cgsr project final

8/7/2019 CGSR project final

1/53


2/53

INDEX

AIM OF STUDY

INTRODUCION

INDUSTRY ANALYSIS

COMPANY WISE ANALYSIS

o TITAN INDUSTRIESo SHOPPERS STOPo PANTALOONSo BOMBAY DYEING

APPENDIX


3/53

AIM OF STUDY

Our basic aim is to find the relation between performance of firm and the governance

mechanism. We used Tobins Q for measuring firm performance. We have chosen retail industry

for the same purpose. First we calculated Tobins Q of various companies of the same industry

of last 3 years. After that we found t he relation between Tobins Q and number of boardmembers & regression line between Tobins Q and board Composition.


4/53

INTRODUCTION

Retail consists of the sale of goods or merchandise from a fixed location, such as a department

store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by thepurchaser.

Retailing may include subordinated services, such as delivery. Purchasers may be

individuals or businesses. In commerce, a "retailer" buys goods or products in large quantitiesfrom manufacturers or importers, either directly or through a wholesaler, and then sells smaller

quantities to the end-user. Retail establishments are often called shops or stores. Retailers are atthe end of the supply chain. Manufacturing marketers see the process of retailing as a necessary

part of their overall distribution strategy. The term "retailer" is also applied where a serviceprovider services the needs of a large number of individuals, such as a public utility, like electric

power.

Shops may be on residential streets, shopping streets with few or no houses or in a shoppingmall. Shopping streets may be for pedestrians only. Sometimes a shopping street has a partial or

full roof to protect customers from precipitation. Online retailing, a type of electroniccommerce used for business-to-consumer (B2C) transactions and mail order, are forms of non-

shop retailing.

Shopping generally refers to the act of buying products. Sometimes this is done to obtainnecessities such as food and clothing; sometimes it is done as a recreational activity.

Recreational shopping often involves window shopping (just looking, not buying) and browsingand does not always result in a purchase.

A marketplace is a location where goods and services are exchanged. The traditional marketsquare is a city square where traders set up stalls and buyers browse the merchandise. This kind

of market is very old, and countless such markets are still in operation around the whole world.

In some parts of the world, the retail business is still dominated by small family-run stores, but

this market is increasingly being taken over by large retail chains.

Retail is usually classified by type of products as follows:

Food products Hard goods ("hardline retailers") - appliances, electronics, furniture, sporting goods, etc. Soft goods - clothing, apparel, and other fabrics.

There are the following types of retailers by marketing strategy:

Department stores - very large stores offering a huge assortment of "soft" and "hardgoods; often bear a resemblance to a collection of specialty stores. A retailer of such storecarries variety of categories and has broad assortment at average price. They offer

considerable customer service.

Discount stores - tend to offer a wide array of products and services, but they competemainly on price offers extensive assortment of merchandise at affordable and cut-rate

prices. Normally retailers sell less fashion-oriented brands. However the service isinadequate.


5/53

General merchandise store - a hybrid between a department store and discount store; Supermarkets - sell mostly food products; Warehouse stores - warehouses that offer low-cost, often high-quantity goods piled on

pallets or steel shelves; warehouse clubs charge a membership fee;

Variety stores or "dollar stores" - these offer extremely low-cost goods, with limitedselection.

RETAIL LAWS IN INDIA

The retail sector is one of the most important parts of the Indian economy, making up 10 percentof its economy, as well as 8 percent of its workforce. Despite its size, many of the businesses that

operate within the country are family-owned and operate within their houses. Retail laws in Indiaare mainly placed in the subsections of consumer rights and trading standards, but they can be

tricky to enforce.

BACKGROUND

The growth in India's retail sector has grown as fast as it has in the last decade for three reasons:

Indian citizens have, overall, become richer due to the growing economy and therefore havemore disposable income. Following this growing income has been a growing desire for non-

essential goods. Since India doesn't have as organized a retail sector, it is easier to find and buygoods from independent retailers. The most popular sectors of the retail industry in India are the

food and mobile phone sectors, and as a result, competition is quite fierce and takes the form ofpricing wars, ultimately benefiting the customer.

SALE OF GOODS

This section of retail law is established under the Sale of Goods Act 1930--this decree coverssubjects such as the sale of goods, selling at the valuation price, description of goods and therights of a seller who hasn't received the entirety of an agreed payment.

AGREEMENT TO SELL

This part is concerned with the concept of contracts for the sale of goods (not, in this case,physical contracts but rather verbal agreements between the buyer and the seller). With these, the

seller must transfer or agree to transfer ownership of a good to a buyer for the pre-agreed price,with the agreement either being absolute or conditional, i.e., subject to conditions set by the

seller.

