIR against the said order which is pending adjudication. Based on the tax advisor’s opinion, the
Company’s management expects a favourable outcome due to which no provision has been recorded in these financial statements.

31.1.9 The Assistant Commissioner Sindh Revenue Board raised a demand vide order dated September 1, 2016 amounting to Rs. 60.732 million on
account of non-payment of sales tax on trademark license fee and management services fee for the period from July 2011 to December 2012.
Being aggrieved, the Company filed an appeal before Commissioner (Appeals) Sindh Revenue Board, who decided the matter in favor of the
Company vide order dated February 10, 2019. The department filed an appeal against the order before Appellate Tribunal Sindh Revenue Board
who remanded the case back to the assessing officer for fresh investigation vide order dated August 8, 2019. Subsequently, no further action
has been initiated by the relevant officer of Sindh Revenue Board since the date of Appellate Tribunal Sindh Revenue Board order. Based on
tax advisor’s opinion, the Company’s Management expects favorable outcome due to which no provision has been recorded in these financial
statements.

31.1.10 The Collector of Customs Karachi issued a demand vide order dated November 7, 2019 amounting to Rs. 23.975 million for the tax period
November 2017 to April 2018 disallowing the reduced rate of sales tax under SRO-1125(I) / 2011 utilized by the Company for clearance of
imported footwear. Being aggrieved, the Company filed an appeal before the Custom Appellate Tribunal, Karachi, which is pending adjudication.
Based on tax advisor’s opinion, the Company’s Management expects favorable outcome due to which no provision has been recorded in these
financial statements.

76
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021

31.1.11 The Deputy Commissioner Inland Revenue (DCIR) raised demand vide order dated December 31, 2019 pertaining to tax year 2009 amounting
to Rs. 34.270 million on account of certain issues which primarily include allocation of expenses between export, local sale of imported goods
and other local sale, disallowance of certain management services and licensing fee account of non deduction of withholding taxes, admissibility
of deduction of interest on WPPF and provident fund, and disallowance of certain advances to employees and suppliers and certain payables
to suppliers on account of failure to produce underlying records. Being aggrieved, the Company preferred an appeal before the Commissioner
Inland Revenue (Appeals). The Commissioner Inland Revenue (Appeals) vide order dated October 18, 2020 decided the appeal in favor of
the Company by deleting majority of the add backs with the exception of proration of expenses and addition made on account of advances
to employees and suppliers. Based on the appeal disposed off by Commissioner Inland Revenue (Appeals), the Deputy Commissioner Inland
Revenue (DCIR) has yet to issue a revised demand. The Company however, being aggrieved, has filed an appeal against the additions not deleted
by the Commissioner Inland Revenue (Appeals). The Tax Department also has the right to file an appeal against the order. However, no such
proceedings have yet been initiated by the Department.

31.1.12 The Deputy Commissioner Inland Revenue (DCIR) raised demand vide order dated March 02, 2020 pertaining to tax year 2017 amounting to Rs.
24.863 million on account of certain issues which primarily include disallowance of certain salaries due to non deduction of withholding tax,
disallowance of Provident Fund contribution, disallowance of certain expenses such as tax loss claimed on the sales of fixed assets, exchange loss,
and certain miscellaneous expenses. Being aggrieved, the Company preferred an appeal before the Commissioner Inland Revenue (Appeals). The
Commissioner Inland Revenue (Appeals) vide order dated December 31, 2021 decided the appeal in favor of the Company by allowing credit of
payments in the sum of Rs. 129.295 million as a result the demand has been revised to Rs. 4.985 million. The Company however, being aggrieved,
has filed an appeal against the revised demand by Commissioner Inland Revenue (Appeals). Based on tax advisor’s opinion, the Company’s
Management expects favorable outcome due to which no provision has been recorded in these financial statements.

31.1.13 The Assistant Commissioner Inland Revenue (ACIR) raised demand vide Order dated February 28, 2020 amounting to Rs. 90.315 million in respect
of sales tax charged for the period January 2019 to September 2019 on account of failure to charge further tax on supplies made to unregistered
persons. Being aggrieved, the Company preferred an appeal before Commissioner Inland Revenue (Appeals), who remanded the case back to
the Assistant Commissioner Inland Revenue (ACIR) to afford another opportunity of being heard to the Company. Being aggrieved, the Company
filed an appeal before the ATIR which is pending adjudication. Based on the tax advisor’s opinion, the Company’s management expects a
favourable outcome due to which no provision has been recorded in these financial statements.

31.1.14 The Assistant Commissioner Inland Revenue (ACIR) raised demand vide Order dated March 10, 2020 amounting to Rs. 48.046 million in respect
of sales tax for the period January 2019 to August 2019 on the basis that the Company has failed to maintain value addition at the rate of 4% as
per the provisions of ‘Eight Schedule’ of the Sales tax Act, 1990. Being aggrieved, the Company preferred an appeal before Commissioner Inland
Revenue (Appeals), who remanded the case back to the Assistant Commissioner Inland Revenue (ACIR) to afford another opportunity of being
heard to the Company. Being aggrieved, the Company filed a reference in Honorable Lahore High Court (LHC) which is pending adjudication.
Based on the tax advisor’s opinion, the Company’s management expects a favourable outcome due to which no provision has been recorded in
these financial statements.

31.1.15 The Assistant Commissioner Inland Revenue (ACIR) raised demand vide order dated April 16, 2021 pertaining to tax year 2015 amounting to
Rs. 153.974 million on account of certain issues which primarily include proration of expenses and disallowance of certain expenses. Being
aggrieved, the Company preferred an appeal before the Commissioner Inland Revenue (Appeals) which has been decided in favour of the
company vide order dated January 31, 2022. As per the management’s knowledge, the Department has not yet initiated any appeal against the
order.

