bata company term paper

TERM PAPER

ON

(With reference to course, Financial Management,

MGT 517)

Submitted to: Submitted by: Ms.Anushital Sinha Vishal Kr. Jaiswal

Department of Roll no.-A58

Management LSB, Section- R1903

LPU. Gr. - 1 (Backlog)

Reg. - 10812543

AcknowledgementAcknowledgementAcknowledgementAcknowledgement

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.

PrefacePrefacePrefacePreface

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

CONTENTS :

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

• Bibliography

� INDUSTRY OVERVIEW

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.

� Brief History

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 war

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.

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.

• Achievement

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 Designation

P M Sinha Chairman / Chair Person

S Sinha Director

N Sankar Director

J Carbajal Director

Jack G N Clemons Director

Name Designation

Marcelo Vilagran Managing Director

V Narayanan Director

Uday Khanna Director

M K Sharma Director

George Nigel John Clemons 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

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

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

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.



ell with volumes doubling in 2009. The brand also received the coveted quality certification

from Bureau of Indian Standards.”


res, trendy collections and a new initiative of online sales through


Change In Its Share Price Over A Year

that there is very high fluctuation in the share price of BATA Company


afterwards it start increase and reach to Rs.150 and stable for one month till from june t





ell with volumes doubling in 2009. The brand also received the coveted quality certification


res, trendy collections and a new initiative of online sales through


that there is very high fluctuation in the share price of BATA Company


afterwards it start increase and reach to Rs.150 and stable for one month till from june to july.



� Capital Structure For Last 3 Years

Capital Structure

Period Instrument Auth

orized

Capital

Issued Capital - P A I D U P -

From To (Rs.

cr)

(Rs. cr) Shares

(nos)

Face

Value

Capital

2008 2008 Equity Share 70 64.29 642637

70 10 64.26

2007 2007 Equity Share 70 64.29 642637

70 10 64.26

2006 2006 Equity Share 70 64.29 642637

70 10 64.26

2005 2005 Equity Share 70 64.29 642637

70 10 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

Current Ratio

Dec 04

0.98

Dec 05

1.25

Dec 06

1.28

Dec

07

1.28

Dec 08

1.38

Quick Ratio 0.50 0.53 0.41 0.46 0.53

Debt Equity Ratio 1.24 0.43 0.26 0.24 0.18

Long Term Debt Equity

Ratio 0.52 0.13 0.03 0.03 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

Dec

'04 Dec '05 Dec '06 Dec '07 Dec '08

12

mths 12 mths 12 mths 12 mths 12 mths

Sources Of Funds

Total Share Capital 51.

42 64.26 64.26 64.26 64.26

Equity Share Capital 51.

42 64.26 64.26 64.26 64.26

Share Application Money 0.0

0 0.00 0.00 0.00 0.00

Preference Share Capital 0.0

0 0.00 0.00 0.00 0.00

Reserves 48.

56 114.69 119.22 147.23 189.17

Revaluation Reserves 84.

18 82.52 28.52 39.89 37.72

Networth 184

.16 261.47 212.00 251.38 291.15

Secured Loans 112

.16 59.37 48.06 45.07 35.91

Unsecured Loans 12.

19 17.17 0.27 6.73 8.72

Total Debt 124

.35 76.54 48.33 51.80 44.63

Total Liabilities 308 338.01 260.33 303.18 335.78

Balance Sheet of Bata India ------------------- in Rs. Cr. -------------------

.51

Dec

'04 Dec '05 Dec '06 Dec '07 Dec '08

12


Application Of Funds

Gross Block 358

.01 363.26 306.58 324.52 349.34

Less: Accum. Depreciation 219

.75 231.81 227.17 220.60 232.31

Net Block 138

.26 131.45 79.41 103.92 117.03

Capital Work in Progress 1.3

9 0.47 0.84 0.31 0.86

Investments 4.8

5 4.98 17.24 17.25 17.25

Inventories 262

.16 278.76 276.36 303.74 292.23

Sundry Debtors 48.

