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(With reference to course, Financial Management, MGT 517)
Ms.Anushital Sinha Department of Management LSB, LPU.
Vishal Kr. Jaiswal Roll no.-A58 Section- R1903 Gr. - 1 (Backlog) Reg. - 10812543
Term paper is a form of articles where one enriched their knowledge about the particular topic. This will give more concepts to understand the topic in dept. Not only the concept but also it gives us to know more about the company in which we are assigned to. Thus we can collect pool of knowledge. It is my sincere thanks to my respected Mam Ms. ANUSHITAL SINHA who has help me a lot to complete this term paper. Without her effort it is nowhere to complete this term paper. Her suggestions and guidelines about the topic make me help to complete this term paper in time. And also I would like to thank some of my friends who have helped me in discussing about the topic and to precede the term paper as well.
Decision making is a fundamental part of the research process. Decisions regarding that what you want to do, how you want to do, what tools and techniques must be used for the successful completion of the project. In fact it is the researcher’s efficiency as a decision maker that makes project fruitful for those who concern to the area of study. Basically when we are playing with computer in every part of life, I used it in my project not for the ease of my but for the ease of result explanation to those who will read this project. The project presents the role of financial system in life of persons. I had toiled to achieve the goals desired. Being a neophyte in this highly competitive world of business, I had come across several difficulties to make the objectives a reality. I am presenting this hand carved efforts in black and white. If anywhere something is found not in tandem to the theme then you are welcome with your valuable suggestions.
VISHAL KUMAR JAISWAL
TOPIC • • • • • • • • • • Background, history, management of BATA company Company position relative to industry Change in its share price over a year Capital structure for last 3 years Liquidity position Financial credibility through balance sheet, profit and loss account Credit rating of company IPO issues made by companies during last 5 years
Track and report news relevant to company chronologically and its impact on share price of the company
The leather Industry in India occupies a place of prominence in the Indian economy, in view of its massive potential for employment, growth and exports. India’s abundance of raw materials (10% of the world raw material) in terms of raw skins and hides and its comparatively low tanning costs makes it the second among the footwear producing countries next to China. However, India produces more of gents footwear, while the world’s major production is in ladies footwear.
Indian Footwear Industry
The Footwear Industry is a significant segment of the Leather Industry in India. India ranks second among the footwear producing countries next to China. The industry is labour intensive and is concentrated in the small and cottage industry sectors. While leather shoes and uppers are concentrated in large scale units, the sandals and chappals are produced in the household and cottage sector. India produces more of gents. footwear while the world’s major production is in ladies footwear. In the case of chappals and sandals, use of non-leather material is prevalent in the domestic market The major production centers India are Chennai, Ranipet, Ambur in Tamil Nadu, Mumbai in Maharastra, Kanpur, Jalandhar, Agra and Delhi.
The Company was originally incorporated as Bata Shoe Company Limited on December 23, 1931 under Indian Companies Act, 1913 for the purpose of manufacturing and marketing of all types of footwear, footwear components, leather and products allied to the footwear trade. Subsequently, the Company changed its name to .Bata Shoe Company Private Limited. on April 6, 1956 upon conversion into private company. The Company changed its name from .Bata Shoe Company Private Limited. To Bata Shoe Company Limited., upon conversion to a public company on April 18, 1973. The name was once again changed to the current name, i.e. Bata India Limited, on April 23, 1973. The Company was promoted by Leader A.G., St. Moritz, Switzerland, a member of the multinational Bata Shoe Organisation (BSO) with a 100% Equity Shareholding, and
consequently, the Company too is a member of the BSO. The BSO consists of independently run companies operating in several countries across the world. Bata Limited, Toronto, Canada acts as the headquarters of BSO. Bata Shoe Organization provides an important interchange of new manufacturing technologies, machine design, factory lay-out plans advertising market forecasts, fashion trends, modern marketing techniques, new material testing and also information on the most advanced machinery and technology for production of shoes are made available to the Bata group of companies, including Bata India Limited. On April 23, 1973, the name was changed to Bata India Limited. On June 25, 1973, the Company made its first public issue of shares.