VALUATION PRICES

This goes into detail about the rules of agreeing prices, saying such valuations are set by a third-

party, i.e., the government and the central bank, and the agreement between the buyer and theseller must take this into consideration. If either party prevents the agreement of a formal

valuation, the affected party has the right to take legal action against the offending party.


6/53

DESCRIPTION OF GOODS

This part is designed for any goods that are marketed via description, such as a good sold over

the Internet or phone. Any good sold in this manner must meet the description originally given,and if a sample is given along with the description, both must ultimately represent the final

product correctly.

RIGHTS OF SELLER

This part of retail law has its own subsections. One example is the seller's right to prevent thedelivery of a good in certain cases, such as when the buyer has filed for bankruptcy. The seller is

within their right to withhold the good indefinitely or until the full payment has been made.

THEORETICAL CONCEPTS USED

Tobins q:

Tobin's q is a Market based measure and was developed by James Tobin of Yale University,Nobel laureate in economics in 1969. Compares the value of the stocks of a company listed in

the financial market with the value of a company's equity book value.

A proxy of the above formula is

Application:

If the market value reflected solely the recorded assets of a company, Tobin's q would be1.0.

If Tobin's q is greater than 1.0, then the market value is greater than the value of thecompany's recorded assets.


7/53

This suggests that the market value reflects some unmeasured or unrecorded assets of thecompany.

High Tobin's q value encourages companies to invest more in capital because they are"worth" more than the price they paid for them.

If Tobin's q is less than 1, the market value is less than the recorded value of the assets ofthe company. This suggests that the market may be undervaluing the company.

Lang and Stulz, found out that diversified companies have a lower Q-ratio than focusedfirms because the market penalizes the value of the firm assets.

Composition of BOD:

Composition of BOD= Number of independent directors/ Total number of BOD

Size of BOD is the number of people in board of director.

Correlation:

The correlation is one of the most common and most useful statistics. A correlation is a singlenumber that describes the degree of relationship between two variables. In excel it can be find

out as using correl function.

Regression:

Regression analysis includes any techniques for modelling and analyzing several variables, when

the focus is on the relationship between a dependent variable and one or more independentvariables. More specifically, regression analysis helps us understand how the typical value of the

dependent variable changes when any one of the independent variables is varied, while the otherindependent variables are held fixed. IN excel it can be found out using data analysis tool pack.

The straight line equation using regression comes out to be,

y = b1 + b2 x

Where,

Y= Tobins q

X= Composition of BOD

The value of b1 and b2 tells the relationship between x and y. Also information like R Square and

Standard deviation tells about the fit of the model as a whole.


8/53

INDUSTRY ANALYSIS

Five companies have been taken as listed in the Bombay Stock Exchange:

1) Titan Industry

2) Shoppers Stop

3) Pantaloons

4) Bombay Dyeing

The consolidated data of the industry is as follows:

Tobins Q:

2007-08 2008-09 2009-10

Titan Industry 0.80 0.50 1.31

Shoppers Stop 0.26 0.31 0.26

Pantaloons 0.59 0.61 0.45

Bombay Dyeing 0.96 0.81 1.06

Average Tobins Q 0.645 0.555 0.77

Number of Board members:

2007-08 2008-09 2009-10

Titan Industry 12 12 12

Shoppers Stop 9 10 10

Pantaloons 9 10 11

Bombay Dyeing 13 14 12

Average 10.75 11.5 11.25


9/53

Board Composition:

2007-08 2008-09 2009-10

Titan Industry 0.33 0.5 0.5

Shoppers Stop 0.44 0.5 0.5

Pantaloons 0.67 0.6 0.5

Bombay Dyeing 0.25 0.42 0.46

Average 0.4225 0.505 0.49

Correlation between Board Size and Tobins Q

Column 1 Column 2

Column 1 1

Column 2 -0.237470674 1

The correlation value between Tobins Q and Board Size comes out to be -0.237. This shows

there is a inversely prepositional correlation between Board size and Tobins Q for the company.

So, as the board size will increase, the companys performance will decrease.

The reason for this can be that the average board size was increasing in 2009 increasing in

comparison to 2008, average Tobins Q decreases for the same years and again avg board size

decreases in 2010, Tobins Q increases for the same and its more closer to 1, that means

industry performance increased.


10/53

Regression between Tobins Q and Board Composition

Coefficients

Intercept 0.746885113

X Variable 1 -0.190938511

Y = A + BX

So, the equation thus formed is:

Y = -0.190938511X + 0.746885113

This negative value of slope shows that in a board size that if we try to increase the number ofindependent directors, it inversely effect the growth of industry so we are not suppose the

increase number of independent directors. And the less value of intercept clearly shows thatindependent directors are required for industry till an extant.


