MIRA INFORM REPORT

Report Date :

25.03.2013

IDENTIFICATION DETAILS

Name :	BATA, AKCIOVA SPOLECNOST

Formerly Known As :	BAŤA ČSFR, A.S.

Registered Office :	Dlouhá ul. 130 762 22 Zlín

Country :	Czech Republic

Financials (as on) :	31.12.2011

Date of Incorporation :	26.11.1991

Com. Reg. No.:	B 872

Legal Form :	Public Limited Company

Line of Business :	Manufacture of footwear

No. of Employees :	976

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Satisfactory
Payment Behaviour :	Slow but correct
Litigation :	Clear

NOTES :

Any query related to this report can be made on e-mail: infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – June 30^th, 2012

Country Name

Previous Rating

(31.03.2011)

Current Rating

(30.06.2012)

Czech Republic

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

CZECH REPUBLIC - ECONOMIC OVERVIEW

The Czech Republic is a stable and prosperous market economy, which harmonized its laws and regulations with those of the EU prior to its EU accession in 2004. While the conservative, inward-looking Czech financial system has remained relatively healthy, the small, open, export-driven Czech economy remains sensitive to changes in the economic performance of its main export markets, especially Germany. When Western Europe and Germany fell into recession in late 2008, demand for Czech goods plunged, leading to double digit drops in industrial production and exports. As a result, real GDP fell 4.7% in 2009, with most of the decline occurring during the first quarter. Real GDP, however, has slowly recovered with positive quarter-on-quarter growth starting in the second half of 2009 and continuing throughout 2011. The auto industry remains the largest single industry, and, together with its upstream suppliers, accounts for nearly 24% of Czech manufacturing. The Czech Republic produced more than a million cars for the first time in 2010, over 80% of which were exported. Foreign and domestic businesses alike voice concerns about corruption especially in public procurement. Other long term challenges include dealing with a rapidly aging population, funding an unsustainable pension and health care system, and diversifying away from manufacturing and toward a more high-tech, services-based, knowledge economy.

Source : CIA

Company name and address

BATA, AKCIOVA SPOLECNOST

Dlouhá ul. 130
762 22 Zlín

telephone: 00420/ 577 685 111
telefax: 00420/ 577 685 224
e-mail: kontakt@bata.cz
Web: www.bata.cz

Company development

Constant business development

Order situation	Retrograde order situation
Terms of payment	mostly no complaints, but occasional delays / reminders

Business connection

Business connections appear permissible

Summary

Legal form

Public limited company

Foundation	26/11/1991 - Public limited company
Comp. Register	26/11/1991, Krajský soud v Brně, RegNr.: B 872 Statistical number: 44268050 Tax number: CZ44268050

Share Capital	26/11/1991	CZK	100 000,-
	20/12/1991	CZK	817 257 000,-

20/10/1994		CZK	817 257 000,-
	817.257 of registered shares at nominal value of CZK 1.000,--

Main Shareholder	International Footwear Investment, B.V. (Statistical number: 000020593449) Amsterdam, Netherlands		%	100
Board of Directors		Bengt Gunnarsson (11.07.1943) Avenue Clovis Hugues 8448, Bonnieux, France chairman of board

	Eugenio Olabe (01.02.1971) C.Salabre 11, BW 64 Alicante, Spain
	Ing. Jaroslav Odstrčil (01.03.1959) Horní Lapač 28, 767 01 Kroměříž

	Ing. Tomáš Novotný (07.02.1974) Školní 208, 760 01 Zlín
	Martin Procházka, MBA (10.11.1972) Na Zápovědi 561, 686 01 Uherské Hradiště

Supervisory Board	Martin Ševčík (03.03.1972) Křiby 4603, 760 05 Zlín
	Prof. Ing. Petr Sáha (15.02.1948) Náves 4, 760 01 Zlín, Mladcová chairman of supervisory board

	Thomas Archer Bata (23.01.1988) Dundas Street 73/4, Edinburgh EH36RS, Great Britain
Management	Vojtěch Kořen (31.08.1976) Ruská 2164/21, 415 01 Teplice confidential clerk