2021 2020
(Rupees in ’000)

31.2 Other contingent liabilities

In addition to the contingencies disclosed in note 28.1.1
and note 31.1, the Company is contingently liable for:
- Counter guarantees given to banks 2,171 2,171
- Indemnity bonds given to custom authorities 11,712 3,573
- Claims not acknowledged as debts - under appeal 770 18,322
14,653 24,066

31.3 Commitments
31.3.1 Commitments in respect of:
Capital expenditure 3,465 112,030
Letters of credit and bank contracts 410,595 159,931
414,060 271,961

77
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021

Note 2021 2020

(Rupees in ’000)

32 SALES
Shoes and accessories
Local 17,730,967 15,011,070
Export 40,178 31,537
32.1 17,771,145 15,042,607
Sundry articles and scrap material 74,583 41,934
17,845,728 15,084,541
Less: Sales tax 2,104,825 1,955,362
Discounts to dealers and distributors 1,396,928 1,103,568
Commission to agents / business associates 360,478 314,840
3,862,231 3,373,770
13,983,497 11,710,771

32.1 This represents revenue from contracts with customers.

33 COST OF SALES
Cost of goods manufactured 33.1 4,935,985 3,515,326
Finished goods purchased 3,624,422 2,516,837
Add: opening stock of finished goods 2,521,326 3,828,967
33.2 11,081,733 9,861,130
Less: closing stock of finished goods 13 3,573,626 2,521,326
7,508,107 7,339,804

33.1 Cost of goods manufactured
Raw material consumed
Opening stock 250,947 179,452
Add: purchases 4,005,236 2,742,745
33.3 4,256,183 2,922,197
Less: closing stock 369,953 250,947
3,886,230 2,671,250
Store and spares consumed 9,762 10,052
Fuel and power 161,006 126,601
Salaries, wages and benefits 33.4 686,820 552,512
Repairs and maintenance 33.5 96,391 70,043
Insurance 24,329 20,774
Depreciation 6.4 66,099 57,726
4,930,637 3,508,958
Add: opening goods in process 40,540 46,908
4,971,177 3,555,866
Less: closing goods in process 35,192 40,540
4,935,985 3,515,326

33.2 This includes (reversal of) / charge of provision for slow moving and obsolete items amounting to Rs. (28.386) million (2020: Rs. 70.368 million).

33.3 This includes charge of / (reversal of) provision for obsolescence of raw materials amounting to Rs. 18.121 million (2020: Rs. (1.687) million) and
direct write offs amounting to Rs. 21.141 million (2020: Nil).

33.4 Included in salaries, wages and benefits is an amount of Rs. 16.592 million (2020: Rs. 20.624 million) and Rs. 4.891 million (2020: Rs. 7.180 million)
in respect of contribution to provident fund trust and provision for gratuity respectively.

33.5 Included in repairs and maintenance is reversal of provision for obsolescence of stores and spare parts amounting to Rs. 2.651 million (2020: Rs. 2.426 million).

78
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021

Note 2021 2020

(Rupees in ’000)

34 DISTRIBUTION COST
Salaries and benefits 34.1 789,203 691,904
Freight 214,030 189,853
Advertising and sales promotion 172,104 176,812
Rent 34.2 294,300 243,691
Insurance 25,944 27,224
Trademark license fee 34.3 698,933 364,269
Fuel and power 296,103 222,337
Repairs and maintenance 133,479 90,664
Entertainment 19,448 14,259
Business and property taxes 5,043 6,490
Depreciation 34.4 1,325,536 1,445,864
Amortization on intangible assets 8.2 31,125 –
Loss allowance on trade debts (3,583) 274,046
Miscellaneous 2,709 1,835
4,004,374 3,749,248

34.1 Included in salaries and benefits is an amount of Rs. 23.335 million (2020: Rs. 28.484 million) and Rs. 1.444 million (2020: Rs. 2.120 million) in
respect of contribution to provident fund trust and provision for gratuity respectively.

34.2 This represents expenses incurred on short term leases and variable lease expenses not included in lease liabilities.

34.3 This represents the royalty fee of Bata Brands S.A.R.L., Switzerland an associated company situated in Avenue d’Ouchy 6, 1006 Lausanne,
Switzerland.

34.4 This represents depreciation expense relating to:

Note 2021 2020

(Rupees in ’000)

Property, plant and equipment 6.4 199,364 200,694
Right of use assets 7 1,126,172 1,245,170
1,325,536 1,445,864

35 ADMINISTRATIVE EXPENSES
Salaries and benefits 35.1 620,062 617,814
Employee welfare 42,530 31,101
Fuel and power 18,913 15,164
Telephone and postage 53,558 43,532
Insurance 17,587 5,378
Travelling 79,073 74,785
Repairs and maintenance 10,466 9,801
Printing and stationery 14,014 13,117
Donations and subscription 35.2 9,691 35,254
Legal and professional charges 7,420 15,066
Business and property taxes 4,036 3,661
Management service fee 35.3 227,269 219,870
Depreciation 6.4 13,352 15,171
Amortization on intangible assets 8.2 763 256
Miscellaneous 35.4 12,011 13,218
1,130,745 1,113,188

35.1 Included in salaries and benefits is an amount of Rs. 7.755 million (2020: Rs. 9.598 million) and Rs. 3.942 million (2020: Rs. 5.788 million) in respect
of contribution to provident fund trust and provision for gratuity respectively.

79
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021

35.2 None of the directors of the Company or any of their spouses have any interest in the funds of donees. Furthermore, no donation exceeding Rs.
1 million has been made to any donee.

35.3 Management service fee represents amounts paid / payable to Global Footwear Services, related party, in respect of management services.

35.4 This Includes provision for doubtful advances amounting to Rs. 6.930 million (2020: nil).

Note 2021 2020
(Rupees in ’000)

36 OTHER EXPENSES
Workers’ profit participation fund 28.3 40,033 –
Workers’ welfare fund 15,129 –
Auditors’ remuneration 36.1 6,909 7,415
Exchange loss 58,472 21,126
Loss on fixed assets sold / scrapped 9,554 60,202
130,097 88,743
36.1 Auditors’ remuneration
Statutory audit 3,234 3,064
Review of interim accounts 1,680 1,613
Audit of US GAAP reporting package 993 704
Other reviews and certifications 652 1,714
Out of pocket expenses 350 320
6,909 7,415
37 OTHER INCOME
Income from financial assets
Income from long term investments 3,074 3,975
Income from short term investments 64,711 8,840
Income from bank deposits 33,051 47,874
Rent concessions received 37.1 172,351 376,280
273,187 436,969
Income from non - financial assets
Rental Income 10,605 10,377
Gain on settlement of leases on vacation of shops 14,552 22,728
25,157 33,105
Income from financial liability
Early payment discount on supplier invoices 17,409 3,209
315,753 473,283

37.1 In accordance with the amendment to IFRS 16 which allows a Company to recognize rent concessions in the same way as they would if they were
not lease modifications, the Company has applied this practical expedient to all leases that meet the conditions laid down by the said amendment.
As a result an amount of Rs. 172.351 million (2020: Rs. 376.280 million) has been recognized as other income.

