PROJECT REPORT ON “BATA INDIA LTD” FOUNDATION B&T 2009-10 SUBMITTED TO: Mr. Piyush Pandey Ms. Preeti Dewan Ms. Anjuna Dhir Mr. Rahul Jain Mr. S.C Kapoor Faculty, Pearl Academy of Fashion SUBMITTED BY: ANKIT BEHL SOURABH KUMAR ADITI MALHOTRA Bata India Pvt. Ltd 1 ACKNOWLEDGEMENT We owe a great thanks to the people who have helped and supported us to make this Project Report on Bata India Limited. Our Deepest thanks to Mr. Rahul Jain who has mentored us and corrected our various documents with attention and care. He has taken pain to go through the project and make necessary changes when required. We would also thank our institution and faculty members without whom the project would have been a distant reality. Our special thanks to Mrs. Preeti Dewan Mehta for giving the report format, Mr. Piyush Pandey for enhancing computing skill, Mr. S. C Kapoor for motivating and teaching the human resource aspect of a business and Mrs. Anjuna Dhir for giving us a complete knowledge of marketing perspective. This report has been insightful and erudite experience that we have undergone. The credit for the completion of this report goes to Mr. Rahul Jain who has taught us and made us competent of understanding the intricacies. Without him help this report could not have been possible. Apart from our college faculty we would also like to thank staff of Bata India pvt ltd. of Faridabad Plant for answering our questions and providing us with the necessary information about the company. Ankit Behl Sourabh Kumar Aditi Malhotra Bata India Pvt. Ltd 2 Aim Of Project This report aims to enable an understanding of a wide range of business functions and contextual domains such as Behavior, finance, legal and marketing. By doing this report we able to apply both quantitative aspects of business, such as economics and accounting, and qualitative aspects such as OB, HRM and Industrial Law. Bata India Pvt. Ltd 3 TABLE OF CONTENTS S. No 1. 1.1 1.2 1.3 1.4 2. 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 3. 3.1 3.2 3.3 3.4 3.5 3.5.1 3.5.2 3.5.3 3.6 3.6.1 3.6.2 3.6.3 3.7 3.9 4. 4.1 4.2 5. 6. 7. 8. 9. 10. 11. 12. 12.1 12.2 Particulars Overview Of Indian Footwear Industry Production Capacity of shoe Industry Export & Import Overview Role of Government in shoe Industry Of India Raw Material Used For shoes Organization Profile Of Bata Share Holding Pattern Board of Director Management Organization Structure History Of Company Company Values Company Commitments Bata Position Today Brands of Company Internal & External Environment H R Policy Employee Categorization Corporate social responsibility Manpower Marketing Environment Macro Environment Micro Environment Internal Environment (The Company) Product Mix Price & Product Place Promotion STP of Bata Expansion & Future Plan Financial Analysis Analysis of Bata Report Competitor Analysis Factor That Will Affect Organization Demand Factor That Will Affect Organization Supply Implication Of Fiscal Policy Implication Of Momentary Policy SWOT Analysis Of Bata Recommendation Conclusion Competitor Profile Lakhani Liberty Bata India Pvt. Ltd Page No. 6 8 10 14 15 16 17 18 22 23 25 26 27 28 34 34 39 39 40 41 42 49 56 58 63 74 78 89 97 98 98 109 123 128 134 139 143 146 147 148 148 151 4 13. 14. 15. 16. 17. 17.1 17.2 17.3 17.4 17.5 17.6 17.7 17.8 18. 19. Minimum Wages Chart Work Place Safety Checklist Social Compliances Recent News Related To Footwear Industry Annexure Product Profile Of Bata Balance Sheet Of Bata Profit & Loss Of Bata Quarterly Result Of Bata Mutual Fund Activities Of Bata F I Activities Of Bata Balance Sheet Of Lakhani Balance Sheet Of Liberty Reference Report Check List Bata India Pvt. Ltd 154 156 163 169 173 173 181 183 185 187 188 189 190 191 193 5 1. Overview of 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 Chapels 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 Chapels and sandals, use of nonleather material is prevalent in the domestic market. The major production centers India are Chennai, Ranipet, Ambur in Tamil Nadu, Mumbai in Maharashtra, Kanpur in U.P., Jalandhar in Punjab, Agra and Delhi. The following table indicates concentration of units in various parts of the country Region Large & Medium SSI Household Scale Tamil Nadu 64 31 7 Delhi & up North 4 8 2 Agra, Kanpur 9 34 14 Calcutta 1 3 19 Bangalore 6 3 4 Mumbai 3 11 Others 13 10 3 The estimated annual footwear production capacity in 1999 is nearly 1736 million pairs (776 million pairs of leather footwear and 960 million pairs of non-leather footwear). Bata India Pvt. Ltd 6 Region-wise share of total estimated capacities is as follows Region Leather Shoes Non-leather Leather Shoe Shoes Uppers Leather Sandals Non Leather Sandals Percentage Tamil Nadu 26 5 54 1 0 Delhi & up North 10 77 4 1 60 Agra, Kanpur 45 0 32 62 0 Calcutta 12 0 2 3 0 Bangalore 3 3 4 0 0 Mumbai 4 2 1 32 0 Others 0 13 3 1 40 Total 100 100 100 100 100 Shoes manufactured in India wear brand names like Florsheim, Gabor, Clarks, Salamander and St. Micheal’s. As part of its effort to play a lead role in the global trade, the Indian leather industry is focusing on key deliverables of innovative design, consistently superior quality and unfailing delivery schedules. India in itself has a huge domestic market, which is largely untapped. The Indian footwear industry is provided with institutional infrastructure support through premier institutions like Central Leather Research Institute, Chennai, Footwear Design & Development Institute, Noida, National Institute of Fashion Technology, New Delhi, etc in the areas of technological development, design and product development and human resource development. Bata India Pvt. Ltd 7 The availability of abundant raw material base, large domestic market and the opportunity to cater to world markets makes India an attractive destination for technology and investments. Source: Secretariat For Industrial Assistance Department of Industrial Policy & Promotion Ministry of Commerce and Industry Govt. of India Udyog Bhawan, New Delhi - 110 011 SIA Website : http://indmin.nic.in (http://www.indianshoebazaar.com/ind_india.asp) 1.1 Production capacity of Shoe Industry The leather industry is spread in different segments, namely, tanning & finishing, footwear & footwear components, leather garments, leather goods including saddlery & harness, etc. The estimated production capacity in different segments is as under Hides:64 million pieces Skins:166 million pieces Footwear & Footwear Components Shoes:100 million pairs Leather shoe uppers:78 million pairs Non-leather shoes/chappals etc:125 million pairs Leather Garments:6 million pieces Leather Products:70 million pieces Industrial Gloves:40 million pairs Saddlery:6000 pieces The major production centers for leather and leather products are located at Chennai, Ambur, Ranipet, Vaniyambadi, Trichi, Dindigul in Tamil Nadu, Calcutta in West Bengal, Bata India Pvt. Ltd 8 Kanpur in Uttar Pradesh, Jalandhar in Punjab, Bangalore in Karnataka, Delhi and Hyderabad in Andhra Pradesh. Current market scenario The Indian footwear market is estimated to be over 10,000 Crores in value terms and is growing at the rate of 810% over the years. In this Men’s footwear account to be 50%, whereas, women’s share constitutes to be 40% and the remainder are covered by kid’s segment. In this total market demand, about 42% are brand-driven. And Bata is covering about 12% of the organized footwear segment. Raw material supplies There exists a large raw material base. This is on account of population of 194 million cattle, 70 million buffaloes, and 95 million goats. According to the latest census, India ranks first among the major livestock holding countries in the world. In respect of sheep with 48 million sheep’s, it claims the sixth position. These four species provide the basic raw material for the leather industry. The annual availability of 166 million pieces of hides and skins is the main strength of the industry. This is expected to go up to 218 million pieces by the end of year 2000. Some of the goat/calf/sheep skins available in India are regarded as specialty products commanding a good market. Abundance of traditional skills in training, finishing and manufacturing downstream products and relatively low wage rates are the two other factors of comparative advantage for India. (http://leather.indiabizclub.com/info/indian_leather_industry_overview) Bata India Pvt. Ltd 9 1.2 Export and Import overview India's export of Leather & Leather Products has reached US $ 3.47 billion in dollar terms and Rs.14, 000 crore in rupee terms. In dollar terms, there has been an export growth of 13.67% and in rupee termsl.13%Footwear alone holds a major share of 42.44% in India's total leather products export trade. As against the export target of US $ 3042 million for the financial year 2007-08, the achievement was 114.32% Footwear is the engine of growth for the entire Indian leather industry and India is the second largest global producer of footwear after China, accounting for 14% of global footwear production of 14.52 billion Pairs. India produces 2065 million pairs of Different Categories of Footwear (Leather Footwear 909 million pairs, Leather Shoe uppers 100 million pairs and Non-leather footwear 1056 million pairs) India exports about 115 million pairs. Thus, nearly 95% of its production goes to meet its own domestic demand. Footwear exported from India are Dress Shoes, Casuals, Moccasins, Sport Shoes, Horrachies, Sandals, Ballerinas, Boots, Sandals and Chappals made of rubber, plastic, P.V.C. and other materials. Bata India Pvt. Ltd 10 MNC Brands sourced : Acme, Clarks, ColeHann, Deichmann, Ecco, Elefanten, from India Florsheim, Gabor, Hasley, Hush Puppies, Double H, Justin, Marks & Spencer, Nautica, Nike, Nunn. MNC Brands Sold in India: Bally, Clarks, Hush Puppies, Lee cooper, Lloyd, Marks&Spencer, Nike, NineWest, NewBalance, Reebok, StacyAdams Indian Brands sold in India: Red Tape, Bata, Liberty, Khadims, Lakhani, and Action Note: Nearly 75% of India’s Export of Footwear is to the European Countries and the USA. The Indian Footwear Industry provides employment opportunities to a total of 1.1 million people, mostly from the weaker sections of the society. Out of this, about 0.2 million are employed in the organized sector, 40% of who are women. Remaining 0.9 million people are engaged in unorganized footwear sector like rural artisans, cottage and household units etc. The Footwear Sector is now de-licensed and de-reserved, paving the way for expansion of capacities on modern lines with state-of-the-art machinery. To further assist this process, the Government has permitted 100% Foreign Direct Investment through the automatic route for the Footwear Sector. Bata India Pvt. Ltd 11 Footwear export has increased from US$40.15 million in 1977-78 to US$ 1475.83 million in 2007-08 Chart showing Global Import of footwear Vs. Indian Export of Footwear Bata India Pvt. Ltd 12 India’s Exports of Footwear – Country-wise Share in Total Exports (2007-08) Source: DGCI& S The European Union and the USA are the major markets for Indian Footwear accounting for 79.95% and 9.22% share respectively in India’s total footwear export. The major markets for Indian Footwear are Germany 16.66%, UK 16.31%, Italy 15.32%, USA 9.22%, France 7.81%, Spain 5.10%, Netherlands 4.91%, Portugal 2.50%, UAE 2.48% and Denmark 1.18%. These 10 countries together accounts for nearly 81.49% of India’s total leather products export (http://footwearsinfoline.tripod.com/export_import.htm) Note :- 20% of total Indian shoe production comes from Bata. i.e. about 8 crore pairs. Bata India Pvt. Ltd 13 1.3 Role Of Government In Shoe Industry Of India Jairam Ramesh Minister of state for Commerce has announced Rs.1.6-billion (Rs.160-crore) package to boost the local shoe industry, but the state government, chief minister opposed this. Ramesh made the announcement on Saturday when he was inaugurating an international fair on leather, footwear components and technology at the Kalakriti Grounds near the Taj Mahal. The package comprises of Rs.600-million Leather Park, Rs.200-million footwear design development centre, Rs.100-million design studio, a testing laboratory and a permanent exhibition ground to be developed on investment of Rs.500-600 million, on similar to Pragati Maidan exhibition in New Delhi. Local shoe manufacturers have been asked to look for land. But there’s a problem the land for the projects has to be released by the state’s ruling party (which is the Congress’s opposition party). Agra’s old shoe industry directly and indirectly supports 100,000 families, mostly from the dalit community. Mayawati of BSP opposed to Ramesh of Congress Party that heads the United Progressive Alliance (UPA). According to shoe industry sources, Mayawati won’t be in a hurry to release land for any of the projects announced. But the industry believes once the schemes starts, exports could reach Rs.30 billion (Rs.3000 crore) from the present level of around Rs.8 billion (Rs.800 crore). More than 200 national and international components and raw materials manufacturers have put up their stalls at the exhibition. (http://www.thaindian.com/newsportal/politics/big-boost-for-agras-shoe-industry-if-state-governmenthelps_100116975.html#ixzz0XAkn7VPx) Bata India Pvt. Ltd 14 Design-cum-Resource Centre for Footwear & Leather Industry Leather goods and shoes as well as items of fur are being manufactured in the Small Scale Industry/Tiny sector traditionally in Srinagar and Jammu. The Central Government would make an initial contribution of Rs. 1.00 crore as grant for setting up a Design/Resource Centre and National Leather Development Programme (NLDP) will provide assistance for machinery, training and salaries of professionals. Under the National Leather Development Programme, exclusive assistance will be provided to market finished leather products of the artisans of the State in the form of buyer seller meets and exhibitions. (jammu.gov.in/departments/.../Central-Policy%20and%20Procedures.pdf) 1.4 Raw Material For Shoes Synthetic leather Shoe leather PU leather Air blown PVC soles PU welted sole TPR soles for men PU sleeper sole PVC gents sole PU shoe sole Emulsion polymers (latexes) Pell ethane thermoplastic polyurethane elastomers Polyurethanes Voralast polyurethane system Microfiber leather (www.tradeindia.com/seller...38/shoes-materials-accessories. html) Bata India Pvt. Ltd 15 2. Organization Profile Business Type: Footwear Main Market: India Founder: Tomas Bata Chairman: P.M Sinha Turnover: 1012 Cr. Employees: 6800 approx. Company Address: 22/4, Nukuleshwar Bhattacharya Road, Kolkata-700026 Phone: 033-24631657/8 Fax: 91- 124 4100883 Site URL: www.Bata.in Face Value: 10 Share Price: Bata India listed on BSE and NSE Current Price- NSE Price Rs 253.90(As on 22/1/2010) BSE Price Rs254 (As on 22/1/2010) Bata India Pvt. Ltd 16 2.1 Share Holding Pattern: Promoter Holding-51.02% Non Promoter Holding-13% Public and Other-23.06% FII-11.50% 13% Promoters 11.50% Public and Other 51.02% FII Non Promoter Corparate 25.06% (Bata India Ltd.) Bata India Pvt. Ltd 17 2.2 Board of Director: As per company records, the board of directors of the company presently comprises the following. Name Designation Date Of Appointment Mr. P M Sinha Chairman April 16, 2004 Mr. Marcelo Bravo Managing Director Feb 11, 2005 Mr. Pradip Kumar Deputy Managing August 25, 2001 Director Mr. Jaswant Singh Director Marketing August 1, 2002 Mr. A. K. Thakur Nominee Director UTI December 11,, 1996 Mr. V. Narayanan Director January 2, 1995 Mr. Constantin Director March 10, 2004 Mr. Shaibal Sinha Director Finance Feb 2, 2005 Mr. Amit Mitra Director Feb 2, 2005 Mr. N. Sankar Director Feb 2, 2005 Brief Details of Board of Directors Mr. P. M. Sinha Mr. Sinha is the former CEO of Pepsi Cola International South Asia and was the Chairman of Pepsico India Holdings and President of Pepsi Foods Limited. He was also on the Management Committee &Director of Hindustan Lever Limited for eleven years, before he joined Pepsico in 1992. He is currently on the Boards of ICICI Bank, Wipro Limited, Indian Oil Corporation Limited, Lafarge India Pvt. Limited. Mr. Marcelo Villagran Bravo Mr. Marcelo Villagran Bravo has more than 34 years of experience with the Bata group. Before joining the Company as a Managing Director, he was working with one of the most successful companies in the Bata group, i.e. Bata . Chile. He has wide operating and sales experience. He is a commercial engineer and a Bachelor of Business Administration. Bata India Pvt. Ltd 18 Mr. Pradip Kumar Nag Mr. Nag graduated in Commerce with Honours from Goenka College of Commerce and Business Administration under Calcutta University and is a member of All India Management Association. Mr. Nag has a rich experience in multifarious areas of Accounting, Financial Management, Taxation, Costing Principles and Methods and Administrative functions encompassing over three decades. He held the position of Senior Vice President, Finance in the Company for over 5 years. Mr. Nag undertook training in Toronto, Chicago, Ottawa and Philadelphia in various areas of Retailing, Financial Accounting and Management Reporting in connection with .SAP. Project for North American BSO Companies. He was appointed by Bata Limited, Toronto, Canada (The International Headquarters of Bata Shoe Organization) as Director .Enterprise Controlling. for Integrated Business Systems and was closely associated with successful implementation of .SAP. Integrated Business Systems in Retail Canada and User Support Programme. Mr. Jaswant Singh Mr. Singh joined the Company in 1971 as a Management Trainee. Marketing and had also undertaken training for 18 months in the Retail and Wholesale Departments. Mr. Singh started his career with the Company way back in 1971, and in the year 2000, he was made Managing Director, Bata Shoe Co. Uganda Limited, which position he held till his transfer to Bata India Limited in the year 2004. Mr. Singh has wide experience in Retail, Wholesale, Brand Management, Production, Merchandising and General Management. During his career he has attended various courses being MARKETCO, Monssey, France, 1983, ADVANCO, Chicago, Toronto, 1990, EMP (Executive Management Programme) NYC, Toronto, 1998, Company Managers Programme Toronto, 2000 and has represented the Company at several Shoecons, namely Milan, Padova, Prague and Chicago. Mr. Singh was awarded an Achievement Award by Mr. Thomas G. Bata at Milan in 1990 for North Star. Mr. A. K. Thakur Mr. A. K. Thakur is a B.Com from Calcutta University and a Chartered Accountant. He is the former Executive Director of Unit Trust of India. He has worked in almost all the key areas of Bata India Pvt. Ltd 19 Unit Trust of India and actively participated in formulating various corporate policies, procedures and strategic decisions. Mr. V. Narayanan Mr. Narayanan is the former Chairman and Managing Director of Ponds (India) Limited. He is a product of the Lawrence School at Lovedale and the Loyola College, Chennai. Mr. Narayanan began his career in 1959 as a Management Trainee in Hindustan Lever Limited (HLL). In his ten years with HLL, he specialised in Sales and Marketing, both in India and in the UK. He joined Chese brough Ponds Inc in 1968 as its Marketing Director and became Chairman and CEO of Ponds (India) Ltd. in1978. After his retirement from Ponds (India) Limited, Mr. Narayanan is on the Board of several leading companies. Mr. Constantin Salameh Mr. Salameh has worked for 19 years with Hewlett Packard, which he joined