General Data		Manufacture and retail sale of footwear, of leather fancy goods, travelling luggage; sale of hosiery. Sales network of the company is constituted by 83 salesrooms, from this 22 superstores and 10 salesrooms Athletes World all over the Czech Republic. The greatest Baťa department store in Europe is situated at the address Venceslas Square 6, 110 00 Prague 1, phone: 00420/ 221 088 478
	Main activity: Manufacture of footwear		(15.20)

	Former name(s) BAŤA ČSFR, a.s. Beginning of validity: 26.11.1991 End of validity: 03.05.1993
	Trade name(s) BAŤA, akciová společnost Beginning of validity: 03.05.1993

	Export: Italy Poland Slovakia Spain	20%
	Import: China Italy Spain Switzerland

	General contacts: telephone: 00420/ 577 685 111 telefax: 00420/ 577 685 224 e-mail: kontakt@bata.cz Web: www.bata.cz
	Address: Dlouhá ul. 130, 762 22 Zlín Beginning of validity: 22.05.1992

	U Sovových mlýnů 9, 111 21 Praha 1 Beginning of validity: 26.11.1991 End of validity: 22.05.1992
	Factory of the business: výrobní divize / division of production /Herstellungsdivision Hlucká 573, 687 62 Dolní Němčí telephone: 00420/ 572 611 111 telefax: 00420/ 572 611 122

Staff	2006	1247 employees
	2007	1219 employees

	2008	1228 employees
	2009	1084 employees

	2010	1076 employees
	2011	980 employees

	2012	990 employees
	2013	976 employees

Annual Sales	2005	actual sales	CZK	2 577 507 000,-
	2006	actual sales	CZK	2 703 733 000,-

	2007	actual sales	CZK	2 897 390 000,-
	2008	actual sales	CZK	2 763 616 000,-

	2009	actual sales	CZK	2 459 891 000,-
	2010	actual sales	CZK	2 127 680 000,-

	2011	actual sales	CZK	1 935 241 000,-
	2012	projected sales	CZK	1 804 423 000,-

Property	Property of the company: CZ-762 22 Zlín, Dlouhá 130 Property of the company: CZ-68762 Dolní Němčí, Hluchá 573 Property of the company: CZ-110 00 Praha 1, Václavské náměstí 774/6
	and other real estate.

Balance sheets

The enclosed balance of 2011 company's own data, it is authenticated by the auditor. (31.12.2011 - 1 CZK)
The enclosed balance of 2010 from business register, it is authenticated by the auditor. (31.12.2010 - 1 CZK)
The enclosed balance of 2009 company's own data, it is authenticated by the auditor. (31.12.2009 - 1 CZK)
The enclosed balance of 2008. (31.12.2008 - 1 CZK)

The enclosed profit/loss account of 2011 company's own data, it is authenticated by the auditor. (31.12.2011 - 1 CZK)
The enclosed profit/loss account of 2010 from business register, it is authenticated by the auditor. (31.12.2010 - 1 CZK)
The enclosed profit/loss account of 2009 company's own data, it is authenticated by the auditor. (31.12.2009 - 1 CZK)
The enclosed profit/loss account of 2008. (31.12.2008 - 1 CZK)

Remarks

Business management:
Eugenio Olabe – general director
Martin Procházka, MBA – financial director
Mr. Kubáník – business director
Tomáš Novotný – business performance director
Vojtěch Kořen – staff director
Lukáš Ohanka – director for marketing
ing. Jaroslav Odstrčil - manager for logistics and distribution

The original firm Baťa was founded in Zlín in 1894.
Before the year 1939, the concern Baťa was engaging 67 employees, from this 25.000 abroad, where 63 companies Baťa were doing business. The inland annual production of the firm Baťa constituted 48 million pairs of footwear In 1945, the firm was nationalized and renamed to Svit Zlín. In 1991, joint-stock company BAŤA was newly established; proprietor was National property fund. Its share was bought-off by the present shareholder gradually (80% in 1996, 10% in 1998 and 10% in 1999). By means of shareholder, the company is a part of the group, which is doing business in 68 countries of the world, has 40 production plants, 4.600 salesrooms and engages 40 thousand employees.

On 1.9.2008, Tomáš Baťa jr., son of the founder of the footwear imperious and a member of the Board of Supervision of the company BAŤA, akciová společnost has died.