Note 2021 2020
(Rupees in ’000)

38 FINANCE COSTS

Interest / mark-up on:
Lease liabilities 24.1 667,574 736,832
Workers’ profit participation fund 28.3 – 1,002
Employees / agents’ securities and personal accounts 38.1 1,706 3,887
Bank borrowings 1,702 22,852
670,982 764,573
Bank charges and commission 47,666 36,547
718,648 801,120

38.1 These do not include any amounts on account of related parties (2020: Nil).

80
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021

2021 2020
(Rupees in ’000)

39 TAXATION
Current tax
- Current year 186,714 175,662
- Prior year (14,543) (1,563)
172,171 174,099
Deferred tax 89,019 (454,803)
261,190 (280,704)

2021 2020
(%)

39.1 Relationship between tax expenses and accounting profit

Applicable tax rate 29.00 29.00
Tax effect of:
Impact of income subject to minimum tax and presumptive tax regime 2.85 (0.01)
Effect of prior years tax (1.80) (0.17)
Impact of permanent differences and others 2.30 2.09
3.35 1.91
Tax expense for the year 32.35 30.91


40 EARNINGS / (LOSS) PER SHARE - BASIC AND DILUTED
Basic earnings / (loss) per share are calculated by dividing net profit / (loss) for the year attributable to ordinary equity holders of the Company by
weighted average number of ordinary shares outstanding during the year. The following reflects the income and share data used in the basic and diluted
earnings per share computations:

Note 2021 2020
(Rupees in ’000)

Profit / (loss) after taxation - (Rupees in ‘000) 546,089 (627,345)

Weighted average number of ordinary shares (in thousands) 21.2 7,560 7,560

Earnings / (loss) per share - basic and diluted (Rupees per share) 72.23 (82.98)

There is no dilutive effect on the basic earnings / (loss) per share of the Company.

81
 41 SEGMENT REPORTING
Retail Wholesale Export Others Total

82
Segment result and profit reconciliation 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020
Rupees in (‘000)

External sales 11,502,248 9,531,925 2,371,152 2,108,719 40,177 31,537 69,920 38,590 13,983,497 11,710,771
Inter segment sales – – – – – – – – – –
Total revenue 11,502,248 9,531,925 2,371,152 2,108,719 40,177 31,537 69,920 38,590 13,983,497 11,710,771

Cost of sales (5,415,915) (5,241,385) (2,013,133) (2,050,398) (29,137) (22,918) (49,922) (25,103) (7,508,107) (7,339,804)

Gross profit 6,086,333 4,290,540 358,019 58,321 11,040 8,619 19,998 13,487 6,475,390 4,370,967

Distribution cost (3,504,858) (3,091,560) (116,144) (464,043) (7,608) (5,845) – – (3,628,610) (3,561,448)
Administrative expenses (74,641) (30,633) (8,290) (12,503) (588) (216) – – (83,519) (43,352)
(3,579,499) (3,122,193) (124,434) (476,546) (8,196) (6,061) – – (3,712,129) (3,604,800)

Segment results 2,506,834 1,168,347 233,585 (418,225) 2,844 2,558 19,998 13,487 2,763,261 766,167
FOR THE YEAR ENDED DECEMBER 31, 2021

Unallocated operating expenses (1,422,990) (1,257,636)
Other operating expenses (130,097) (88,743)
Other operating income 315,753 473,283
Finance costs (718,648) (801,120)
Profit before taxation 807,279 (908,049)
Taxation (261,190) 280,704
Profit after taxation 546,089 (627,345)

Other disclosures

Segment assets 8,163,045 7,480,169 1,232,098 1,691,100 14,432 11,407 – – 9,409,575 9,182,676
Unallocated assets 6,166,085 4,822,805
NOTES TO THE FINANCIAL STATEMENTS

15,575,660 14,005,481

Segment liabilities 4,619,735 4,549,856 65,538 44,690 – – – – 4,685,273 4,594,546
Unallocated liabilities 4,757,809 3,038,336
9,443,082 7,632,882

Capital expenditures 105,314 216,008 2,082 – – – – – 107,396 216,008
Unallocated 202,350 201,229
309,746 417,237

Depreciation of property, plant and equipment 169,778 203,887 2,520 4,200 – – – – 172,298 208,087
Unallocated 106,517 65,504
278,815 273,591

Amortization of intangible assets 31,125 – – – – – – – 31,125 –
Unallocated 763 256
31,888 256
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021

Note 2021 2020

(Rupees in ’000)

42 CASH AND CASH EQUIVALENTS

Short term investments 1,100,000 1,950,000
Cash and bank balances 20 2,108,570 549,740
3,208,570 2,499,740

42.1 Reconciliation of liabilities arising from financing activities inclusive of current portion:

Non-cash flows
December 31, Recognized December 31,
Financial institution 2020 during the year Cash flows Accrual Other changes* 2021
(Rupees in '000)

Unclaimed dividend 54,494 – (181,614) 187,413 – 60,293
Unpaid dividend – – – 568,587 – 568,587
Long term borrowing 60,259 – (6,741) – – 53,518
Lease liabilities 4,474,537 293,088 (743,666) 667,574 (279,312) 4,412,221

Non-cash flows
December 31, Recognized December 31,
Financial institution 2019 during the year Cash flows Accrual Other changes* 2020
(Rupees in '000)

Unclaimed dividend 54,680 – (453,786) 453,600 – 54,494
Long term borrowing – – 60,259 – – 60,259
Lease liabilities 4,984,568 373,601 (853,672) 736,832 (766,792) 4,474,537

* Other changes include non cash movements, including accrued interest expense which will be presented as operating cashflows in the statement
of cash flows at the time of payment.

42.2 Non-cash investing and financing activities comprise of acquisition of right of use assets as referred to in note 7.