11/53

Jaypee Business School

A constituent of Jaypee Institute of Information Technology University

A-10, Sector 62, Noida (UP) India 201 307www.jbs.ac.in

Corporate Governance &

Social Responsibility

Company Name: Titan Industry

Submitted by:

Kshitiz Agrawal 06503853

Amreesh Tyagi 06503857


12/53

COMPANY PROFILE

Titan Industries is the organization that brought about a paradigm shift in the Indian watch

market when it introduced its futuristic quartz technology, complemented by internationalstyling. With India's two most recognized and loved brands Titan and Tanishq to its credit, Titan

Industries is the fifth largest integrated watch manufacturer in the world.

The success story began in 1984 with a joint venture between the Tata Group and the TamilNadu Industrial Development Corporation. Presenting Titan quartz watches that sported an

international look, Titan Industries transformed the Indian watch market. After Sonata, a valuebrand of functionally styled watches at affordable prices, Titan Industries reached out to the

youth segment with Fastrack, its third brand, trendy and chic. The company has sold 100 millionwatches world over and manufactures 12 million watches every year.

With a license for premium fashion watches of global brands, Titan Industries repeated itspioneering act and brought international brands into Indian market. Tommy Hilfiger, Hugo Boss

and FCUK as well as the Swiss made watch Xylys owe their presence in Indian market to TitanIndustries.

Entering the largely fragmented Indian jewellery market with no known brands in 1995, TitanIndustries launched Tanishq, Indias most trusted and fastest growing jewellery brand. Gold

Plus, the later addition, focuses on the preferences of semi-urban and rural India. Completing thejewellery portfolio is Zoya, the latest retail chain in the luxury segment.

Titan Industries has also made its foray into eyewear, launching Fastrack eyewear and

sunglasses, as well as prescription eyewear. The organization has leveraged its manufacturingcompetencies and branched into precision engineering products and machine building.

With over 624 retail stores across a carpet area of over 7,70,848 sq. ft. Titan Industries hasIndias largest retail network. The company has over 300 exclusive World of Titan' showrooms

and over 650 after-sales-service centers. Titan Industries is also the largest jewellery retailer inIndia with over 119 Tanishq boutiques and Zoya stores, over 28 Gold Plus stores and over 120

Titan Eye+ stores. The company has two exclusive design studios for watches and jewellery

Backed by 4,934 employees, two exclusive design studios for watches and jewellery, 11

manufacturing units, and innumerable admirers world over, Titan Industries continues to growand sets new standards for innovation and quality. The organization is all geared to repeat theTitan and Tanishq success story with each new offering.


13/53

CALCULATION FOR TOBINS Q


14/53

Market Cap = Total share x market price

Total share Market Price (lakhs) Market Cap

2008-2009 8413451 0.012125 102013.0934

2009-2010 6602453 0.010885 71867.70091

2010-2011 9562008 0.02824 270031.1059

Book value of Debt.

Secured

Loans Unsecured Loans

Book Value

Debt.

2008-2009 18854.91 6978.02 25832.93

2009-2010 11657.93 5865 17522.93

2010-2011 7279.04 0 7279.04

Book value of assets

Net Block Investments Current Assets

BookValue of

assets

2008-2009 28771.59 234.44 130351.79 159357.8

2009-2010 29948.18 159.51 148226.57 178334.3

2010-2011 28011.14 159.51 182347.22 210517.9


15/53

Tobbin's Q=(Market Cap. +Book Debt.)/Book Assets

Market Cap. Book Debt.

Book Value

Assets Tobbins'Q

2008-2009 102013.0934 25832.93 159357.82 0.802258

2009-2010 71867.70091 17522.93 178334.26 0.5012532010-2011 270031.1059 7279.04 210517.87 1.317276

CALCULATION FOR BOARD COMPOSITION

The composition and category of directors as of March 31, 2008 is as

follows:

The composition and category of directors as of March 31, 2009 is as follows:


16/53


17/53

SUMMARY OUTPUT

Regression Statistics

Multiple R 0.14971214

R Square 0.022413725

Adjusted R Square -0.95517255

Standard Error 0.577015234

Observations 3

ANOVA

df SS MS F Significance F

Regression 1 0.007633672 0.007633672 0.022927618 0.904330611

Residual 1 0.33294658 0.33294658

Total 2 0.340580252

Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%

Intercept 0.588243513 1.913743029 0.307378527 0.810152177 -23.72816722 24.90465425 -23.72816722 24.904654

X Variable 1 0.642042282 4.24017869 0.151418685 0.904330611 -53.23453626 54.51862083 -53.23453626 54.518620

The equation thus formed is

Y= 0.642042281899256X + 0.588243513316362

Here intercept is around 0.6 which shows that we decrease no. of independent directors to zero

than Tobins Q value will be 0.6which reflects that firms performance will reduce.

Similarly slope is equal to 0.64 i.e. if we reduce no. of independent directors or decrease in

boards composition than it will reduce Tobins Q in same amount. It shows that change in

boards composition will directly affect firms performance.