• Key Milestones
Date/Year Event 1894- The Bata Shoe Organization was founded by Tomas J. Bata, a ninth generation shoe maker 1931- The Company was incorporated in India. 1933- The production of footwear commenced in a rented premises at Konnagar, a few miles away from Kolkata, where for the first time rubber and canvas shoes were manufactured in India. October 28,1934- The foundation stone was laid on land purchased from the Port Commissioners and small landowners in the outskirts of Kolkata and the first manufacturing unit was set up, at a place now known at Batanagar. The factory shifted from Konnagar to Batanagar. 1936- The construction work at the Batanagar factory was completed, and factory operation shifted from Konnagar to Batanagar. Towards the end of 1936, the factory produced leather footwear for the first time. 1937- Batanagar tannery became operational towards the end of 1937 1939- The Batanagar factory was complete in terms of every activity related to footwear. The Batanagar township grew to become self-sufficient with the acquisition of more land and the erection of schools, places of worship, hospitals, entertainment and recreational centres. 1940 . 45- During the World War II the factory’s production was geared to meet requirements. 1942- A footwear manufacture plant, a machinery department was set up at Batanagar, which produced the first India-made major shoe machine. Simultaneously, several auxiliary departments were started. This was followed by the setting up of the factory at Bataganj, Bihar. war
1950- Bata successfully launched the brand .Hawai.. 1951- The rubber/canvas factory was set-up at Faridabad, Haryana. 1952- One of Asia’s largest tanneries was set-up at Mokemehghat, Bihar. 1988- The Bata factory was set-up in Peenya, Bangalore. 1994- The Company’s factory at Hosur in the State of Tamil Nadu became operational, which was originally an Export Oriented Unit, but now caters to the domestic Indian market 1993- Batanagar factory became the first Indian shoe-manufacturing unit to receive the ISO 9001 certification.
Awards - 2009-10 Bata India receives the Superbrand award for 2009-2010
Awards - 2009 Bata India awarded the prestigious Images award 2009 Bata India, the leading footwear retailer in the country was awarded the Images award for the Most Admired Retailer of the Year – Fashion & Lifestyle. This was announced at the India Retail Forum in Mumbai, where the top retail companies in India converged.
Expanding & nurturing the largest footwear retail network A retail network of over 1200 stores gives us a reach unmatched by any other company. The Bata Shoe Store is amongst the most recognisable and favoured landmark in any major market in India.
Bata India continues with its Superbrand status The Bata brand was chosen after a very in-depth and detailed evaluation procedure. Marketing and Business professionals who compromise the Superbrands Council evaluate and select on parameters like trust, emotional loyalty and re-call of the brand which creates strong customer loyalty. Bata India awarded Amity Corporate Excellence Award Bata India Ltd. has been awarded the Amity Corporate Excellence Award for Best Retail Chain. This is the third time in a row that Bata India has been honoured with this prestigious award for Corporate Excellence. The Corporate Excellence Awards are held annually by Amity International Business. Awards - 2008 Amity Corporate Excellence Bata India has been awarded the AMITY CORPORATE EXCELLENCE AWARD on 21st February 2008. This award has been given for Bata's excellent performance and retail growth during the past year.
IMAGES Retail Award This award was received in the footwear category on on 6th September 2007. This award was a part of Reid & Taylor Awards for Retail Excellence presented during India Retail Summit 2006.
Awards – 2007 Super Brands Award It is awarded to the 1st top ten Super brands of India. Super brand signifies the recognition that the consumer is giving to the Brand Image, Brand Value and Brand Delivery. The award ceremony was held in Mumbai
on 12th April 2007 FMCG Consumer Reaction Award Bata won FMCG Consumer Reaction Award in Fashion & Specialties (Shoes) on March 2007. The Award was presented by: Bharati Vidyapeeth's Institute of Management Studies & Research (BVIMSR).
Awards - 2006 Retailer of the Year Award This award was received on 24th Nov 2006 in the footwear category. This award was a part of Reid & Taylor Awards for Retail Excellence presented during India Retail Summit 2006.