Contact:
ing. Libuše Bělotová – accounting department chief,
phone: 00420/ 577 685 135, mobile phone: 00420/ 731 618 764
Světlana Pomajbíková, accountant, phone: 00420/ 577 685 121
Mrs. Mikulčíková, staff department, phone: 00420/ 577 685 119

Bankers

UniCredit Bank Czech Republic, a.s.

HSBC Bank plc - pobočka Praha

Česká spořitelna, a. s.

(2700)

(8150)

(0800)

	balance	31.12.2008 (CZK)	31.12.2009 (CZK)	31.12.2010 (CZK)	31.12.2011 (CZK)
r1	TOTAL ASSETS	1 514 645 000	1 302 950 000	1 293 247 000	1 249 655 000
r2	Receivables for subscriptions	0	0	0	0
r3	Fixed assets	633 256 000	563 108 000	493 339 000	490 193 000
r4	Intangible fixed assets	2 936 000	1 761 000	1 076 000	2 640 000
r7	Software	1 790 000	933 000	484 000	722 000
r8	Valuable rights	1 101 000	814 000	592 000	514 000
r10	Other intangible fixed assets	45 000	14 000
r11	Intangible fixed assets under construction				1 404 000
r13	Tangible fixed assets	630 320 000	561 347 000	492 263 000	487 553 000
r14	Lands	13 566 000	13 566 000	13 566 000	13 566 000
r15	Constructions	510 673 000	469 849 000	428 627 000	417 870 000
r16	Equipment	100 397 000	76 116 000	49 132 000	53 208 000
r19	Other tangible fixed assets	2 080 000	1 188 000	744 000	971 000
r20	Tangible fixed assets under construction	2 422 000	316 000	165 000	1 504 000
r21	Advance payments for tangible fixed assets	153 000	55 000	29 000	434 000
r22	Adjustment to acquired assets	1 029 000	257 000
r23	Long-term financial assets	0	0	0	0
r31	Current assets	869 313 000	729 223 000	789 381 000	751 267 000
r32	Inventory	609 113 000	480 436 000	398 168 000	450 889 000
r33	Materials	17 333 000	16 357 000	15 860 000	20 823 000
r34	Work in progress and semi-products	3 683 000	3 179 000	1 692 000	2 986 000
r35	Finished products	17 963 000	9 569 000	10 552 000	11 599 000
r37	Merchandise	570 134 000	451 331 000	370 064 000	415 481 000
r39	Long-term receivables	23 736 000	21 378 000	20 012 000	18 372 000
r40	Trade receivables	5 000 000
r47	Deferred tax receivable	18 736 000	21 378 000	20 012 000	18 372 000
r48	Short-term receivables	175 836 000	206 696 000	105 667 000	68 160 000
r49	Trade receivables	129 690 000	170 915 000	86 088 000	44 663 000
r54	Due from state - tax receivable	12 790 000	9 797 000		4 081 000
r55	Short-term deposits given	15 338 000	15 242 000	11 073 000	12 305 000
r56	Estimated receivable	1 009 000	1 098 000	1 296 000	578 000
r57	Other receivables	17 009 000	9 644 000	7 210 000	6 533 000
r58	Short-term financial assets	60 628 000	20 713 000	265 534 000	213 846 000
r59	Cash	6 976 000	6 877 000	4 916 000	6 966 000
r60	Bank accounts	53 652 000	13 836 000	260 618 000	206 880 000
r63	Accruals	12 076 000	10 619 000	10 527 000	8 195 000
r64	Deferred expenses	12 076 000	10 619 000	10 527 000	8 195 000
r67	TOTAL LIABILITIES	1 514 645 000	1 302 950 000	1 293 247 000	1 249 655 000
r68	Equity	1 057 847 000	1 036 527 000	1 069 071 000	984 214 000
r69	Registered capital	817 257 000	817 257 000	817 257 000	817 257 000
r70	Registered capital	817 257 000	817 257 000	817 257 000	817 257 000
r73	Capital funds	19 420 000	14 528 000	13 162 000	12 475 000
r75	Other capital funds	7 433 000	7 433 000	7 433 000	7 433 000
r76	Differences from revaluation of assets and liabilities ( +/- )	11 987 000	7 095 000	5 729 000	5 042 000
r78	Reserve funds, statutory reserve account for cooperatives, and other retained earnings	24 583 000	24 668 000	24 668 000	26 364 000
r79	Legal reserve fund / indivisible fund	24 583 000	24 668 000	24 668 000	26 364 000
r81	Profit / loss - previous years	194 935 000	196 503 000	180 074 000	122 288 000
r82	Retained earnings from previous years	194 935 000	196 503 000	180 074 000	122 288 000
r84	Profit / loss - current year (+/-)	1 652 000	-16 429 000	33 910 000	5 830 000
r85	Liabilities	442 140 000	242 522 000	208 084 000	251 329 000
r86	Reserves	2 589 000	3 269 000	4 895 000	4 781 000
r90	Other reserves	2 589 000	3 269 000	4 895 000	4 781 000
r91	Long-term payables	0	0	0	0
r102	Short-term payables	271 228 000	173 130 000	203 189 000	246 548 000
r103	Trade payables	162 484 000	88 377 000	114 503 000	154 384 000
r107	Payroll	18 187 000	15 041 000	14 573 000	14 788 000
r108	Payables to social securities and health insurance	9 447 000	7 944 000	8 067 000	8 180 000
r109	Due from state - tax liabilities and subsidies	23 621 000	28 485 000	29 045 000	22 576 000