43 REMUNERATION OF DIRECTORS AND EXECUTIVES
The aggregate amounts charged in the financial statements for the year in respect of remuneration, including all benefits to Chief Executive, Directors
and Executives of the Company are as follows:

Chief Executive Directors Executives
2021 2020 2021 2020 2021 2020
(Rupees in ‘000)

Managerial remuneration 34,292 31,410 15,230 13,432 124,608 111,860
Provident fund contribution – – 1,523 1,106 12,461 10,916
Perquisites and allowances
Housing 300 300 1,216 1,151 19,875 20,086
Leave passage 725 794 – – – –
Conveyance – – 917 694 18,691 18,195
Medical allowance / expense reimbursed 364 179 245 223 9,287 9,152
Utilities – – 257 572 1,854 1,146
Others 10,840 3,809 1,614 1,962 16,982 9,712
46,521 36,492 21,002 19,140 203,758 181,067
umber of persons
N 1 1 2 2 54 53

43.1 In addition to the above, 4 (2020: 4) non executive directors were paid an aggregated fee of Rs. 1.615 million (2020: Rs. 1.275 million) for attending
meetings.

43.2 The Chief Executive of the Company is provided with a Company-maintained car and housing facilities at the Company’s premises.

83
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021

44 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company’s activities expose it to a variety of financial risks: market risk (including currency risk, other price risk and interest rate risk), credit risk
and liquidity risk. The Company’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimize
potential adverse effects on the financial performance.

Risk management is carried out by the Board of Directors (the Board). The Board has the overall responsibility for the establishment of a financial risk
governance frame work. They provide assurance that the financial risk-taking activities are governed by appropriate policies and procedures and that
financial risks are identified, measured and managed in accordance with the Company’s risk management policies.

The Company’s overall risk management procedures to minimise the potential adverse effects of financial market on the Company’s performance are
as follows:

44.1 Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices.
Market risk comprise of three types of risks: interest rate risk, currency risk and other price risk such as equity risk. The objective of market risk
management is to manage and control market risk exposures within an acceptable range.

44.1.1 Interest rate risk exposure
Interest rate risk represents the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market interest rates. The Company’s interest rate risk arises from deposits in saving accounts with various commercial banks.

At the reporting date, the interest rate profile of the Company’s interest bearing financial instruments was:

2021 2020
(Rupees in ’000)

Fixed rate instruments

Financial assets
Long term investments 45,031 45,094
Short term investments 1,100,000 1,950,000
Financial Liabilities
Long term deposits - employees’ securities (26,353) (24,788)
Deposits - agents (106,543) (98,160)

Net exposure 1,012,135 1,872,146
Floating rate instruments:
Financial assets
Bank balance in daily profit account 1,961,799 430,858

Financial liabilities
Borrowing (53,518) (60,259)

Net exposure 1,908,281 370,599
Fair value sensitivity analysis for fixed rate instruments
The Company does not account for any fixed rate financial assets and liabilities at fair value through profit or loss. Therefore, a change in
interest rate at the reporting date would not affect profit or loss of the Company.

Cash flow sensitivity analysis for fixed rate instruments
No interest rate risk arises on fixed rate instruments.

Cash flow sensitivity analysis for variable rate instruments
The Company has some amounts invested in various daily profit accounts which offer a variable rate of return. Furthermore, the Company
has entered in certain borrowing arrangements on variable interest rates. The following table demonstrate the sensitivity to a reasonably
possible change interest rate, with all other variables held constant, on the Company’s profit before tax.

84
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021

2021 2020
(Rupees in ’000)

Increase in basis points by 100 19,083 3,706
Decrease in basis points by 100 (19,083) (3,706)

44.1.2 Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange
rates. Currency risk arises mainly from future commercial transactions or receivables and payables that exist due to transactions in foreign
currencies.

The Company is exposed to currency risk arising from primarily with respect to the United States Dollar (USD), Singaporean Dollar, United
Arab Emirates Dirham and Euro. Currently, the Company’s foreign exchange risk exposure is restricted to the amounts receivable from/
payable to the foreign entities. The Company’s exposure to currency risk is as follows:

2021 2020
(Rupees in ’000)

Financial assets
Trade debts - Export customers
Singapore Dollar – 1,520
Cash in hand
US Dollar 1,601 150
Euro 269 277
UAE Dirham 1 1
Cash in bank
US Dollar 26,787 23,958
28,658 25,906
Financial liabilities
Trade and other Payables - Foreign suppliers
US Dollar 1,667,751 1,000,127
Euro 4,885 –
1,672,636 1,000,127

Foreign Currency Sensitivity analysis
The following table demonstrates the sensitivity of the Company’s profit before tax to a reasonably possible change in exchange rates of the
major currencies involved in transactions with the foreign parties, keeping all other variables constant. The Company’s exposure to foreign
currency changes for all other currencies is not material.

2021 2020 2021 2020
Percentage Percentage (Rupees in ‘000)
Change in Change in Effect on Profit Effect on Profit
Exchange Rate Exchange Rate Before Tax Before Tax

+ / - +/-

Variation in USD to PKR 5.00% 5.00% (81,968) (48,801)

Variation in EURO to PKR 5.00% 5.00% (231) 14
Variation in Dirham to PKR 5.00% 5.00% - -
Variation in Singapore Dollar to PKR 5.00% 5.00% - 76

44.1.3 Other price risk
Other price risk represents the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market
prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual
financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market. The Company is not exposed to equity
price risk as it does not have any exposure in equity securities.

85
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021

44.2 Credit risk

Credit risk represents the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation.
Company’s credit risk is primarily attributable to its long term advances, trade debts, advances deposits prepayments and other receivable and its
balances at banks.

The Company makes investment only in liquid securities and only with banks. Given their high credit ratings, management does not expect any counter
party to fail to meet its obligation.