in 1984. He has worked in a number of senior management positions in this company in sales, marketing and financial services in Europe and Asia Pacific. The last two positions held in Hewlett Packard were Vice-President and Managing Director of Financial Services in Asia Pacific (1996-1999) and in Europe, Middle East and Africa (2000-2003) with full P & L responsibilities for a US$ 2.5 billion financing business. Mr. Salameh completed his University degrees from King`s College, England (B.Sc Engg. with 1stclass honours in 1979), M. Sc. Engg. from M.I.T. in 1980 and his MBA from Stanford University(USA) in 1984. His board affiliations are with the American University of Beirut and the University of Geneva. Mr. Salameh frequently addresses external audiences. Including the Management Centre Europe, Euromoney, International Technology Management, Asia International and World Bank Conferences on operational aspects of captive finance entities, business planning and financial management practices from a global perspective. Bata India Pvt. Ltd 20 Mr. Shaibal Sinha Mr. Shaibal Sinha qualified as a Chartered Accountant in 1986. He has worked with Eicher Limited, Toyota (in Muscat) and with Shaw Wallace and Company Ltd. His last assignment was with Reckitt Benckiser in U.K. and in India, where he has worked for the last eight years. Dr. Amit Mitra Dr Amit Mitra did his Masters in Economics from Delhi School of Economics in 1970 and further attained the Doctorate Degree in Economics from Duke University, USA in 1978. Later he taught in major Universities in the United States over a decade and received the prestigious Sears-Roebuck Foundation Award for Distinguished Teaching, 1990. Furthermore, he has wide Post Doctoral Research experience as senior consultant. In addition to the Company, he is also on the Board of Directors of Steel Authority of India Limited (SAIL), GAIL (India) Limited and Principal PNB Asset Management . He is also a Member on the Advisory Board of The India Fund of The Unit Trust of India (UTI), Member of the Central Advisory Committee, Central Electricity Regulatory Commission, Member of the Life Insurance Council, Member of the "India-China Eminent Persons Group" from the Indian side, Member of the Central Listing Authority constituted by SEBI, Member of the Advisory Committee to Union Commerce Minister of India on International Trade (WTO), and Member of the "Indo - EU Roundtable" from the Indian side (initiated by Government of India and the European Union (EU)). He is and also has also been a part of several committees and sub-committees constituted by various ministries in the Government of India. Mr. N. Sankar Mr. N Sankar (59) holds a Masters Degree in Chemical Engineering from the Illinois Institute of Technology, Chicago, USA. He is the Chairman of The Sanmar Group and its associates, which operates in diverse areas such as Chloro-chemicals, Speciality Chemicals, Shipping, Engineering, Insurance, and Cement. The turnover of the Sanmar Group (including its associates) is close to Rs.30,000 million. The Sanmar Group has long-standing and wellestablished joint ventures with leading international corporations like Emerson Electric, Tyco, Flowserve and Cabot of the USA, and AMP of Australia. The Sanmar Group currently has nine joint ventures. Mr. Sankar also serves on the Board of a few institutions outside the Bata India Pvt. Ltd 21 Sanmar group, such as F.L. Smidth Limited. Over the years, Mr. Sankar has held office in several public bodies representing trade and industry, such as the President of Assocham and the Chairman of the Indo-US Joint Business Council. He has also received awards recognizing his services to business and industry, including the ‘Lala Shriram National Award for Leadership in Chemical Industry. from the Indian Institute of Chemical Engineers. Bata India Pvt. Ltd 22 2.3 Management Organization Structure Managing Director M Velligran Special Projects Dy. Managing Director H Vengali P K Nag Commercial Internal Audit Harpreet Singh Finance Human Resources Special Projects Shaibal Sinha Sujit Sen P P Dasgupta Corporate/Admin./ Legal/Tax M J Z Mowla Personnel & H.R. S Ganguly Batanagar P Gupta Production Merch.Coord Special Projects S Chakravarty S D Singh Production AHM Ehsanuzzaman Marketing & Commercial Family & Bazaar Stores Flagship & City Stores J Singh R Hotte E Tonolli Wholesale V Anand Exports S Dixit Bataganj Finance Mokamehghat Hemant Sultania S R Raha Company Secretary Faridabad S D Singh Retail Family (East) & Bazaar Sandak Retail Family (West) A B Anand Insurance B S Das Retail Flagship(West) Retail Family (North) Retail Flagship(West) S K Dwivedi G P Sahu Retail Family (South) Retail Flagship (East) A Nandy R Sengupta C Roy Product Development F Ferraris Merchandising Opender Singh GGGFFFFF Information SystemsBS Southcan K Raman S Maitra g C C Ponnappa S K Dwivedi Finance, H.O. Kisor Sen T R Salaria Retail Flagship & City S Nagarajan Vinesh Singh Retail Analysis S Chakraborty Advertising & Comm. Costing & Efficiency Tumpa Roy S Ranjan Bata India Pvt. Ltd 23 2.4 HISTORY All about Bata Bata India is the largest retailer and leading manufacturer of footwear in India and is a part of the Bata Shoe Organization. Incorporated as Bata Shoe Company Private Limited in 1931, the company was set up initially as a small operation in Konnagar (near Calcutta) in 1932. In January 1934, the foundation stone for the first building of Bata's operation - now called the Bata. In the years that followed, the overall site was doubled in area. This township is popularly known as Batanagar. It was also the first manufacturing facility in the Indian shoe industry to receive the ISO: 9001 certification. The Company went public in 1973 when it changed its name to Bata India Limited. Today, Bata India has established itself as India's largest footwear retailer. Its retail network of 1250 stores gives it a reach/ coverage that no other footwear company can match. The stores are present in good locations and can be found in all the metros, mini-metros and towns Bata's smart looking new stores supported by a range of better quality products are aimed at offering a superior shopping experience to its customers. And the new face of Bata India is now visible to the industry as well as its customers. Today, backed by a brand perception of experience, the company is working towards positioning itself as a vibrant and contemporary young brand. (http://www.sharekhan.com/marketcorner/detailedreport.aspx?type=COMP-His&SSKIcode=Bata) Bata India Pvt. Ltd 24 Key Milestones Date/Year Event 1894 The Bata Shoe Organisation 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 canvasshoes were manufactured in India. October 28, The foundation stone was laid on land purchased from the Port 1934 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. Bata India Pvt. Ltd During the World War II the factory’s production was geared to meet 25 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. (http://www.sebi.gov.in/dp/bata.pdf) 2.5 Our Values Constant innovation in design and product development Superior customer service Excellence in operational and commercial execution Entrepreneurial spirit and passion to win Bata India Pvt. Ltd 26 Teamwork in international environment Trust and respect for our employees Adding value to the community Delivering on our commitment to shareholders (http://www.bataindia.com/page.php?kon=5_2_1) 2.6 Our commitments Your Purchase Guarantee In case of any problem, bring back the pair shoes with in the next 15 days from the date of purchase and we will replace it with another pair. Condition apply. Wide collection With more than 1000 different designs to choose from, we have one of the widest selection shoes, handbags and accessories. Assured Quality Strict quality measure are followed during and often the production of all our products. We have our own factories and warehouse that are supervised by trained and experience personas. Personalized Attention In all our stores, our trained professional sales staff is at your service. In case you have any query about Bata products or services, please feel free to ask for any assistance. Bata India Pvt. Ltd 27 Product Detail We ensure that you get complete detail of all our products in the most convenient way. Each item carries tags that clearly mention type, price, size or other necessary information. It not only saves your time but also helps you in your selection. (http://www.bataindia.com/page.php?kon=4_0) 2.7 Bata India - Today Sells over 45 million pairs of footwear every year Serves over 120,000 customers every day Sells through over 1200 retail stores Operates 5 manufacturing facilities Employs more than 6800 people (http://www.bataindia.com/page.php?kon=5_2_1) Bata India Pvt. Ltd 28 2.8 Brands Of Company Bata global Subsidiary Bata India Pvt. Ltd Companies Of Bata India 29 Hush Puppies In 1958, during the exciting atmosphere of change the Wolwerine Company created the world's first casual shoe and provided a new alternative in footwear. Hush Puppies emerged as a soft, breathable and very comfortable shoe. A truly modern creation that was immediately embraced for its authentic style and casual flair. This unique invention would not only change the kind of shoes we wear, it would also herald the beginning of today's relaxed style. Year by year, country by country, decade by decade the world was getting casual with Hush Puppies. Hush Puppies is still growing championing the same easy going style Hush Puppy is known for Relaxed and classic in design Hush Puppies is always defined what it means to be modern and casual. Today Hush Puppies continues to innovate bringing technical excellence in genuine style to over 120 countries by application of various types of technologies like: Hush Puppies Bounce technology for shock absorption and energy return in every step. Wave Reflex outsoles provide complete freedom of movement for your feet. Natural latex rubber and unique reverse action design waves unite to provide ultra flexibility. 