Amity Corporate Excellence Award This award was given to Bata by Amity International Business School on 22nd – 24th Feb 2006 for having achieved an enviable position of one of the best and most admired company of the world with their unparalleled performance.
Main Objects Of The Company
The main objects of the Company as detailed in its MoA are: To carry on business as boots and shoes manufacturers and dealers, leather merchants and manufacturers, leather dressers, tanners, dealers in hides and skins and other materials, manufacturers of and dealers in rubber goods. To carry on the business of manufacturers and dealers in machinery for the production of boots and shoes and other leather and rubber goods and to carry on all business connected therewith. To establish and maintain shoe-repair shops and/ or orthopaedical departments.
Business of the Company Bata India Limited manufactures and markets all types of footwear, footwear components and leather. In addition, the Company markets products related to footwear, accessories, garments, sports goods and other merchandise. The production units of the Company are situated in Batanagar (West Bengal), Faridabad (Haryana), Bataganj (Bihar), Mokamehghat (Bihar), Bangalore (Karnataka) and Hosur (Tamil Nadu). The Company owns or operates number of national brands and international brands which belong to the global BSO. As per the international marketing principles and philosophy, the Company markets its footwear and allied products according to the customer profile and the market segment that it targets.
Management Of Bata India
Name P M Sinha S Sinha N Sankar J Carbajal Jack G N Clemons Designation Chairman / Chair Person Director Director Director Director
Name Marcelo Vilagran V Narayanan Uday Khanna M K Sharma George Nigel John Clemons
Designation Managing Director Director Director Director Director
Bata company position relative to industry
Bata Company is increasing day to day in current scenario than other footwear company. There are some figures …………
Bata India profit (PBT) grows by 67 % in Q4, 2009, Revenues grow by 13 % Company declares best ever results, Announces 30% dividend, Opens 76 new stores in 2009 Bata India Limited, the largest retailer and the leader in the footwear market in India today declared its best ever financial results for the quarter ending December 31st 2009, with a growth of 66.9% in Profit Before Tax (PBT) at Rs. 3,865.8 lacs against Rs. 2,316.9 lacs in the same period last year. The Company’s Net Turnover grew by 12.9% at Rs. 28,809.0 lacs as against Rs. 25,522.5 lacs in the same period last year. The Company’s Profit Before Tax (PBT) for the full year ended December 31st 2009, grew by 40 % at Rs. 10,026.3 lacs as against Rs. 7,184 lacs and Turnover by 11% at Rs. 109,017.5 lacs as against Rs. 98,359.5 lacs during the same period last year (2008). The Company also announced a dividend of Rs. 3/- per share (30% on an equity share of par value of Rs. 10/- each) for the year 2009. The payment is subject to the approval of the shareholders in the ensuing Annual General Meeting of the Company. Announcing the results, Mr. Marcelo Villagran, Managing Director & CEO, Bata India Limited said “The year 2009 has been a remarkable year for Bata in India. During this year, we opened a record 76 new stores, adding over 200,000 square feet of prime retail space to our business. We also renovated 40 existing Stores. These new & renovated Bata Shoe Stores continue to help in
ensuring that Bata remains the most preferred brand for consumers in the footwear retail market in India. Bata Industrials, our venture into the safety footwear market in 2008, has been received very well with volumes doubling in 2009. The brand also received the coveted quality certification ell from Bureau of Indian Standards.” Bata India Ltd. is on a forward course and will continue to invest and implement several growth initiatives like large format stores, trendy collections and a new initiative of online sales through res, www.batagiftvoucher.com, to meet the evolving demands of its customers in India.
Change In Its Share Price Over A Year
Analysis of data reveals that there is very high fluctuation in the share price of BATA Company over the period of one year. In dec 18 it was at Rs.80 and march 28 it was down to Rs.60 then afterwards it start increase and reach to Rs.150 and stable for one month till from june t july. to In may 2010 share price was Rs.275 per share. Overall it is clear from the trend analysis that market price of company share increasing continuously. It is showing positive trend of company.