CORRELATION

Since there is no change in Board size so we are considering 3 cases

1. No change in Board sizeTobbin's Q Total board size

2008-2009 0.802257607 12

2009-2010 0.50125327 12

2010-2011 1.317276039 12

If no change in Total no. of directors than no correlation because there is no variation in

Board size.


18/53

2. Decrement in Board sizeTobbin's Q Total board size

2008-2009 0.802257607 12

2009-2010 0.50125327 11

2010-2011 1.317276039 12

If there is a decrement in board size than Negatively correlated -0.757518604053157

3. Increment in Board sizeTobbin's Q Total board size

2008-2009 0.802257607 12

2009-2010 0.50125327 13

2010-2011 1.317276039 12

If there is an increment in board size than Positively correlated 0.757518604053157


19/53



A-10, Sector 62, Noida (UP) India 201 307

www.jbs.ac.in

Corporate Governance &Social Responsibility

Company Name: Shoppers Stop

Submitted by:

C. M. V. Teja 06503857

Akhil P. S. Pundhir 06503870


20/53

COMPANY PROFILE

Shoppers Stop is an Indian department stores promoted by the K Raheja Corp Group (Chandru L

Raheja Group), started in the year 1991 with its first store in Andheri, Mumbai Shoppers Stop

Ltd has been awarded "the Hall of Fame" and won "the Emerging Market Retailer of the Year

Award", by World Retail Congress at Barcelona, on April 10, 2008. Shoppers Stop is listed onthe BSE. With the launch of the Navi Mumbai departmental store, Shoppers Stop has 34 stores in

15 cities in India.

Shoppers Stop is one of the leading retail stores in India. Shoppers Stop began by operating a

chain of department stores under the name Shoppers Stop in India. Shoppers Stop has 35

stores across the country and three stores under the name Home Stop.

Shoppers Stop retails a range of branded apparel and private label under the following categories

of apparel, footwear, fashion jewellery, leather products, accessories and home products. These

are complemented by cafe, food, entertainment, personal care and various beauty relatedservices.

Shoppers Stop launched its e-store with delivery across major cities in India in 2008. The

website retails all the products available at Shoppers Stop stores, including apparel, cosmetics

and accessories. Shoppers Stop opened stores in Amritsar, Bhopal and Aurangabad.

Shoppers Stop retails products of domestic and international brands such as Louis Philippe,

Pepe, Arrow, BIBA, Gini & Jony, Carbon, Corelle, Magppie, Nike, Reebok, LEGO, and Mattel.

Shoppers Stop retails merchandise under its own labels, such as STOP, Kashish, LIFE and

Vettorio Fratini, Elliza Donatein, Acropolis etc. The company also licensees for Austin Reed

(London), an international brand, whos men's and women's outerwear are retailed in India

exclusively through the chain. In October 2009, Shoppers Stop has bought the license for

merchandising Zoozoo the brand mascot for Vodafone India.

n April 2008, Shoppers Stop changed its logo and adopted the mantra "Start Something New

mantra. And introduced international brands like CK Jeans, Tommy Hilfiger, FCUK, Mustang,

and Dior across the stores. The focus of the reposition was on the service, ambience upgradation

and customer connect. Shoppers Stop connects with the youth audience through adopting the

communication routes relevant to youth, up the fashion quotient through merchandising, and

create ambience that connects with the mindset. The brand campaign addresses environment-

related issues in a youthful, tongue-in-cheek manner. Shoppers Stop as a brand active on social

media marketing platforms with Facebook and Twitter to connect with this audience.

Merchandising opportunities like the launched Zoozoo merchandise and film merchandise.

Shoppers Stops has a loyalty program called First Citizen. They also offer a co-branded credit

card with Citibank for their members.


21/53

Board of Directors:

Year 2010:

The Board of Directors comprises often members including one executive director and nine non

executive directors. The Company has a non executive promoter Chairman and the number ofindependent directors is one half of the total number of Directors. The independent directors on

the Board are professionals, technocrats and retail experts, who are senior, competent and highly

respected persons from their respective fields and provide strategic direction and thrust to the

operation of the Company.

The key decisions are taken after detailed deliberations and discussions by the Board. The

Company always ensures that Board members are presented with all the relevant information on

vital matters affecting the working of the Company including the information as interalia

specified under Annexure - IA of clause 49 of the Listing Agreement.

None of the Directors on the Board is a Member on more than ten Committees and Chairman of

more than five Committees (as specified in Clause 49), across all the companies in which they

are Directors.