100% relax, Hush Puppies collection of innovative, auth entic casual footwear, mixed textures of soft casual leathers and rich Hush Puppies worryfree suede. The desire for a fashionable and casual life, a young idea in 1958 is now the aspiration of generations of people worldwide. Bata India Pvt. Ltd 30 Scholl The name Scholl today is synonymous with feet and foot care in over 70 countries throughout the world. This heartfelt fascination with feet, this dedication and drive, formed the foundation of the company and the Dr Scholl spirit and legacy are as much a part of the brand today - 100 years on. Dr Scholl's from Bata provides you with maximum comfort whole daylong. The unique Anatomic Insole will give your feet that extra cushioning needed to keep all stresses at bay from your feet while providing support from all sides. The ribbed surface of the insole gently massages your feet while walking. This boosts the circulation and keeps you active all the day. The soft sole absorbs all the shocks while walking. Bata India Pvt. Ltd 31 North Star North Star is synonymous with street cred. Stylish, trendy comfortable and durable, the range is ideally suited to the urban environment. The youth market is attracted to the brands retro styles, including designs from the late 80s as well as contemporary interpretations, making it a highly sought after brand name. It's a casual yet fashionable street-style shoes that caters to the young at heart. North Star Shoes have graphics and prints and are shoes of style and edge. They are in all types of materials, with the looks of casual cool. Power Power is a Bata International Brand, which continues to spark an emotional connection with the masses by providing athletic footwear at very affordable prices. First launched in 1972, it has created a niche for itself in the sports segment. POWER is inspired by the same passion to perform that is inherent in the athletes who use our products. POWER as a brand stands for Durability, Trends, Responsiveness, Performance and value. Power offers a Sporty range of basic as well as performance -oriented shoes at unbeatable prices. It's the Right Match for your active life style – be it Jogging, Running, Adventure, Cricket, Badminton, Tennis and lifestyle. Power products are equipped with unique features and benefits that differentiate Power footwear from competitors, provide professional services to our customers and ensure the Right products are delivered in the Right time in the Right price. Bata India Pvt. Ltd 32 Power Slogan: “A new terminology replacing “Value”, The Power customer is a Smart consumer, not just a value consumer.” Marie Claire Marie Claire, a fashion lifestyle brand of shoes with a touch of elegance that caters to the young cosmopolitan women. Bata Brands is the trademark owner of Marie Claire for shoes worldwide (except in Japan and Korea). Marie Claire stands for Contemporary and modern styling, adaptive to an active lifestyle yet elegant and feminine. Subtle fashion trend details and quality products with a clean finish, it is a brand that brings out every woman's confidence & individual style. Marie Claire Emphasizes on its style, quality and value. Bubblegummers Bubblegummers is the leading children's footwear brand in India and has an extensive presence in Latin America, Asia and Europe. Bubblegummers offers good quality, comfortable, funny and colorful shoes for kids. Developed to the strictest standards of quality, all shoes are produced with state-of-art technology to ensure healthy foot growth, and parents can be assured that their children will enjoy these shoes in total comfort and safety. It is our constant Endeavour to give you the best in styles, colors and comfort, and our priority to deliver superior standards of product and service to all our customers. We believe that our greatest strength and asset is the trust of our customers, which enables us to sell close to 1.5 million pairs of Bubblegummers per year. Bata India Pvt. Ltd 33 3.Internal Environment & External Environment The Internal factors include strengths and a weakness focuses of the firm. Strengths refer to core competencies that give the firm an advantage in meeting the needs of its target markets. Company strengths should be market oriented/customer focused because it assists the firm to understand customer needs. Weaknesses refer to any limitations a company faces in developing or implementing a strategy. Weaknesses should also be examined from a customer perspective so that they can understand their weaknesses from customer point of view. The External Analysis contains or examines opportunities and threats that exist in the company. Opportunities and threats are independent factors of the firm. If we understand our Opportunities properly it refer to add favorable conditions in the firm that could produce rewards for the organization .Threats refer to conditions or barriers that may prevent the firms from reaching its objectives. The following area analyses are used to look at all external factors affecting a company 3.1 HUMAN RESOURCE POLICY: when they set-up their factory in India, their approach was to hire local labor and trained them making shoes. As the technology advanced they trained their employees on machine. But, for special tasks they hired person who were in occupation of shoe making. As the demand increased they developed their vendors in places like Agra, Noida, Gurgaon etc gave them their requirements to manufacturer per their quality standard. The policy in this regard was to frame their vendor. The company has number of welfare schemes for their employs to encourage stability. Regular training programs are held for the employs and the lower level minimum wages are given but incentives are linked and outcome. Same way the company has their outlet for sale where the employs are on the pay role of Bata. The functions of any management are planning, organizing, staffing, directing and controlling. The management of Bata performs these functions efficiently. All divisions of Bata are taken care of by different set of managers. Bata India Pvt. Ltd 34 The management at Bata knows the importance of customers to its business. It has a good image in the minds of the customers. It caters to a large class of customer for middle class and lower middle class customers. The management of the brand performs many functions e.g. it takes up the work of brand repositioning very often. It also works for social causes such as it employs physically challenged people and it is also working towards women empowerment by employing more and more women. The management also takes care of the environment. The organization always gives due importance to its employs. It provides many facilities to its employees such as the crèche facility, medical facilities, transportation etc. the industry also celebrates birthdays and long service etc. All these motivates the employees to achieve the goals and objectives of the organization. Common Components Of Human Recourse Managements: Hiring component and qualified employees Assigning and classifying employees effectively Motivating employees to perform optimally Stimulating employees professional growth and development Evaluating and compensating employees fairly Rewarding employees for their efforts Providing in service education opportunities Bata India Pvt. Ltd 35 3.1.1 Staffing Process Recruitment Recruitment Selecting fromamong among the Applicants Selecting from Applicants Placement and Orientation Placement and Orientation Training and Development Training and Development Performance Appraisal Performance Appraisal Promotion and Career Planning Promotion and Career Planning Compensation Compensation 3.1.1(a) Recruitment Process Ensures that provided candidates, are most suitable for your specific requirements. Our trained consultant’s pre-screen and pre-select applicants before submitting their details for we want to assure accurate matching between our company and any prospective employee. Bata India Pvt. Ltd 36 Collection of Curriculum Vitae from applicants interested in one or more of our offers. Every Curriculum Vita is written in the Bata format, which allows for easy comparison of each candidate's details. Performing the first telephone interview in order to make preliminary assessments of the overall competency of a candidate, especially in regards to their level of English. All documents are then collected and reference checks are performed including employment history, criminal background and health checks. If the panel is fully satisfied with the results and feel confident that the candidate is suitable for your specific requirements, then the second interview is done and later sends the application to the potential employer who then obviously makes the final decision. The final interview is then conducted at Krakow, head office. Also, arranging travel for any prospective employee to ensure the final step runs smoothly. 