Capital Structure For Last 3 Years
Capital Structure Period
From 2008 2007 2006 2005
To 2008 2007 2006 2005 Equity Share Equity Share Equity Share Equity Share
Auth orized Capital (Rs. cr) 70 70 70 70
(Rs. cr) 64.29 64.29 64.29 64.29
Shares (nos) 642637 70 642637 70 642637 70 642637 70
Face Value 10 10 10 10
Capital 64.26 64.26 64.26 64.26
This is a capital structure of a BATA Company which is showing that company has not used any portion of debt in his capital structure and company has not make any change in his capital structure. It is using only equity because if it use debt then it will be like a fixed liability and company has to interest to debenture holders whether it earn profit or not.
Liquidity position of BATA company
Dec 05 Dec 04 Current Ratio Quick Ratio Debt Equity Ratio Long Term Debt Equity Ratio 0.98 0.50 1.24 0.52 1.25 0.53 0.43 0.13
1.28 0.41 0.26 0.03
1.28 0.46 0.24 0.03
1.38 0.53 0.18 0.03
If I talk regarding liquidity position about a company then it can be judged from the liquidity and solvency ratio of a company that company’s current ratio is 0.98 in dec 04 and then it increased to 1.38 in dec 08 which is showing that company current ratio is near to its rule of thumb 1:1
Quick ratio of company is also very good because its rule of thumb is .50:1 and company quick ratio is .50 in 2004 and .53 in 2008 which is showing a good sign of progress. In case of debt equity ratio of company there is no particular rule of thumb but company company has reduced its debt part in his total capital. In Dec 04 debt equity ratio was 1.24 which has decreased in Dec 08 to 0.18. Reason for this is mention in the capital structure of company part.
Financial credibility through balance sheet, profit and loss account
Balance Sheet of Bata India Dec '04 12 mths Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities 51. 42 51. 42 0.0 0 0.0 0 48. 56 84. 18 184 .16 112 .16 12. 19 124 .35 308
------------------- in Rs. Cr. -------------------
Dec '05 12 mths
Dec '06 12 mths
Dec '07 12 mths
Dec '08 12 mths
64.26 64.26 0.00 0.00 114.69 82.52 261.47 59.37 17.17 76.54 338.01
64.26 64.26 0.00 0.00 119.22 28.52 212.00 48.06 0.27 48.33 260.33
64.26 64.26 0.00 0.00 147.23 39.89 251.38 45.07 6.73 51.80 303.18
64.26 64.26 0.00 0.00 189.17 37.72 291.15 35.91 8.72 44.63 335.78
.51 Dec '04 12 mths Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets 358 .01 219 .75 138 .26 1.3 9 4.8 5 262 .16 48. 04 13. 04 323 .24 61. 21 1.6 2 386 .07 0.0 0 217 .03 31. 12 248 .15 137 .92
Dec '05 12 mths
Dec '06 12 mths
Dec '07 12 mths
Dec '08 12 mths
363.26 231.81 131.45 0.47 4.98 278.76 27.94 7.03 313.73 61.25 13.33 388.31 0.00 168.97 36.31 205.28 183.03
306.58 227.17 79.41 0.84 17.24 276.36 21.61 4.16 302.13 43.43 10.14 355.70 0.00 177.71 15.17 192.88 162.82
324.52 220.60 103.92 0.31 17.25 303.74 22.86 13.81 340.41 53.24 18.91 412.56 0.00 198.40 33.65 232.05 180.51
349.34 232.31 117.03 0.86 17.25 292.23 25.89 8.80 326.92 96.75 17.96 441.63 0.00 194.36 54.26 248.62 193.01
Miscellaneous Expenses Total Assets Contingent Liabilities Book Value (Rs)
26. 11 308 .53 111 .36 19. 44
18.08 338.01 127.49 27.85
0.00 260.31 127.35 28.55
1.20 303.19 82.07 32.91
7.65 335.80 54.62 39.44
Profit & Loss account of Bata dia
------------------- in Rs. Cr. ------------------De c '04 12 mths Dec '05 12 mths Dec '06 12 mths Dec '07 12 mths Dec '08 12 mths
Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost 38 3.36 22. 49 375.32 22.65 370.96 24.03 441.63 25.74 458.74 28.22 72 6.34 30. 51 69 5.83 28.81 12.95 65 4.07 734.62 27.49 707.13 12.20 18.78 738.11 795.38 24.45 770.93 14.68 1.56 787.17 891.34 23.58 867.76 12.45 29.28 909.49 1,012.82 22.86 989.96 1.63 -10.69 980.90
Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses
18 5.01 6.3 7 87. 60 8.4 2 0.0 0 69 3.25 De c '04 12 mths
180.75 3.71 110.78 8.10 0.00 701.31 Dec '05 12 mths 24.60 36.80 12.23 24.57 11.91 0.09 12.57 1.03 13.60 1.10 12.49 325.99 0.00
184.86 24.82 107.92 2.53 0.00 715.12 Dec '06 12 mths 57.37 72.05 10.57 61.48 13.62 0.01 47.85 0.52 48.37 8.21 40.15 344.17 0.00
184.06 20.96 137.55 14.85 0.00 824.79 Dec '07 12 mths 72.25 84.70 13.54 71.16 15.92 0.09 55.15 -3.64 51.51 4.06 47.44 383.16 0.00
173.22 21.46 170.98 24.17 0.00 876.79 Dec '08 12 mths 102.48 104.11 17.30 86.81 18.91 0.09 67.81 4.03 71.84 11.10 60.74 418.05 0.00
Operating Profit PBDIT Interest PBDT Depreciation Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) Tax Reported Net Profit Total Value Addition Preference Dividend
10.37 39.18 11. 94 51.12 12. 33 0.0 9 63.54 0.7 9 62.75 0.0 0 62.75 30 9.88 0.0
Equity Dividend Corporate Dividend Tax Per share data (annualised) Shares in issue (lakhs) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs)
0 0.0 0 0.0 0 51 4.22 12.20 0.0 0 19. 44
642.64 1.94 0.00 27.85
642.64 6.25 0.00 28.55
642.64 7.38 20.00 32.91
642.64 9.45 25.00 39.44
Financial creditability of company is very strong. This thing is clear from the BALANCE SHEET and PROFIT AND LOSS of the company, which is showing that company’s profit is increasing year by year and for this company has reduced its operating and non operating expensed both in his profit and loss account. Second thing in the balance sheet of a company net worth of company has increased and as a opposite of this its total debt is decreased. Which states that company want to dependant only on its owners not on outsiders
Credit rating of companies
ICRA credit rating company upgraded the long term rating for bank facilities of Bata India Limited, reaffirms short term rating
IPO issues made by companies during last 5 years
company has not issued any IPO during its last 5 years period. Reason behind this is that company has already surplus amount of money with themselves and it no need to generate more funds for its expansion plan.
Track and report news relevant to company chronologically and its impact on share price of the Company
Company has declared interim dividend to shareholders from last 2 years consequently and as a result of this market price of share of company has increased. With the help of this step company has create a good positioning of him in the mind of its customers, here customers are considered shareholder of the company.
http://www.bataindia.com/index.htm http://www.bataindia.com/corporate.htm http://www.moneycontrol.com/india/stockpricequote/leatherproducts/bataindia/BI01 http://www.moneycontrol.com/financials/bataindia/balance-sheet/BI01 http://www.moneycontrol.com/annual-report/bataindia/directors-report/BI01 http://www.moneycontrol.com/company-article/bataindia/news/BI01 http://www.moneycontrol.com/company-facts/Bata/management/BI01 http://www.moneycontrol.com/company-facts/bataindia/history/BI01 http://www.moneycontrol.com/company-facts/bataindia/background/BI01 http://www.moneycontrol.com/company-facts/bataindia/dividend/BI01 http://www.moneycontrol.com/company-facts/bataindia/rights/BI01 http://www.bata.in/page.php?kon=2_0 http:// www.sebi.gov.in/dp/bata.pdf
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