The composition of the Board of Directors, their attendance at Board Meetings during the year

and at the last Annual General Meeting and the number of other Directorships and Committee

Memberships held by them in other Companies are given below:

Name of Directors Category Designation

Mr. Chandru L. Raheja Promoter & Non- ExecutiveDirector Chairman

Mr. Ravi C. Raheja Promoter & Non- Executive

Director

Director

Mr. Neel C. Raheja Promoter & Non- Executive

Director

Director

Mr. B. S. Nagesh Non Executive Director Vice Chairman

Mr. Gulu L. Mirchandani Independent & Non-

Executive Director

Director

Mr. Shahzaad S. Dalal Independent & Non-

Executive Director

Director

Prof. Nitin Sanghavi Independent & Non-Executive Director

Director

Mr. Deepak Ghaisas Independent & Non-

Executive Director

Director

Mr. Govind Shrikhande Executive Director President & CEO

Mr. Nirvik Singh Independent & Non-Executive Director

Director


22/53

In year 2009:

The Board of Directors comprises of ten members including two executive directors and eight

non executive directors. The Company has a non-executive promoter Chairman and the number

of independent directors is one half of the total number of Directors. The independent directors

on the Board are professionals, technocrats and retail experts, who are senior, competent andhighly respected persons from their respective fields and provide strategic direction and thrust to

the operation of the Company.



vital matters affecting the working of the Company including the information as interalia

specified under clause 49 Annexure - IA of the Listing Agreement.

None of the Directors on the Board is a Member on more than ten Committees and Chairman of

more than five Committees (as specified in Clause 49), across all the companies in which he is aDirector.





Mr. Chandru L. Raheja Promoter & Non- Executive

Director

Chairman

Mr. Ravi C. Raheja Promoter & Non- ExecutiveDirector

Director

Mr. Neel C. Raheja Promoter & Non- ExecutiveDirector

Director

Mr. B. S. Nagesh Non Executive Director Vice Chairman

Mr. Gulu L. Mirchandani Independent & Non-Executive Director

Director

Mr. Shahzaad S. Dalal Independent & Non-Executive Director

Director

Prof. Nitin Sanghavi Independent & Non-

Executive Director

Director

Mr. Deepak Ghaisas Independent & Non-Executive Director

Director

Mr. Govind Shrikhande Executive Director President & CEO

Mr. Nirvik Singh Independent & Non-

Executive Director

Director


23/53

In year 2008:

The Board of Directors comprises ofnine members including two executive directors and seven

non-executive directors. The Company has a non-executive Chairman and the number of

independent directors is more than one third of the total number of Directors. The independent

directors on the Board are professionals, technocrats and retail experts, who are senior,competent and highly respected persons from their respective fields and provide strategic

direction and thrust to the operation of the Company.



vital matters affecting the working of the Company including the information as inter-alia

specified under clause 49 Annexure - IA of the Listing Agreement.

None of the Directors on the Board is a Member of more than ten Committees and Chairman of

more than five Committees (as specified in Clause 49), across all the companies in which he is aDirector.





Mr. Chandru L. Raheja Promoter & Non- Executive

Director

Chairman

Mr. Ravi C. Raheja Promoter & Non- ExecutiveDirector

Director

Mr. Neel C. Raheja Promoter & Non- ExecutiveDirector

Director

Mr. B. S. Nagesh Non Executive Director Managing Director

Mr. Gulu L. Mirchandani Independent & Non-Executive Director

Director

Mr. Shahzaad S. Dalal Independent & Non-Executive Director

Director

Prof. Nitin Sanghavi Independent & Non-

Executive Director

Director

Mr. Deepak Ghaisas Independent & Non-Executive Director

Director

Mr. Govind Shrikhande Executive Director Chief Executive Officer

Mr. Nirvik Singh Independent & Non-

Executive Director

Director


24/53

Board Composition= No. of independent director/ Total board size

In year 2010 = 5/10 = 0.5

In year 2009 = 5/10 = 0.5

In year 2008 = 4/9 = 0.44

Market Based Measures for the company:

Calculating Tobins Q:

= Market capitalization+ Book Value of Total Debt

Book Value of total assets

For year 2010 = 0.26

For year 2009 = 0.31

For year 2008 = 0.26

Market capitalization= total share * market price (Rs. In millions)

For year 2010 = 64,80,870* 586.12= 379.86

For year 2009 = 80,43,005* 384.95= 309.62

For year 2008 = 7,26,890* 243.28= 17.68

Book value of depth value= Loan funds (Rs. In millions)

For year 2010 = 19,141,08

For year 2009 = 20,776.31

For year 2008 = 1729.31

Book Value of total Assets= Net Block+ investment+ current assets (Rs. In millions)

For year 2010 = 27,099.56+11,967.45+35,496.78= 74,563.79

For year 2009 = 23,550.60+9,744.56+35,087.68 = 68,382.84

For year 2008 = 2175.16+807.21+3602.18= 6584.55


25/53

Final measures of year (Rs. In millions)

2009-10

Outstanding Shares as on 31st march 2010 64,80,870

Average Price 586.12

Book Value of Total Assets 74,563.79

Book Value of Total Debt 19,141,08

Tobins Q 0.26

2008-09



Book Value of Total Assets 68,382.84

Book Value of Total Debt 20,776.31

Tobins Q 0.31

2007-08



Book Value of Total Assets 6584.55

Book Value of Total Debt 1729.31

Tobins Q 0.26


26/53

Correlation between Board Size and Tobins Q

Column

1

Column

2

Column

1 1

Column2 0.5 1

The correlation value between Tobins Q and Board Size comes out to be 0.5. This shows there

is a prepositional correlation between Board size and Tobins Q for the company. So, as the

board size will increase, the companys performance will improve.