The management has a credit policy in place and exposure to credit risk is monitored on a continuous basis. Credit evaluations are performed on all
customers requiring credit over a certain amount. The Company does not require collateral in respect of financial assets. The Company, however,
mitigates any possible exposure to credit risk by taking security deposits from its dealers and distributors as well as by executing formal agreements
with them. Out of total financial assets of Rs. 4,456,472 million (2020: Rs. 4,052.467 million) following are subject to credit risk:

2021 2020
(Rupees in ’000)

Financial assets
Long term investments 45,031 45,094
Long term deposits 38,630 36,127
Trade debts - unsecured 973,880 1,385,617
Deposits 15,375 3,891
Letters of credit - margin 141,442 40,568
Other receivables 27,763 38,090
Interest accrued 5,781 3,340
Short term investments 1,100,000 1,950,000
Cash at bank 2,040,290 480,659
4,388,192 3,983,386

44.2.1 Long term investments

Financial institution Ratings Carrying Values

Agency Long Term Short term 2021 2020
(Rupees in '000)

Habib Metropolitan Bank Limited PACRA AA+ A1+ 45,031 45,094

44.2.2 Out of the total trade receivables, 88.4% is concentrated in ten customers (2020: 71.5% in ten customers).

2021 2020
(Rupees in ’000)

44.2.3 Trade debts - other than related parties

Neither past due nor impaired 732,347 683,954
Past due but not impaired
1-30 days 170,796 309,552
31-60 days 33,530 116,748
61-90 days 37,207 45,683
Over 90 days – 228,160
241,533 700,143

Past due and impaired
1-30 days – –
31-60 days – –
61-90 days 75,935 –
Over 90 days 63,545 311,523
139,480 311,523

86
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021

2021 2020
(Rupees in ’000)

44.2.4 Trade debts - receivable from related parties

Neither past due nor impaired – 1,520
Past due but not impaired – –
1-30 days – –
31-60 days – –
61-90 days – –
Over 90 days – –

44.2.5 Impairment of financial assets
The Company’s trade debts against local and export sales of inventory are subject to the expected credit loss model. While bank balances and debt
investments carried at amortised cost are also subject to the impairment requirements of IFRS 9, the identified impairment loss was immaterial.

The Company applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all
trade debts.

On that basis, the loss allowance as at December 31, 2021 and December 31, 2020 was determined as follows:

As at December 31, 2021 Trade debts
Up to 90 days 91 to 180 days 181 to 365 days 365 days or more Total
(Rupees in '000)
Expected loss rate - % 0.00% 0.00% 50.00% 100.00%

Gross carrying amount of trade debts
- net of specific allowance 929,422 27,450 34,017 32,408 1,023,297
Loss allowance - general – – 17,009 32,408 49,417

As at December 31, 2020 Trade debts
Up to 90 days 91 to 180 days 181 to 365 days 365 days or more Total
(Rupees in '000)
Expected loss rate - % 0.00% 0.00% 50.00% 100.00%
Gross carrying amount of trade debts 1,272,712 46,587 132,636 245,205 1,697,140
Loss allowance - general – – 66,318 245,205 311,523

44.2.6 Short term investments
Financial institution Ratings
Agency Long Term Short term 2021 2020
(Rupees in '000)
Habib Metropolitan Bank Limited PACRA AA+ A1+ 1,100,000 1,050,000
United Bank Limited VIS AAA A-1+ – 600,000
Meezan Bank Limited VIS AAA A-1+ – 300,000
1,100,000 1,950,000

44.2.7 Cash at bank
Habib Bank Limited VIS AAA A-1+ 1,148,470 334,020
MCB Bank Limited PACRA AAA A1+ 533,645 3,730
Habib Metropolitan Bank Limited PACRA AA+ A1+ 58,177 23,884
Bank Al-Habib Limited PACRA AAA A1+ 81,308 65,071
National Bank of Pakistan PACRA AAA A1+ 1,436 3,541
United Bank Limited VIS AAA A-1+ 56,590 31,502
Meezan Bank Limited VIS AAA A-1+ 140,720 12,023
Allied Bank Limited PACRA AAA A1+ 19,944 6,888
2,040,290 480,659

87
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021

44.3 Liquidity risk

Liquidity risk represents the risk that the Company will encounter difficulties in meeting obligations associated with financial liabilities.

The Company manages liquidity risk by maintaining sufficient cash and bank balances and the availability of funding through an adequate amount
of committed credit facilities. At December 31, 2021 the Company had borrowing limits available from financial institutions at Rs. 2,235.000 million
(2020: Rs. 2,235.000 million) and Rs. 2,108.570 million (2020: Rs. 549.740 million) in cash and bank balances. The Company follows an effective
cash management and planning policy to ensure availability of funds and to take appropriate measures for new requirements.

44.3.1 The following table shows the maturity profile of the Company’s financial liabilities:

2021
(Rupees in '000)
On demand Less than 1 year 1 to 5 years Over 5 years Total

Long term deposits 26,353 – – – 26,353

Long term borrowings – 6,296 24,669 22,553 53,518
Trade and other payables – 4,073,404 – – 4,073,404
Unpaid dividend – 568,587 – – 568,587
Unclaimed dividend – 60,293 – – 60,293
Lease liabilities – 1,465,802 3,910,151 787,528 6,163,481
26,353 6,174,382 3,934,820 810,081 10,945,636

2020
(Rupees in '000)
On demand Less than 1 year 1 to 5 years Over 5 years Total

Long term deposits 24,788 – – – 24,788

Long term borrowings – 6,743 31,490 22,043 60,276
Trade and other payables – 2,774,550 – – 2,774,550
Unclaimed dividend – 54,494 – – 54,494
Lease liabilities – 1,456,731 4,059,050 905,105 6,420,886
24,788 4,292,518 4,090,540 927,148 9,334,994

44.4 Fair value of the financial instruments
Fair value is the amount for which an asset could be exchanged, or liability settled, between knowledgeable willing parties in an arm’s length
transaction. Underlying the definition of fair value is the presumption that the Company is a going concern without any intention or requirement
to curtail materially the scale of its operations or to undertake a transaction on adverse terms. The carrying values of all financial assets and
liabilities reflected in these financial statements approximate their fair values. Fair value is determined on the basis of objective evidence at each
reporting date.

Specific valuation techniques used to value financial instruments include:

– Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).

– Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or
indirectly (that is, derived from prices) (level 2).

– Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).

As of reporting date, there were no Level 1, 2 or 3 assets or liabilities during prior or current year.

44.5 Financial instruments by categories
The carrying values of all financial assets and liabilities reflected in the financial statements approximate their fair values. Fair value is determined
on the basis of objective evidence at each reporting date.