3.1.1(b) Selection Process The selection process is objective and robust. Bata selects talent for the Technical function from FDDI. Engineers from disciplines such as Mechanical, Electronics, Production Engineering and Chemical are considered for placement. The process starts in August each year with a campus visit and a pre-placement presentation. This provides an opportunity for young aspirants to learn more about the Company, its achievements, its strategies and the kind of careers they can look forward to. A range of selection tools are used. These include assessment centres, group tasks and in-depth personal interviews. Candidates found suitable for employment are immediately given offers to join Bata in July of the following year. After a comprehensive induction programme, they are assigned to various businesses of the Company. Bata also selects first-year students for Summer Internships Bata India Pvt. Ltd 37 A team of Bata managers visits campuses once again between December and March for final placement. The process consists of group discussions and personal interviews preceded by psychometric tests and assessment centres. Employment offers are made to selected candidates immediately. On joining Bata in July, candidates undergo an induction programme before being assigned to one of the Company's businesses. Employment offers are made to selected candidates immediately. On joining Bata in July, candidates participate in an induction programme. Thereafter they are assigned to responsibilities in Trading, Sourcing and Logistics in the Agri Business Division. Bata believes in taking out the best out of the pool of application received during recruitment process. It believes in infusion of new blood in their organisation. 3.1.1(c) Training and Development Training has become most crucial aspect in Bata because of chanding standards of technology and its services. Training courses are sometimes offered for 6 months with internship so it invites fresher’s which are motive of Bata. Training is given by practical demos with latest and modern machines and equipments and is conducted professionally. 3.1.1(d) Retirement Benefits The liability for Gratuity and Pension is computed and provided as per the actuarial valuation report. The liability so provided is represented substantially by creation of separate funds and is considered sufficient to meet the liability as and when it accrues for payment in future. Expenditure in respect of early voluntary retirements is written off as a period cost. Retirement benefits in the form of Provident Fund are charged to the Profit and Loss Account for the year/ period when the contribution to the respective funds are due. Leave encashment benefit is accounted for on basis of actuarial valuation. Expenditure in respect of early voluntary retirements is written off over 5 years as a period cost. Bata India Pvt. Ltd 38 3.2 Employee Categorization: Employees of the Company are categorized along the following grades, in descending hierarchical order • Directors • Senior Managers (Senior Vice President, Vice President, General Manager) • Middle Managers • Junior Managers • Selling personnel • Shop Managers • Shop Employees Additionally, the Company employs direct and indirect workmen at its factory sites. The number of permanent employees currently on the payroll of the Company is 9,969 as on January 31, 2005. 3.3 Corporate Social Responsibility: The following CSR activities were undertaken by the Company during the year: - Sponsorship of Rain Water Harvesting Project in Gurgaon. - Donation to Bihar Flood Relief Fund. - Free shoes to Orphans on Republic Day. - Free medical camp for under privileged caretakers of Kolkata Maidan and physically handicapped. - lnauguration of Bata Cricket School in October 2008. - The Company operates two Higher Secondary Schools, one for boys and one for girls and three Primary level Schools " and also one Nursery School. The children of our employees and neighbouring localities get educational facilities from these institutions. Bata India Pvt. Ltd 39 - The Company encourages entrepreneurial spirit in the small scale businesses located in the vicinity of its factories so that they become independent associates and partners in progress with the Company. This generates large employment in the area and gives people the opportunity to grow in their businesses. - The Company maintains a temple, -a church and a mosque where employees and people from the different communities in the neighbourhood participate in prayers. - The Company actively participates in organizing Blood Donation Camps and distribution of fruits and sweets to the ailing patients at the Batanagar Hospital and Ramakrishna Mission Residential School at Batanagar. (http://content.icicidirect.com/Research/DirectorsReport.asp?icicicode=BATIND) 3.4 Manpower: Bata have more than 65oo employs. Bata has a supportive manpower policy. Bata received the “Great place to work award” on 9 June 2009. Bata does not indulge in human right abuses. There is no form of forced or compulsory labor Bata. The industry has a labor union and also has a mutual agreement with the union. Bata do not indulge in child labor and also does not let its suppliers to do so. The company does not discriminate anyone on the basis of sex, disability etc for employment as per Bata code of conduct.4% of Bata workforces are people with disability and measures are taken to take care of their special needs. Measures are also taken to avoid any kind of bribery and extortion. Bata India Pvt. Ltd 40 3.5 Marketing Environment Marketing is the process by which companies advertise products or services to potential customers. It is an integrated process through which companies creates value for customer and build story value from customer into return. Importance of understanding the environment The managers job cannot be accomplished in a vacuum within the organization. There are a number of factors both internal as well as external which jointly affect managerial decisionmaking. It is therefore very important for the manager to understand and evaluate the impact of the business environment due to the following reasons : a) Businesses may be doomed to be non starters due to restrictive business environment which may take the form of rigid government laws (no polluting industry can ever be located in around 50 Km radius of the Taj) , state of competition (Car manufacturing capacity presently in the country is far in excess of demand) etc. b) The present and future viability of an enterprise is impacted by the environment For eg no TV manufacturer can be expected to survive by making only B&W television sets when consumer preference has clearly shifted to colour television sets. c) The cost of capital and the cost of borrowing - two key financial drivers of any enterprise are impacted by the external environment . For eg the ability of a business to fund its expansion plan by raising money from the stock markets depends on the prevalent public mood towards investment in stock markets. d) The availability of all key inputs like skilled labour , trained managers , raw materials , electricity , transportation , fuel etc are a factor of the business environment. e) Increasing public awareness of the negative aspects of certain industries like hand woven carpets ( use of child labour ) , pesticides (damage to environment in the form of chemical Bata India Pvt. Ltd 41 residues in groundwater), plastic bags (choking of sewer lines) have resulted in the slow decline of some industries. f) Finally , the environment offers the opportunities for growth and profits . For eg when the insurance and aviation industry was thrown open to the private sector , the new entrant could easily build on the expectations of the public. Technological Environment Demographic Environment Intermediarie s Logistics R&D Supplier Product Purchasing Place Consumer Marketing Satage-5 Price Production Public Stage-4 Production Promotion Engineering Stage-3 Stage-2 Competitors Social cultural Environment Political Legal Environment Stage-1 Figure: Marketing Environment Chart 3.5.1 Stage-1 (Macro-Environment) 3.5.1(a) Demographic Environment Demographics tell marketers who current and potential customers are; where they are; and how many are likely to buy what the marketer is selling. Demography is the study of human populations in terms of size, density, location, age, sex, race, occupation, and other statistics. Changes in the demographic environment can result in significant opportunities and threats presenting themselves to the organization. Major trends for marketers in the Bata India Pvt. Ltd 42 demographic environment include worldwide explosive population growth; a changing age, ethnic and educational mix; new types of households; and geographical shifts in population. i. Worldwide population growth: ii. Population age mix: iii. Ethnic market iv. Educational groups v. Household patterns vi. Geographical shifts in population Demographic Of India Population: 1,166,079,217 (2009 est) Growth rate: 1.548% (2009 est) Birth rate: 22.22 births/1,000 population (2009 est) Death rate: 6.4 deaths/1,000 population (2009 est) Life expectancy: 69.89 years (2009 est) –male: 67.46 years (2009 est) –female: 72.61 years (2009 est) Fertility rate: 2.72 children born/woman (NFHS-3, 2008) Infant mortality rate: {{{infant_mortality}}} Age structure: 0-14 years: 31.1% (male 190,075,426/female 172,799,553) (2009 est) 15-64 years: 63.6% (male 381,446,079/female 359,802,209) (2009 est) 65-over: 5.3% (male 29,364,920/female 32,591,030) Bata India Pvt. Ltd 43 (2009 est) Sex ratio: At birth: 1.12 male(s)/female (2009) Under 15: 1.10 male(s)/female (2009) 15-64 years: 1.06 male(s)/female (2009) 65-over: 0.90 male(s)/female (2009) Language: Official: Hindi, English India has the second largest population in the world after China. But its population growth is far more than China and it is expected that India will have the largest population by 2020. India’s population, right now, is around 120 million. India has around 60% people below the age of 60 and 40% are above 60 and they are called the senior citizens in the society. India has around 68% literate people in the country. The literacy rate is not very good as compared to other countries but is has shown growth in the past