The reason for this can be that the board size was 9 in 2008 and it remains same for the next two

consecutive years 2009 and 2010 with 10 board members. There is a drastic change in year 2009

and there is a big growth, in fact the market value of firm increases. This is made correct by the

company by increasing its board size in the next year lead the company to growth.

Regression between Tobins Q and Board Composition

Coefficients


X Variable 1 0.416666667

Y = A + BX

So, the equation thus formed is:

Y = 0.416666667X + 0.076666667

This low value of slope shows that in a board size that if we try to increase the number of

independent director, it does not really effect the growth of company because the company needssufficient board members to manage the work which is lacking in case of this company. And the

very less value of intercept clearly shows that without independent directors the companyperformance is nothing.


27/53




www.jbs.ac.in


Company Name: Pantaloons

Submitted by:

Kapil Ahuja 06503871

Ankur Garg 06503872


28/53

COMPANY PROFILE

Pantaloon Retail (India) Limited, is Indias leading retailer that operates multiple retail formats

in both the value and lifestyle segment of the Indian consumer market. Headquartered in

Mumbai (Bombay), the company operates over 16 million square feet of retail space, has over

1000 stores across 73 cities in India and employs over 30,000 people.

The companys leading formats include Pantaloons, a chain of fashion outlets, Big Bazaar, a

uniquely Indian hypermarket chain, Food Bazaar, a supermarket chain, blends the look, touch

and feel of Indian bazaars with aspects of modern retail like choice, convenience and quality and

Central, a chain of seamless destination malls. Some of its other formats include Brand Factory,

Blue Sky, aLL, Top 10 and Star and Sitara. The company also operates an online portal,

futurebazaar.com.

Future Value Retail Limited is a wholly owned subsidiary of Pantaloon Retail (India) Limited.

This entity has been created keeping in mind the growth and the current size of the companysvalue retail business, led by its format divisions, Big Bazaar and Food Bazaar.

The company operates 120 Big Bazaar stores, 170 Food Bazaar stores, among other formats, in

over 70 cities across the country, covering an operational retail space of over 6 million square

feet. As a focussed entity driving the growth of the group's value retail business, Future Value

Retail Limited will continue to deliver more value to its customers, supply partners, stakeholders

and communities across the country and shape the growth of modern retail in India.

A subsidiary company, Home Solutions Retail (India) Limited, operates Home Town, a large-

format home solutions store, Collection i, selling home furniture products and eZone focussed on

catering to the consumer electronics segment.

Pantaloon Retail is the flagship company of Future Group, a business group catering to the entire

Indian consumption space.


29/53

Future Group

Future Group, led by its founder and Group CEO, Mr. Kishore Biyani, is one of Indias leading

business houses with multiple businesses spanning across the consumption space. While retail

forms the core business activity of Future Group, group subsidiaries are present in consumer

finance, capital, insurance, leisure and entertainment, brand development, retail real estatedevelopment, retail media and logistics.

Led by its flagship enterprise, Pantaloon Retail, the group operates over 16 million square feet of

retail space in 73 cities and towns and 65 rural locations across India. Headquartered in Mumbai

(Bombay), Pantaloon Retail employs around 30,000 people and is listed on the Indian stock

exchanges. The company follows a multi-format retail strategy that captures almost the entire

consumption basket of Indian customers. In the lifestyle segment, the group operates Pantaloons,

a fashion retail chain and Central, a chain of seamless malls. In the value segment, its marquee

brand, Big Bazaar is a hypermarket format that combines the look, touch and feel of Indian

bazaars with the choice and convenience of modern retail.

The groups specialty retail formats include supermarket chain - Food Bazaar, sportswear retailer

- Planet Sports, electronics retailer - eZone, home improvement chain -Home Town and rural

retail chain - Aadhaar, among others. It also operates popular shopping portal -

www.futurebazaar.com.

Future Group believes in developing strong insights on Indian consumers and building

businesses based on Indian ideas, as espoused in the groups core value of Indianness. The

groups corporate credo is, Rewrite rules, Retain values.