04 27.94 21.61 22.86 25.89

Cash and Bank Balance 13.

04 7.03 4.16 13.81 8.80

Total Current Assets 323

.24 313.73 302.13 340.41 326.92

Loans and Advances 61.

21 61.25 43.43 53.24 96.75

Fixed Deposits 1.6

2 13.33 10.14 18.91 17.96

Total CA, Loans & Advances 386

.07 388.31 355.70 412.56 441.63

Deffered Credit 0.0

0 0.00 0.00 0.00 0.00

Current Liabilities 217

.03 168.97 177.71 198.40 194.36

Provisions 31.

12 36.31 15.17 33.65 54.26

Total CL & Provisions 248

.15 205.28 192.88 232.05 248.62

Net Current Assets 137

.92 183.03 162.82 180.51 193.01

Miscellaneous Expenses 26.

11 18.08 0.00 1.20 7.65

Total Assets 308

.53 338.01 260.31 303.19 335.80

Contingent Liabilities 111

.36 127.49 127.35 82.07 54.62

Book Value (Rs) 19.

44 27.85 28.55 32.91 39.44

Profit & Loss account of Bata

India ------------------- in Rs. Cr. -------------------

De

c '04 Dec '05 Dec '06 Dec '07 Dec '08

12


Income

Sales Turnover 72

6.34 734.62 795.38 891.34 1,012.82

Excise Duty 30.

51 27.49 24.45 23.58 22.86

Net Sales 69

5.83 707.13 770.93 867.76 989.96

Other Income -

28.81 12.20 14.68 12.45 1.63

Stock Adjustments -

12.95 18.78 1.56 29.28 -10.69

Total Income 65

4.07 738.11 787.17 909.49 980.90

Expenditure

Raw Materials 38

3.36 375.32 370.96 441.63 458.74

Power & Fuel Cost 22.

49 22.65 24.03 25.74 28.22

Employee Cost 18

5.01 180.75 184.86 184.06 173.22

Other Manufacturing Expenses 6.3

7 3.71 24.82 20.96 21.46

Selling and Admin Expenses 87.

60 110.78 107.92 137.55 170.98

Miscellaneous Expenses 8.4

2 8.10 2.53 14.85 24.17

Preoperative Exp Capitalised 0.0

0 0.00 0.00 0.00 0.00

Total Expenses 69

3.25 701.31 715.12 824.79 876.79

De

c '04 Dec '05 Dec '06 Dec '07 Dec '08

12


Operating Profit -

10.37 24.60 57.37 72.25 102.48

PBDIT -

39.18 36.80 72.05 84.70 104.11

Interest 11.

94 12.23 10.57 13.54 17.30

PBDT -

51.12 24.57 61.48 71.16 86.81

Depreciation 12.

33 11.91 13.62 15.92 18.91

Other Written Off 0.0

9 0.09 0.01 0.09 0.09

Profit Before Tax -

63.54 12.57 47.85 55.15 67.81

Extra-ordinary items 0.7

9 1.03 0.52 -3.64 4.03

PBT (Post Extra-ord Items) -

62.75 13.60 48.37 51.51 71.84

Tax 0.0

0 1.10 8.21 4.06 11.10

Reported Net Profit -

62.75 12.49 40.15 47.44 60.74

Total Value Addition 30

9.88 325.99 344.17 383.16 418.05

Preference Dividend 0.0 0.00 0.00 0.00 0.00

0

Equity Dividend 0.0

0 0.00 0.00 12.85 16.07

Corporate Dividend Tax 0.0

0 0.00 0.00 2.18 2.73

Per share data (annualised)

Shares in issue (lakhs) 51

4.22 642.64 642.64 642.64 642.64

Earning Per Share (Rs) -

12.20 1.94 6.25 7.38 9.45

Equity Dividend (%) 0.0

0 0.00 0.00 20.00 25.00

Book Value (Rs) 19.

44 27.85 28.55 32.91 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.

� BIBLIOGRAPHY

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

http:// money.rediff.com/companies/bata-india/16510001

bata company term paper

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