years. The urban areas have more educated people as compared to the people in the rural areas. The household pattern have seen a lot of change as people now prefer to stay in nuclear families and both husband and wife wants to work and earn for the family. People are shifting from rural areas to urban areas for the sake of employment and better opportunities. So, metro cities have highest number of migrants from other cities. Every city is famous for a profession, for example. Bangalore is famous for IT professionals etc. Demographic Of Company For Bata, It have their stores all over India. But, basically they have more tores in the metro cities of the country because of the more educated people and high income service group of people living there and now Bata also planning to open their stores in tier-II and Tier-III cities. Bata India Pvt. Ltd 44 Educational Group: Educated Upto Higher Secondary Population: Upper Middle Class Middle class Lowe Middle class Age: 10-14 yr 15-18yr 19-26yr 27-35yr 36-50yr upto-50yr Income Distribution: Upto 20,000 Geographical shifts: Northern, Central, western India 3.5.1(b) Pest Analysis Pest analysis cover Economic Environment, Natural Environment, Sociocultural Factor and Technological Factor. This is imperative that an organization considers its environment before beginning the marketing process. In fact, environmental analysis should be continuous and feed all aspects of planning. The organization's marketing environment is made up of: The macro-environment e.g. Political (and legal) forces, Economic forces, Sociocultural forces, and Technological forces. These are known as PEST factors. Political Factors The political arena has a huge influence upon the regulation of businesses, and the spending power of consumers and other businesses. You must consider issues such as: Bata India Pvt. Ltd 45 1. How stable is the political environment? 2. Will government policy influence laws that regulate or tax your business? 3. What is the government's position on marketing ethics? 4. What is the government's policy on the economy? 5. Does the government have a view on culture and religion? Economic Factors The economic environment consists of factors that affect consumer purchasing power and spending patterns. Economic factors include business cycles, inflation, unemployment, interest rates, and income. Changes in major economic variables have a significant impact on the marketplace. For example, income affects consumer spending which affects sales for organizations. According to Engel's Laws, as income rises, the percentage of income spent on food decreases, while the percentage spent on housing remains constant. Marketers need to consider the state of a trading economy in the short and long-terms. This is especially true when planning for international marketing. You need to look at: 1. Interest rates. 2. The level of inflation Employment level per capita. 3. Long-term prospects for the economy Gross Domestic Product (GDP) per capita, and so on. Bata India Pvt. Ltd 46 As we all are aware of the last FY in the globe, so there were many companies who suffer from the market condition. Bata desperate and long overdue search to make a style statement in the Indian shoe market for (formals shoe wear). Exchange 52 Week High 52 Week Low BSE 376 76 NSE 277.89 75 The last report by the company is showing the dynamic condition of the market and it shows the way it climbs up and get down. Bata at BSE on Dec 7, 2009 Current: 191.40Rs; Volume: 30,363; Change (%):+1.74. (For forther details refer chap[ter-7 and 8) Sociocultural Factors The social and cultural influences on business vary from country to country. It is very important that such factors are considered. Factors include: 1. What is the dominant religion? 2. What are attitudes to foreign products and services? 3. Does language impact upon the diffusion of products onto markets? 4. How much time do consumers have for leisure? 5. What are the roles of men and women within society? 6. How long are the population living? Are the older generations wealthy? 7. Do the population have a strong/weak opinion on green issues? Bata India Pvt. Ltd 47 Indian culture is one of the ancient and famous cultures of the world. People are still connected to the culture in one way or the other. The companies manufacture its products using the Indian culture. Bata India have a lot of products which are related to the culture so that it can increase their sales because people prefer products related to the social environment of the country. Such as they have good quality of leather sober shoes, which attract the office going people. Bata India has a clearly defined policy for Corporate Social Responsibility (CSR). As part of the company’s CSR initiative, the manufacturing units of shoes Divisions have acquired the certifications ‘ISO 9001: 2000 Quality Management System Standards’ and ‘ISO 14001:2000 Environment System standard’ emphasizing the efforts to be an ecologically responsible organization. The company’s diverse CSR initiatives include: Children’s education Enabling the disabled Women’s empowerment Environment management programmes Miscellaneous community initiatives Technological Factors Technology is vital for competitive advantage, and is a major driver of globalization. Consider the following points: 1. Does technology allow for products and services to be made more cheaply and to a better standard of quality? 2. How is distribution changed by new technologies e.g. books via the Internet, flight tickets, auctions, etc? 3. Does technology offer companies a new way to communicate with consumers e.g. banners, Customer Relationship Management (CRM), etc? Bata India Pvt. Ltd 48 Technology has not only changed the working style in India but it has affected the world. It has enhanced the working style of the people. It has accelerated the pace of working of the people. Not only has the acceleration of the pace but it also made the room for innovations that companies can try. R&D is one of the important component that company needs, so that, it can know what the customer wants from the company. Most of the companies are now using technological upgraded machineries. Note:- Bata India has entered into an agreements with Bata Ltd of Toronto (Canada) for the supply of technical know- how and services such as footwear technology, design and brand development. Recent Technological Trends in the Industry: Role of Technology: Technology has expanded operations of the apparel and footwear industries to a more global scale. It has also provided closer working relationships between retailers and manufacturers. Technology has improved efficiency and has reduced the amount of manual labor. Computer Technology: Rapid improvements in computer technology have helped to shorten the new product development phase from years to practically months, especially in the fashion/style/high- performance areas. Apparel marketers who are linked with retailers through quick-response programs and other technology go a long way toward making themselves indispensable to their customers. EDI Technology: collects information (such as the bar code that is attached to each item sold, the price of the product(s) sold, and details such as color and size) from the retailers’ checkout counter and relays the information back to the manufacturer. The data is then used for manufacturers to automatically reorder the stock of merchandise to replenish their shelves in a timely manner. EDI also makes distribution and shipping information more efficient. Bata India Pvt. Ltd 49 3.5.2 Stage-2 (Micro-Environment) 3.5.2(a) Suppliers • Reebok: Under this arrangement, the Company will purchase shoes from Reebok as per its requirement and earn a gross margin of 36% of the retail price. • Adidas Marketing Private Limited: Adidas Marketing Private Limited has agreed to provide the Company with its products in footwear, apparel, accessories at a Gross margin of 40% for footwear and 42% for apparel and accessories. Margins offered to Bata are subject to change in event of changes in the tax structure and business scenario . • M&B Footwear Private Limited: M&B footwear Private Limited to provide the Company on an outright sale basis stocks of its brands .Lee Cooper. and .ID. at a margin of 40% of the retail price. M&B Footwear would advertise and promote Bata as its business partner. The term of this arrangement extend for three year starting April 30, 2003. • Sierra Industrial Enterprise Private Limited: Sierra Industrial Enterprise Private Limited has agreed to supply the Company their products .Lotto., which launched in almost 50 flagship stores of Bata by mid-February 2005 and is expected to reach 250 stores by mid-August 2005. Bata has agreed to purchase the products at an agreed Gross margin of 42% of the Retail price. • Planet Sports Private Limited: The Company has entered into a Consignment Agreement dated February 29, 2004 for a period of three year extending till February 29, 2007 with Planet Sports Private Limited for supply of footwear, apparel and accessories by the brand name .PUMA. at the maximum retail price or at a discounted price as provided by Planet Sports Private Limited and Bata will be entitled to a commission of 35% on the sales net of taxes. (http://www.sebi.gov.in/dp/bata.pdf) Bata India Pvt. Ltd 50 3.5.2(b) Intermediaries Distribution Channels Of Bata: Bata India markets its products through three distinct channels. • Company operated retail outlets: The Company operates its own retail network of over 1,100 retail stores spread across the country. These outlets are serviced through six distribution centers spread out geographically and each responsible for a particular region The process flow begins with the transportation