30/53

Board of directors

2007-08 2008-09 2009-10

Name Type Name Type Name Type

Mr. Kishore Biyani Executive

Promoter


Promoter


Promoter

Mr. Gopikishan Biyani Non-

executive

Promoter

Mr. Gopikishan

Biyani

Non-executive

Promoter

Mr. Gopikishan

Biyani

Non-executive

Promoter

Mr. Rakesh Biyani Independent

Non

executive


Non executive


Non executive

Mr. Shailesh

Haribhakti

Independent

Non

executive

Mr. Shailesh

Haribhakti

Independent

Non executive

Mr. Shailesh

Haribhakti

Independent

Non executive

Dr. Darlie Koshy Independent

Non

executive


Non executive


Non executive

Mr. S. Doreswamy Independent

Non

executive


Non executive


Non executive

Mrs. Bala Deshpande Independent

Non

executive

Mrs. Bala

Deshpande

Independent

Non executive

Mrs. Bala

Deshpande

Independent

Non executive

Mr. Anil Harish Independent

Non

executive


Non executive


Non executive

Mr. V. K. Chopra Independent

Non

executive


Non executive


Non executive

- - Mr. Vijay Biyani Executive

Promoter

Mr. Vijay Biyani Executive

Promoter

- - - - Mr. Kailash Bhatia Executive

Promoter


31/53

Corporate Governance issue

a) Increasing No. of executive board of directors

b) Increasing No. of board of directors

Tobins Q

Pantaloons Retail Pvt. Ltd.

Year 2009-10 2008-09 2007-08

Share Price(A) Rs. 390.10 Rs. 157.60 Rs. 427.00

No. Of outstanding

Share(B)

15,30,718 38,985 15,777

Market Cap(C=A*B) Rs. 59,71,33,091.80 Rs. 61,44,036.00 Rs. 67,36,779.00

Total Liabilities(D) Rs. 22,49,64,00,000.00 Rs. 37,41,78,00,000.00 Rs. 28,11,86,00,000.00

Total Assets(E) Rs. 51,02,54,00,000.00 Rs. 61,50,76,00,000.00 Rs. 47,43,91,00,000.00

Tobin's Q((C+D)/E) 0.45 0.61 0.59

Board Composition


Year 2009-10 2008-09 2007-08

Size Of Board(A) 11 10 9

No. of Ind. Dir.(B) 6 6 6

Board Comp. Ratio(C=B/A) 0.55 0.60 0.67


32/53

Regression analysis of Tobins Q with Board Of composition


Year 2009-10 2008-09 2007-08


No. of Ind. Dir.(B) 6 6 6

Board Comp. Ratio(C=B/A)X 0.55 0.60 0.67

Tobin's Q(B)Y 0.45 0.61 0.59

Regression slope(m) 1.11

Regression intercept(c) -0.12

Regression Line equation y=1.11x-0.12

Here intercept is -0.12 which shows that we decrease no. of independent directors to zero thanTobins Q value will be negative which reflects that firms performance will become negative

when there are no independent directors. The executive director always thinks about family

benefits not in the direction of firm benefits. So there must be independent director who can

protect shareholders interest.

Similarly slope is equal to 1.11 which is more than 1 i.e. if we reduce no. of independent

directors or decrease in boards composition than it will reduce Tobins Q in same amount. It

shows that change in boards composition will directly affect firms performance.


33/53

Correlation b/w Tobins Q with size of board


Year 2009-10 2008-09 2007-08


Tobin's Q(B) 0.45 0.61 0.59

Correlation -0.82

As it shows that increasing board size reduces the firm performance. They are negatively

correlated.


34/53




www.jbs.ac.in


Company Name: Bombay Dyeing

Submitted by:

Anshul Pachauri 06503861

Ankur Saxena 06503880


35/53

COMPANY PROFILE

Bombay Dyeing established 1879) is the flagship company of the Wadia Group, engaged mainly

into the business of Textiles. Bombay Dyeing is one of India's largest producers of textiles. Its

current chairman is Nusli Wadia.

Bombay Dyeing was often in the news, apart from other things, for various controversies

surrounding its tussle with the late Dhirubha Ambani of Reliance Industries Limited and

with Calcutta based jutebaron Arun Bajoria.

The company sponsors many events, including Bombay Dyeing Gladrags Mrs. India contest.

Since the first store in 1879 and the only store manager, the growth has not only been in our

presence, but also in of how much we offer today. Stylish linens, towels, home furnishings,

leisure clothing, kids wear and a whole blissful range of other products are now available across

350+ exclusive Bombay Dyeing Retail or 2000+ Multi-brand Stores.

All products come with our hallmark finish, great textures, detailed design to match the latest

trends and fine quality which has been synonymous with Bombay Dyeing for over a century.

Delivering the best designer products at an outstanding value for money has always been our

motto and forte.