88
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021

At amortised cost
2021 2020
(Rupees in ’000)

Assets
Long term investments 45,031 45,094
Long term deposits 38,630 36,127
Trade debts - unsecured 973,880 1,385,617
Deposits 15,375 3,891
Letters of credit-Margin 141,442 40,568
Other receivables 27,763 38,090
Interest accrued 5,781 3,340
Short term investments 1,100,000 1,950,000
Cash at bank 2,108,570 549,740
4,456,472 4,052,467

Liabilities
Trade and other payables 3,852,788 2,718,877
Unpaid dividend 568,587 –
Unclaimed dividend 60,293 54,494
Lease liabilities 4,412,221 4,474,537
8,893,889 7,247,908

45 CAPITAL RISK MANAGEMENT
The Company’s policy is to safeguard the Company’s ability to remain as a going concern and ensure a strong capital base in order to maintain
investors’, creditors’ and market’s confidence and to sustain future development of the business. The Board of Directors monitors the returns on capital,
which the Company defines as net operating income divided by total shareholders’ equity.

The Company’s objectives when managing risks are

a) to safeguard the entity’s ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for
other stakeholders; and

b) to provide an adequate return to shareholders by pricing products

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to
shareholders, issue new shares, or sell assets to reduce debt.

Consistent with the industry norms, the Company monitors its capital on the basis of gearing ratio. The ratio is calculated as net debt divided by
total capital. Net debt is calculated as total borrowings as shown in the balance sheet less cash and cash equivalent. Total capital is calculated as
‘equity’ as shown in the balance sheet plus net debt (as defined above).

2021 2020
(Rupees in ’000)

The debt-to-equity ratio as at reporting date is as follows:
Net debt 53,518 60,259
Total equity 6,159,421 6,372,599
Capital gearing ratio 0.87% 0.95%

The Company is not subject to any externally-imposed capital requirements.

89
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021

46 TRANSACTIONS WITH RELATED PARTIES

46.1 The related parties and associated undertakings comprise parent company, related group companies, provident fund trust, directors and key
management personnel. Remuneration of Chief Executive and Directors is also shown in Note 43. Transactions with related parties during the
year are as follows;

2021 2020
(Rupees in ’000)

Relationship with the Company Nature of transactions

Common Control Companies Purchase of goods and services 153,876 41,367
Sale of goods and services 4,841 3,017
Trademark license fee 698,933 364,269
Management service fee 227,269 219,870
Holding company Dividend paid – 341,152
Holding company Dividend declared but unpaid 568,587 –
Staff Retirement Benefits Contribution to provident fund trusts 66,399 77,691
Staff Retirement Benefits Gratuity paid to outgoing employees 21,479 17,360

46.2 The Company in normal course of business conducts transactions with its related parties. Balances of related parties at the reporting date
have been shown under payables and receivables. The Company continues to have a policy, whereby, all transactions with related parties and
common control companies are carried out at mutually agreed terms and conditions or comparable uncontrolled price method.

46.3 Following are the related parties with whom the Company had entered into transactions or have arrangements / agreements in place.

Aggregate % of
Shareholding in
Sr. No. Company Name Country of incorporation Basis of Association the Company

1 Bafin B.V., Nederland Netherlands Parent Company 75.21%
2 Bata Brands S.A. Switzerland Switzerland Common group company N/A
3 Bata Shoe (Singapore) Pte. Ltd. Singapore Common group company
and common directorship N/A
4 Bata (Thailand) Limited Thailand Common group company
and common directorship N/A
5 Empresas Commerciales S.A Bata Peru Peru Common group company N/A
6 Global Footwear Services Pte. Ltd. Singapore Common group company
and common directorship N/A
7 Bata Centre S.R.O Switzerland Common group company N/A
8 Bata Shoe Company (Bangladesh) Ltd. Bangladesh Common group company N/A

47 CAPACITY AND ACTUAL PRODUCTION
No. of shifts Installed capacity based on Actual
worked actual shifts worked production
Pairs in '000 Pairs in '000
2021 2020 2021 2020 2021 2020
Footwear in pairs
Cemented 1 to 3 1 to 3 2,636 2,291 2,364 1,464
Polyurethane 1 to 3 1 to 3 3,977 4,334 3,039 2,576
Thongs 1 to 3 1 to 3 5,056 5,099 1,867 2,540
Directly injected plastic 3 3 4,176 4,442 2,672 2,681
Sandak 3 3 2,494 2,538 1,630 1,925
18,339 18,704 11,572 11,186

47.1 The deviation in actual production from installed capacity is due to rapidly growing trends as the Company has to change major shoe lines in
accordance with the market trends. This involves change in manufacturing operations and product mix which causes variances not only between
the installed capacity and actual production but also between the actual production of any two years.

90
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021

2021 2020
48 NUMBER OF PERSONS EMPLOYED
Number of persons employed as at year end 2,274 2,276
Average number of persons employed during the year 2,275 2,522

49 PROVIDENT FUND
Investments out of provident fund have been made in accordance with the provision of the section 218 of the Companies Act, 2017 and the rules
formulated for this purpose.

50 EVENTS AFTER THE REPORTING DATE
50.1 The Board of Directors have approved a final cash dividend for the period ended December 31, 2021 of Rs Nill per share, amounting to Rs Nill
at their meeting held on April 25, 2022. These financial statements do not include the effect of the above dividend which will be accounted for in
the period in which it is approved.

50.2 There were no other subsequent events other than those disclosed elsewhere in these financial statements.

51 DATE OF AUTHORIZATION FOR ISSUE
These financial statements were authorized for issue on March 02, 2022 by the Board of Directors of the Company.

52 CORRESPONDING FIGURES
The corresponding figures have been rearranged and reclassified, wherever considered necessary. However, no significant reclassifications have been
made.

Chief Executive Chief Financial Officer Director

91
PATTERN OF SHAREHOLDING
AS AT DECEMBER 31, 2021

No. of Shareholding Total

Shareholders From To Shares held
758 1 100 29,460
386 101 500 93,306
64 501 1,000 47,126
58 1,001 5,000 123,660
5 5,001 10,000 28,650
5 10,001 15,000 57,332
1 15,001 20,000 15,220
1 20,001 25,000 21,000
2 25,001 30,000 53,172
1 35,001 40,000 38,120
1 80,001 85,000 81,520
1 95,001 100,000 99,674
1 100,001 105,000 100,960
1 1,080,001 1,085,000 1,084,934
1 5,685,001 5,690,000 5,685,866
1286 7,560,000