of the finished products from the Company’s manufacturing units and contract manufacturers. plants to the distribution centers through the services of third party carrying and forwarding agents. The distribution centers in turn transport these products to the Company operated retail outlets based on specific demand requirements. These retail outlets are manned by the Company’s employees and exclusively market the Company’s footwear brands. As part of its strategy to provide complete footwear solutions to customers, the retail outlets also market accessories like shoes laces, socks, shoe polish. In certain outlets, the Company also provides cosmetic services like pedicures, etc. Out of the 1,100 retail stores, the Company has designated 84 stores as factory outlets which are used to sell merchandise at marked down prices. These factory outlets are used primarily by the Company to sell surplus or non-moving products and factory seconds stocks. Institutional sales as well as supplies to the civil and defense agencies are also taken care of through the Company’s distribution network. The Company has designated specific senior managers to oversee the marketing to this segment of buyers. The requirements are directly supplied from the Company’s distribution centers . • Dealer Network: The Company also uses the dealer network of the footwear industry to market its products. Through this channel, the Company supplies its products to non-exclusive wholesale distributors who in turn distribute the Company’s products to independent dealers across the country. The dealers covered under this channel are non-exclusive Bata dealers and hence sell footwear and related products of other companies also. Bata India Pvt. Ltd 51 • Market Extension Programs: The Company is undertaking steps to generate volume business in semi-urban markets and markets which are un-represented and under-represented footwear markets, pursuant to its Market Extension Programs, through authorized Bata dealerships. Under this programs, the Company appoints authorized dealers, subject to certain selection criteria who run outlets which exclusively market the Company’s products and adhere to rules and regulations of the Company. As on date, there are 470 such outlets in the country. The dealer outlets are not manned by Bata employees but are manned by the employees of the private dealer. (http://www.sebi.gov.in/dp/bata.pdf) 3.5.2(c) Competitors The footwear manufacturing industry globally and in India, is highly fragmented, with a large number of small and medium sized manufacturers having a local presence in China and India. Their principal competitors in their manufacturing operations are Country Competitor India India India India Bata India Pvt. Ltd 52 India India Positioning Mapping (As per our group perception) PRICE HIGH QUALITY LOW HIGH LOW Bata India Pvt. Ltd 53 In comparison to its competitors, Bata is a reasonably priced brand with reasonable product quality. With respect to its international competitors, it is the most affordable as can be seen in the above illustration. All the competitors have better quality with higher prices. woodland has the highest price and quality in comparison to all the competitors of Bata. Whereas, relative to its Indian competitors, it is the highest priced but also offers the highest product quality. In case of Indian competitors, Relaxo and Lakhani is placed just a little below Benetton for its price and quality, and Sparks is the lowest priced with lowest quality with respect to the Indian competitors of Bata. STORES OF MAJOR RETAIL SHOES BRANDS IN INDIA RETAILER Bata Liberty Metro Woodland M& B Footwear Regal Shoes Loft Khadim’s Sree Leather PRESENT IN NO CITIES All cities 225 31 Across India All major cities 7 2 East & South of India West Bengal, Orissa, Bihar 3.5.2(d) Publics Governmental Approvals And Licensing Arrangements In Last Decade The Company has the following approvals from the Government authorities as required to carry on the present business. However, certain approvals have expired in respect of which, the Company has applied or is yet to apply for renewals, as indicated corresponding to the relevant licenses. Licences/Permission/Approvals in respect of factory located at Sipcot, Batashatak, Hosur, Tamil Nadu. 1. Industrial Licence issued by the Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, Government of India vide letter dated July 27, 2000 bearing Bata India Pvt. Ltd 54 number CLR- 4412000 for the purpose of establishing a new industrial undertaking for the manufacture of leather footwear located at Plot No.73 & 74, SIPCOT, Industrial Complex Phase . I, District Hosur (Dharampuri) in the State of Tamil Nadu. The date of expiry of this industrial license is July 27, 2002, and the Company had to commence commercial production by that date. This license was issued subsequent to the Hosur factory.s conversion from an Export-oriented unit to a domestic producer, and the Company continued with commercial production in the aforesaid period. Thus, renewal application in respect of the same is not applicable. 2. Registration Certificate issued under the Central Excise Rules, 1944 by the Registering Authority dated November 29, 2001 for the purpose to cure, produce, manufacture, carry on wholesale trade/business/broker or commissioner agent or otherwise deal in excisable good, act as a user of excisable goods for special industrial purposes. This registration certificate is valid until factory carries on the activity for which it is issued or until surrendered. 3. Authorisation and consent issued by Tamil Nadu Pollution Control Board dated September 12, 2003 bearing number 8179A for the purpose of operating the industrial plant in an Air Pollution Control Area and to continue discharge of emission from the stacks under Section 21 of the Air (Prevention and Control of Pollution) Act, 1981. This authorization /consent is valid until March 31, 2005. 4. Renewal of consent order issued by District Environmental Engineer, Tamil Nadu Pollution Control Board bearing number 11325 A for the purpose of discharge of sewage under Section 25 of the Water (Prevention and Control of Pollution) Act, 1974. This consent is valid until March 31, 2005. 5. Factory Running Licence issued by Block Development Officer under the provisions of the Tamil Nadu Panchayat Rules bearing number 1543 for the purpose of running the industry for manufacture of leather footwear. This licence is valid until March 31, 2005. Bata India Pvt. Ltd 55 6. Factory Licence issued by Deputy Chief Inspector of Factories bearing number 29290 for the purpose of using premises at Sipcot Industrial Complex, Hosur as a factory. This licence is valid until December 31, 2005. (http://www.sebi.gov.in/dp/bata.pdf) 3.5.3 Stage-3 (The Company) Bata India is the largest retailer and leading manufacturer of footwear in India and is a part of the Bata Shoe Organization. Incorporated as Bata Shoe Company Private Limited in 1931, the company was set up initially as a small operation in Konnagar (near Calcutta) in 1932. In January 1934, the foundation stone for the first building of Bata's operation - now called the Bata. In the years that followed, the overall site was doubled in area. This township is popularly known as Batanagar. It was also the first manufacturing facility in the Indian shoe industry to receive the ISO: 9001 certification. Its retail network of 1250 stores gives it a reach/ coverage that no other footwear company can match. The stores are present in good locations and can be found in all the metros, mini-metros and towns. 3.5.3(a) Purchasing: In addition to products manufactured by it, the Company also sells footwear, accessories, garments etc. manufactured by international and domestic agencies/ entities. The Company has entered into an arrangement with international shoe-manufacturers such as Reebok, Adidas, M&B Footwear Private Limited, Tej International Private Limited, Sierra Industrial Enterprise Private Limited for marketing their products though the Company`s retail outlets. The Company has the entered into following key arrangements: • Reebok: Under this arrangement, the Company will purchase shoes from Reebok as per its requirement and earn a gross margin of 36% of the retail price. Bata India Pvt. Ltd 56 • Adidas Marketing Private Limited: Adidas Marketing Private Limited has agreed to provide the Company with its products in footwear, apparel, accessories at a Gross margin of 40% for footwear and 42% for apparel and accessories. Margins offered to Bata are subject to change in event of changes in the tax structure and business scenario . • M&B Footwear Private Limited: M&B footwear Private Limited to provide the Company on an outright sale basis stocks of its brands .Lee Cooper. and .ID. at a margin of 40% of the retail price. M&B Footwear would advertise and promote Bata as its business partner. The term of this arrangement extend for three year starting April 30, 2003. • Sierra Industrial Enterprise Private Limited: Sierra Industrial Enterprise Private Limited has agreed to supply the Company their products .Lotto., which launched in almost 50 flagship stores of Bata by mid-February 2005 and is expected to reach 250 stores by mid-August 2005. Bata has agreed to purchase the products at an agreed Gross margin of 42% of the Retail price. • Planet Sports Private Limited: The Company has entered into a Consignment Agreement dated February 29, 2004 for a period of three year extending till February 29, 2007 with Planet Sports Private Limited for supply of footwear, apparel and accessories by the brand name .PUMA. at the maximum retail price or at a discounted price as provided by Planet Sports Private Limited and Bata will be entitled to a commission of 35% on