36/53

Board of Directors

In year 2008:

The board is headed by by the non-executive chairman, Mr. nusli N. Wadia, and is composed of

eminent persons with considerable professional experience in diverse fields and comprises amajority of Non-Executive directors. Over two thirds of its board consist of Non-Executive

Directors and these the majority are independent directors. The details are given blow:

Total no. of directors = 13


37/53

In year 2009:

The board is headed by by the non-executive chairman, Mr. Nusli N. Wadia, and is

composed of eminent persons with considerable professional experience in diverse fields and

comprises a majority of Non-Executive directors. Over two thirds of its board consist of

Non-Executive Directors and these the majority are independent directors. The details aregiven blow:



38/53

In year 2010:

The board is headed by by the non-executive chairman, Mr. Nusli N. Wadia, and is

composed of eminent persons with considerable professional experience in diverse fields and

comprises a majority of Non-Executive directors. Over two thirds of its board consists of

Non-Executive Directors and these the majority are independent directors. The details aregiven blow:



39/53

Regression Analysis

Year Tobins Q Board

Composition

Total Board

Size

2008 0.96 0.25 132009 0.81 0.42 14

2010 1.06 0.46 12

Coefficients


X Variable1

0.073726542

The equation of the regression comes as Y=0.91+.07X

Y= Tobbins Q

X= Board Composition

It shows that if we increase the board composition which means that the number of independent

directors should be more than previous, the Tobbins Q will also increase which implies positive

relationship with the firm performance.

The slope is 0.91, when implies that the firm is able to perform to a very good extent even if

there is no independent director. The firm definitely remains undervalued. If we desire the firmto perform at the optimum level i.e Tobbins Q value should reach 1.

Desired Board composition: 1.28, which means that definitely, the number of independent

directors should be more than the board size which is not possible in any case.

Co-Relation Analysis

Column

1

Column

2

Column1 1

Column

2

-0.9934 1

The above co-relation table clearly shows that there is negative co-relation between Board Size

and the firm performance. If the Board Size increases, the firm performance degrades. The same


40/53

is implied from the regression analysis too. The board size and the Tobbins Q are inversely

proportional.

Definitely, the Bombay Dyeing should look into to decrease the Board size, but on the same they

should also bring more number of independent directors on the Board.

CEO Duality

For the three consistent years, the Ness Wadia is the son of the Chairman Mr. Nulsi Wadia is the

Joint Managing Director of the company which definitely doesnt showcase the direct CEO

duality. But as both of the designation belongs to the family members, the family seems to be

more powerful in controlling the company as a whole.

Board Composition

There is one interesting note in the Board of the Directors that Mr. Kesubh Mahindra, thepromoter of Mahindra Group is there in the board as the independent director which

compiles to many issues. There issues are that Mahindra Group and the Bombay Dyeing

both are sharing some common business motive which is not shown to the public.

Mr. P. V. Kuppuswamy retired as the Joint Managing Director of the Company effective

31st March, 2010. Mr. P. V. Kuppuswamy during his tenure of 28 years with the

Company, including 16 years as a Director.

The information about the every meeting attended, remuneration policy and the all

designations of the Board members are mentioned in the annual reports the firm.

Clause 49

Pursuant to Clause 49 of the Listing Agreement a Management Discussion and Analysis Report

is given in the Annual Company Report. Moreover, the separate section on the corporate

governance is also disclosed in the annual report of the firm.

Companys Philosophy on Code of Governance:

Your Company is fully committed to the principles of good corporate governance. In keeping

with this commitment your Company has been upholding fair and ethical business and corporate

practices and transparency in its dealings and continuously endeavors to review, strengthen and

upgrade its systems and processes so as to bring in transparency and efficiency in its various

business segments.


41/53

Remuneration Policy:

Payment of remuneration to the Joint Managing Directors is governed by the respective

Agreements executed between them and the Company. Their Agreements are approved by the

Board and by the shareholders. Their remuneration structure comprises salary, incentive,

commission linked to profits, bonus, benefits, perquisites and allowances, contribution toprovident fund, superannuation and gratuity. The Non-Executive Directors do not draw any

remuneration from the Company other than sitting fees and such commission as may be

determined by the Board from time to time.

The Agreements with the Joint Managing Directors are for a period of five years. Either party to

the Agreement is entitled to terminate the Agreement by giving not less than six calendar

months prior notice in writing to the other party; provided that the Company shall be entitled to

terminate the incumbents employment at any time by payment to him of six months salary in

lieu of such notice.

The Company has not granted any stock options to whole-time Directors during the year. No

stock options which were granted in previous years to whole-time Directors were outstanding for

vesting or for exercise at the beginning of the year.


42/53

Appendix


43/53


44/53


45/53


46/53


47/53


48/53


49/53


50/53


51/53


52/53


53/53

cgsr project final

Documents