CATEGORIES OF SHAREHOLDERS

Number of Number of Percentage
Shareholders Shares held

FOREIGN SHAREHOLDERS
Bafin (Netherlands) B.V. 1 5,685,866 75.21

Local Shareholders
Individuals 1,234 347,090 4.59
Industrial Development Bank of Pakistan IDBP (ICP Unit) 1 125 0.00
National Investment Trust Limited (CDC) 1 28,076 0.37
National Investment Trust Limited administration Fund (CDC) 1 21,000 0.28
Trustee National Investment (UNIT) Trust (CDC) 1 1,084,934 14.35
Nnational Bank of Pakistan (CDC) 1 611 0.01
Insurance Companies 9 165,648 2.19
Pension Fund 7 131,654 1.74
Joint Stock Companies 15 6,692 0.09
Modaraba & Mutual Fund 5 65,960 0.87
Other Companies 10 22,344 0.30

TOTAL SHAREHOLDERS 1286 7,560,000 100.00

94
PATTERN OF SHAREHOLDING
AS AT DECEMBER 31, 2021

Number of
Categories of Shareholders shares held % AGE
1. DIRECTORS, CEO THEIR SPOUSES & MINOR CHILDREN
1 MR. ROBERTO LONGO 1 0.0000%
2 MR. MUHAMMAD IMRAN MALIK – –
3 MR. AMJAD FAROOQ – –
4 MR. TOH GUAN KIAT 1 0.0000%
5 MR. KAMAL MONNOO 1 0.0000%
6 MR. MUHAMMAD MAQBOOL 1 0.0000%
7 MS. FATIMA ASAD KHAN 1 0.0000%
8 MR. SYED ASAD ALI ZAIDI – –
9 MR. AAMIR AMIN – –
5 0.0001%
2. ASSOCIATED COMPANIES
Associated Companies, Undertakings and Related Parties (Parent Company)
1 BAFIN (NETHERLANDS) B.V. 5,685,866 75.2099%

3. NIT & ICP
1 IDBP (ICP UNIT) 125 0.0017%
2 NATIONAL INVESTMENT TRUST LIMITED (CDC) 28,076 0.3714%
3 NATIONAL INVESTMENT TRUST LIMITED – ADMINISTRATION FUIND (CDC) 21,000 0.2778%
4 CDC – TRUSTEE NATIONAL INVESTMENT (UNIT) TRUST (CDC) 1,084,934 14.3510%
1,134,135 15.0018%
4. BANKS, DEVELOPMENT FINANCE INSTITUTIONS, NON BANKING
FINANCE INSTITUTIONS
1 NATIONAL BANK OF PAKISTAN (CDC) 611 0.01%
611 0.01%
5. INSURANCE COMPANIES
1 ADAMJEE LIFE ASSURANCE CO.LTD – DGF (CDC) 2,160 0.0286%
2 ADAMJEE LIFE ASSURANCE COMPANY LIMITED (CDC) 12,300 0.1627%
3 ADAMJEE LIFE ASSURANCE COMPANY LTD– AMMANAT FUND (CDC) 2,000 0.0265%
4 ADAMJEE LIFE ASSURANCE COMPANY LTD–IMF (CDC) 100,960 1.3354%
5 EAST WEST INSURANCE CO.LTD (CDC) 200 0.0026%
6 EFU GENERAL INSURANCE LIMITED. (CDC) 25,096 0.3320%
7 HABIB INSURANCE CO.LIMITED. (CDC) 6,000 0.0794%
8 STATE LIFE INSURANCE CORP. OF PAKISTAN. (CDC) 11,392 0.1507%
9 DAWOOD FAMILY TAKAFUL LIMITED (CDC) 5,540 0.0733%
165,648 2.1911%

6. FOREIGN COMPANIES 0 0.00%

7. MODARABA & MUTUAL FUND
1 CDC – TRUSTEE ATLAS STOCK MARKET FUND (CDC) 80 0.0011%
2 CDC – TRUSTEE MCB PAKISTAN ASSET ALLOCATION FUND (CDC) 12,220 0.1616%
3 CDC – TRUSTEE MCB PAKISTAN STOCK MARKET FUND (CDC) 38,120 0.5042%
4 CDC – TRUSTEE NIT ISLAMIC EQUITY FUND (CDC) 5,120 0.0677%
5 CDC – TRUSTEE NIT–EQUITY MARKET OPPRTUNITY FUND (CDC) 10,420 0.1378%
65,960 0.8725%
8. PENSION FUND
1 TRUSTEE NATIONAL BANK OF PAKISTAN EMPLOYEE PENSION FUND (CDC) 99,674 1.3184%
2 PAKISTAN PETROLEUM EXECUTIVE STAFF PENSION FUND–DC SHARIAH (CDC) 3,380 0.0447%
3 TRUSTEE PAK. PETROLEUM EXEC. STAFF PENSION FUND DC CONVENTIONAL (CDC) 1,260 0.0167%
4 TRUSTEE PAKISTAN PETROLEUM EXECUTIVE STAFF PENSION FUND (CDC) 15,220 0.2013%
5 TRUSTEE PAKISTAN PETROLEUM NON–EXECUTIVE STAFF PENSION FUND (CDC) 4,920 0.0651%
6 CDC – TRUSTEE PAKISTAN PENSION FUND – EQUITY SUB FUND (CDC) 4,380 0.0579%
7 CDC–TRUSTEE ALHAMRA ISLAMIC PENSION FUND – EQUITY SUB FUND (CDC) 2,820 0.0373%
131,654 1.7415%
9. JOINT STOCK COMPANIES
1 FATEH INDUSTRIES LIMITED 160 0.0021%
2 STANLEY HOUSE INDUSTRIES (PRIVATE) LIMITED (CDC) 500 0.0066%
3 IGI FINEX SECURITIES LIMITED (CDC) 1 0.0000%
4 IRFAN MAZHAR SECURITIES (PVT) LTD. (CDC) 540 0.0071%
5 ISPI CORPORATION (PRIVATE) LIMITED (CDC) 1,200 0.0159%
6 MAPLE LEAF CAPITAL LIMITED (CDC) 1 0.0000%