r110	Short-term deposits received	5 025 000	2 386 000	2 358 000	2 137 000
r112	Estimated payables	40 577 000	30 895 000	34 643 000	44 483 000
r113	Other payables	11 887 000	2 000
r114	Bank loans and financial accommodations	168 323 000	66 123 000	0	0
r115	Long-term bank loans	8 245 000	0	0	0
r116	Short-term bank loans	160 078 000	66 123 000	0	0
r117	Short-term accommodations	0	0	0	0
r118	Accruals	14 658 000	23 901 000	16 092 000	14 112 000
r119	Accrued expenses	13 939 000	13 173 000	7 869 000	6 511 000
r120	Deferred revenues	719 000	10 728 000	8 223 000	7 601 000
	profit/loss account	31.12.2008 (CZK)	31.12.2009 (CZK)	31.12.2010 (CZK)	31.12.2011 (CZK)
a1	Turnover	2 763 616 000	2 459 891 000	2 127 680 000	1 935 241 000
a2	Revenues from sold goods	2 656 366 000	2 352 221 000	2 020 166 000	1 828 597 000
a3	Expenses on sold goods	1 837 596 000	1 626 898 000	1 341 351 000	1 117 183 000
a4	Sale margin	818 770 000	725 323 000	678 815 000	711 414 000
a5	Production	190 607 000	150 776 000	143 939 000	146 390 000
a6	Revenues from own products and services	107 250 000	107 670 000	107 514 000	106 644 000
a7	Change in inventory of own products	8 704 000	-9 015 000	311 000	2 292 000
a8	Capitalization	74 653 000	52 121 000	36 114 000	37 454 000
a9	Production consumption	467 953 000	422 981 000	394 196 000	431 676 000
a10	Consumption of material and energy	161 996 000	125 007 000	125 119 000	131 831 000
a11	Services	305 957 000	297 974 000	269 077 000	299 845 000
a12	Added value	541 424 000	453 118 000	428 558 000	426 128 000
a13	Personnel expenses	367 712 000	327 137 000	298 651 000	315 674 000
a14	Wages and salaries	266 279 000	248 655 000	220 191 000	232 550 000
a15	Renumeration of board members	90 000	293 000	230 000	139 000
a16	Social security expenses and health insurance	91 342 000	74 134 000	75 449 000	79 837 000
a17	Other social expenses	10 001 000	4 055 000	2 781 000	3 148 000
a18	Taxes and fees	1 343 000	660 000	702 000	741 000
a19	Depreciations of intangible and tangible assets	95 497 000	91 609 000	80 485 000	74 464 000
a20	Revenues from disposals of fixed assets and materials	25 226 000	2 999 000	2 316 000	6 617 000
a21	Revenues from disposals of fixed assets	22 089 000	1 137 000	493 000	3 033 000
a22	Revenues from disposals of materials	3 137 000	1 862 000	1 823 000	3 584 000
a23	Net book value of disposed fixed assets and materials	10 708 000	7 498 000	2 523 000	4 473 000
a24	Net book value of sold fixed assets	7 689 000	5 267 000	355 000	398 000
a25	Net book value of sold material	3 019 000	2 231 000	2 168 000	4 075 000
a26	Change in operating reserves and adjustments and complex deferred costs ( + / - )	13 184 000	42 000	-23 034 000	-15 098 000
a27	Other operating revenues	6 820 000	4 620 000	5 221 000	5 324 000
a28	Other operating expenses	46 146 000	36 292 000	28 688 000	29 244 000
a29	Transfer of operating revenues	6 323 000	1 990 000	2 612 000	1 686 000
a30	Transfer of operating expenses	6 323 000	1 990 000	2 612 000	1 686 000
a31	Operating profit / loss	38 880 000	-2 501 000	48 080 000	28 571 000
a43	Interest revenues	193 000	123 000	82 000	349 000
a44	Interest expenses	10 511 000	7 351 000	869 000	7 000
a45	Other financial revenues	60 074 000	99 420 000	53 543 000	30 462 000
a46	Other financial expenses	84 859 000	105 637 000	56 869 000	49 229 000
a49	Profit / loss from financial operations ( transactions )	-35 103 000	-13 445 000	-4 113 000	-18 425 000
a50	Income tax on ordinary income	2 125 000	483 000	10 057 000	4 316 000
a51	Due tax	7 701 000	1 604 000	8 371 000	2 515 000
a52	Tax deferred	-5 576 000	-1 121 000	1 686 000	1 801 000
a53	Operating profit / loss ordinary activity	1 652 000	-16 429 000	33 910 000	5 830 000
a59	Operating profit / loss extraordinary activity	0	0	0	0
a61	Profit / loss of current accounting period (+/-)	1 652 000	-16 429 000	33 910 000	5 830 000
a62	Profit / loss before tax (+/-)	3 777 000	-15 946 000	43 967 000	10 146 000
	Operating cash flow	-17 646 000	73 838 000	322 396 000	105 023 000
	Investment cash flow	-39 997 000	-26 379 000	-11 452 000	-66 711 000
	Financial cash flow	101 276 000	-87 374 000	-66 123 000	-90 000 000
	Receivables after due date total	31 836 000	78 982 000	20 880 000	7 802 000
	Liabilities after due date total	26 329 000	15 823 000	1 895 000	7 736 000