95
PATTERN OF SHAREHOLDING
AS AT DECEMBER 31, 2021

Number of
Categories of Shareholders shares held % AGE

7 NAEEM’S SECURITIES (PVT) LTD (CDC) 50 0.0007%

8 NCC - PRE SETTLEMENT DELIVERY ACCOUNT (CDC) 460 0.0061%
9 NH SECURITIES (PVT.) LIMITED. (CDC) 135 0.0018%
10 SAOO CAPITAL (PVT) LIMITED (CDC) 20 0.0003%
11 SARFRAZ MAHMOOD (PRIVATE) LTD (CDC) 25 0.0003%
12 SERVICE SALES CORPORATION (PRIVATE) LIMITED (CDC) 100 0.0013%
13 SOFCOM (PRIVATE) LIMKITED (CDC) 300 0.0040%
14 TOPLINE SECURITEIS LIMITED - MF (CDC) 2,500 0.0331%
15 RAFUM CORPORATION (PRIVATE) LIMITED (CDC) 700 0.0093%
6,692 0.0885%
10. OTHER COMPANIES
1 TRUSTEE NATIONAL BANK OF PAKISTAN EMP BENEVOLENT FUND TRUST (CDC) 3,498 0.0463%
2 ALI GOHAR & COMPANY (PRIVATE) LIMITED STAFF PROVIDENT FUND (CDC) 720 0.0095%
3 CHEVRON PAKISTAN LUBRICANTS (PVT.) LTD. EPF (CDC) 260 0.0034%
4 GETZ PHARMA (PRIVATE) LIMITED EMPLOYEES PROVIDEWNT FUND (CDC) 1,440 0.0190%
5 NESTLE PAKISTAN LTD. EMPLOYEES PROVIDENT FUND (CDC) 3,346 0.0443%
6 TRUSTEE- GUL AHMED TEXTILE MILLS LTD. EMP. PROVIDENT FUND (CDC) 2,000 0.0265%
7 TRUSTEE PAKISTAN PETROLEUM EXECUTIVE STAFF GRATUITY FUND (CDC) 1,520 0.0201%
8 TRUSTEE PAKISTAN PETROLEUM JUNIOR PROVIDENT FUND (CDC) 2,600 0.0344%
9 TRUSTEE PAKISTAN PETROLEUM NON-EXECUTIVE STAFF GRATUITY FUND (CDC) 2,280 0.0302%
10 TRUSTEE PAKISTAN PETROLEUM SENIOR PROVIDENT FUND (CDC) 4,680 0.0619%
22,344 0.2956%

11. SHARES HELD BY THE GENERAL PUBLIC (FOREIGN) 200 0.0026%
SHARES HELD BY THE GENERAL PUBLIC (LOCAL) 346,885 4.5884%
347,085 4.5911%
TOTAL: 7,560,000 100.00%

Categories of Shareholders SHARES % AGE

1. SHAREHOLDERS HOLDING 10% OR MORE OF TOTAL CAPITAL
S.No NAME
1 BAFIN (NEDERLANDS) B.V. 5,685,866 75.2099%
2 CDC - TRUSTEE NATIONAL INVESTMENT (UNIT) TRUST (CDC) 1,084,934
3 NATIONAL INVESTMENT TRUST LIMITED (CDC) 28,076
4 NATIONAL INVESTMENT TRUST LIMITED - ADMINISTRATION FUIND (CDC) 21,000
5 NATIONAL BANK OF PAKISTAN (CDC) 611
1,134,621 15.0082%
6,820,487 90.2181%

Categories of Shareholders SHARES % AGE

2. SHAREHOLDERS HOLDING 5% OR MORE OF TOTAL CAPITAL
S.No NAME
1 BAFIN (NEDERLANDS) B.V. 5,685,866 75.2099%
2 CDC - TRUSTEE NATIONAL INVESTMENT (UNIT) TRUST (CDC) 1,084,934
3 NATIONAL INVESTMENT TRUST LIMITED (CDC) 28,076
4 NATIONAL INVESTMENT TRUST LIMITED - ADMINISTRATION FUIND (CDC) 21,000
5 NATIONAL BANK OF PAKISTAN (CDC) 611
1,134,621 15.0082%
6,820,487 90.2181%

During the financial year the trading in shares of the company by the Directors, CEO, CFO, Company
Secretary and their spouses and minor children is as follows

S.No NAME SALE PURCHASE

1 NIL 0 0

96
 FORM OF PROXY
70th ANNUAL GENERAL MEETING

The Company Secretary

Bata Pakistan Limited
P.O. Batapur,
Lahore

I/We ______________________________________________________________________________________________________________________________

of ______________________________________________________________________________________________________________________________

being a member of Bata Pakistan Limited and holder of ____________________________________________________________________________

___________________________________________________________________________________________ Ordinary Shares as per Register Folio

No. _______________________________________ and / or CDC Participant I.D. No. ________________________________ and Sub Account No.

___________________ hereby appoint _______________________________________ of ______________________________________________________

____________________________________ or failing him __________________________________ of ____________________________________________

as my/our proxy to vote for me/us and on my/our behalf at the 70th Annual General Meeting of the Company to be held on April 25, 2022 and at any
adjournment thereof.

Signature: _____________________________ Rs.10/- Revenue Stamp

Date: _________________________________

WITNESSES:
1. Signature ___________________________ 2. Signature ___________________________
Name ______________________________ Name ______________________________
Address ____________________________ Address ____________________________
____________________________________ ____________________________________
CNIC No. ___________________________ CNIC No. ___________________________
Passport No. ________________________ Passport No. ________________________

Note:

1. A member entitled to be present and vote at the meeting may appoint a proxy to attend, speak and vote for him/her. A proxy need not be a member
of the Company.
2. Proxies in order to be effective must be received at the Registered Office of the Company not later than 48 hours before the meeting.
3. CDC Shareholders and their Proxies must each attach an attested photocopy of their Computerize National Identity Card (CNIC) or passport with this
proxy form.

4. In case of Joint Shareholders, the vote of senior who tenders a vote whether in person or proxy will be accepted to the exclusion of votes of other joint
shareholders and for this purpose, seniority will be determined by the order in which names stand in the Register of the Members.
I. In case of Corporate entities, the Board of Director’s Resolution/Power of attorney and specimen signature must be submitted (unless it has been
provided earlier) along with proxy form to Share Registrar/Company.
II. Members are further requested:
a) To affix revenue stamp of Rs.10/- at the place indicated above.
b) To sign in the same style/pattern as is registered with Company.
c) To write down folio number in readable manner.
 AFFIX
CORRECT
POSTAGE

The Company Secretary

BATA PAKISTAN LIMITED
P.O. BATAPUR,
LAHROE.
2022 25 70

2022

(2) (1)