Balance indices		31.12.2008	31.12.2009	31.12.2010	31.12.2011
Return on total assets ROA (in %)	a62/r1 * 100	0,25	-1,22	3,40	0,81
Return on equity ROE (in %)	a62/r68 * 100	0,36	-1,54	4,11	1,03
Return on sales ROS (in %)	a62/a1 * 100	0,14	-0,65	2,07	0,52
Turnover of receivables (in days)	r49/a1 * 365	17,13	25,36	14,77	8,42
Turnover of liabilities (in days)	r103/a1 * 365	21,46	13,11	19,64	29,12
Turnover of inventories (days)	r32/a1 * 365	80,45	71,29	68,31	85,04
Net working capital (in ths. CZK)	r31 - r102 - r116 - r117	438 007,00	489 970,00	586 192,00	504 719,00
Ratio of accounts payable to accounts receivable (in %)	(r39+r48) / (r91+r102) * 100	73,58	131,74	61,85	35,10
Ratio of profit/loss to tangible assets (in%)	r3 / a1 * 100	22,91	22,89	23,19	25,33
Current ratio	r31 / (r102+r116+r117)	2,02	3,05	3,88	3,05
Quick ratio	(r58+r48) / (r102+r116+r117)	0,55	0,95	1,83	1,14
Cash ratio	r58 / (r102+r116+r117)	0,14	0,09	1,31	0,87
Debt ratio I (in %)	(1-r68/r67) * 100	30,16	20,45	17,33	21,24
Debt ratio II (in %)	r85/r67 * 100	29,19	18,61	16,09	20,11

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.54.33
UK Pound	1	Rs.82.56
Euro	1	Rs.70.10

INFORMATION DETAILS

Report Prepared by :

PRL

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
--	NB	New Business	--

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.

MIRA INFORM REPORT

Company name and address

Summary

Unit