the sales net of taxes. (http://www.sebi.gov.in/dp/bata.pdf) Bata India Pvt. Ltd 57 3.5.3(b) Research and Design The company has entered into an agreement with Bata Ltd of Toronto (Canada) for the supply of technical know-how and services such as footwear technology and design, brand development, product development, retailing and information system for a period of ten years from January 1, 2001 (http://www.sharekhan.com/MarketCorner/DetailedReport.aspx?Type=COMP-HIS&SSKICode=BATA) 3.5.3(c) Engineering & Technology They use “dynamic spring prods” that act as cushion for your feet. They use “in- built-air circulation technology” that allows your feet to breath and ensure that you stay fresh am to pm. Use technology “built-in massage paints” , inspired by Chinese reflexology. In it shoe has flexi sole with arch grip system. (http://www.scribd.com/doc/15233456/bata-marketingproject) 3.5.3(d) Logistics To optimize utilization of production facilities a new logistics team focuses on obtaining specific orders from the market for best selling designs and sizes and ensures that all raw materials are available in the factories well in time so that the Company can produce and place in shops the products that consumers want. Thus the Company has been focusing on consumers and market demand which will reduce inventories and improve sales-to-stock turnover. The Company has closed five depots and converted them into C&F (carrying and forwarding) agents. It is also renegotiating transport costs to ensure a competitive transportation cost of the Company’s products to the sales outlets. 3.6 Stage-4 (Product Mix) The marketing mix is probably the most famous marketing term. Its elements are the basic, tactical components of a marketing plan. Also known as the Four P's, the marketing Bata India Pvt. Ltd 58 mix elements are price, place, product, and promotion. Read on for more details on the marketing mix. When marketing their products firms need to create a successful mix of: The right product Sold at the right price In the right place Using the most suitable promotion. To create the right marketing mix, businesses have to meet the following conditions: The product has to have the right features - for example, it must look good and work well. The price must be right. Consumer will need to buy in large numbers to produce a healthy profit. The goods must be in the right place at the right time. Making sure that the goods arrive when and where they are wanted is an important operation. The target group needs to be made aware of the existence and availability of the product through promotion. Successful promotion helps a firm to spread costs over a larger output. For example, Bata is constantly developing new shoes- the product element is the new product itself, getting the price right involves examining customer perceptions and rival products as well as costs of manufacture, promotion involves engaging in a range of promotional activities e.g. competitions, product tasting etc, and place involves using the best possible channels of distribution such as leading supermarket chains. The product is the central point on which marketing energy must focus. Finding out how to make the product, setting up the production line, providing the finance and manufacturing the product are not Bata India Pvt. Ltd 59 the responsibility of the marketing function. However, it is concerned with what the product means to the customer. Marketing therefore plays a key role in determining such aspects as: The appearance of the product - in line with the requirements of the market The function of the product - products must address the needs of customers as identified through market research. The product range and how it is used is a function of the marketing mix. The range may be broadened or a brand may be extended for tactical reasons, such as matching competition or catering for seasonal fluctuations. Alternatively, a product may be repositioned to make it more acceptable for a new group of consumers as part of a long-term plan. The price: Of all the aspects of the marketing mix, price is the one, which creates sales revenue - all the others are costs. The price of an item is clearly an important determinant of the value of sales made. In theory, price is really determined by the discovery of what customers perceive is the value of the item on sale. Researching consumers' opinions about pricing is important as it indicates how they value what they are looking for as well as what they want to pay. An organization’s pricing policy will vary according to time and circumstances. Crudely speaking, the value of water in the Lake District will be considerably different from the value of water in the desert. The place: Although figures vary widely from product to product, roughly a fifth of the cost of a product goes on getting it to the customer. 'Place' is concerned with various methods of transporting and storing goods, and then making them available for the customer. Getting the right product to the right place at the right time involves the distribution system. The choice of distribution method will depend on a variety of circumstances. It will be more convenient for some manufacturers to sell to wholesalers who then sell to retailers, while others will prefer to sell directly to retailers or customers. The promotion: Promotion is the business of communicating with customers. It will provide information that will assist them in making a decision to purchase a product or service. The razzmatazz, pace and creativity of some promotional activities are almost alien to normal business activities. Bata India Pvt. Ltd 60 The cost associated with promotion or advertising goods and services often represents a sizeable proportion of the overall cost of producing an item. However, successful promotion increases sales so that advertising and other costs are spread When marketing their products firms need to create a successful mix of: The right product Sold at the right price In the right place Using the most suitable promotion. To create the right marketing mix, businesses have to meet the following conditions: The product has to have the right features - for example, it must look good and work well. The price must be right. Consumer will need to buy in large numbers to produce a healthy profit. The goods must be in the right place at the right time. Making sure that the goods arrive when and where they are wanted is an important operation. The target group needs to be made aware of the existence and availability of the product through promotion. Successful promotion helps a firm to spread costs over a larger output. For example, a company like Bata is constantly developing new shoes- the product element is the new product itself, getting the price right involves examining customer perceptions and rival products as well as costs of manufacture, promotion involves engaging in a range of promotional activities e.g. competitions, product tasting etc, and place involves using the best possible channels of distribution such as leading supermarket chains. The product is the central point on which marketing energy must focus. Finding out how to make the product, setting up the production line, providing the finance and manufacturing the product are not Bata India Pvt. Ltd 61 the responsibility of the marketing function. However, it is concerned with what the product means to the customer. Marketing therefore plays a key role in determining such aspects as: The appearance of the product - in line with the requirements of the market The function of the product - products must address the needs of customers as identified through market research. The product range and how it is used is a function of the marketing mix. The range may be broadened or a brand may be extended for tactical reasons, such as matching competition or catering for seasonal fluctuations. Alternatively, a product may be repositioned to make it more acceptable for a new group of consumers as part of a long-term plan. The price: Of all the aspects of the marketing mix, price is the one, which creates sales revenue - all the others are costs. The price of an item is clearly an important determinant of the value of sales made. In theory, price is really determined by the discovery of what customers perceive is the value of the item on sale. Researching consumers' opinions about pricing is important as it indicates how they value what they are looking for as well as what they want to pay. An organization’s pricing policy will vary according to time and circumstances. Crudely speaking, the value of water in the Lake District will be considerably different from the value of water in the desert. The place: Although figures vary widely from product to product, roughly a fifth of the cost of a product goes on getting it to the customer. 'Place' is concerned with various methods of transporting and storing goods, and then making them available for the customer. Getting the right product to the right place at the right time involves the distribution system. The choice of distribution method will depend on a variety of circumstances. It will be more convenient for some manufacturers to sell to wholesalers who then sell to retailers, while others will prefer to sell directly to retailers or customers. The promotion: Promotion is the business of communicating with customers. It will provide information that will assist them in making a decision to purchase a product or service. The razzmatazz, pace and creativity of some promotional activities are almost alien to normal business activities. Bata India Pvt. Ltd 62 The cost associated with promotion or advertising goods and services often represents a sizeable proportion of the overall cost of producing an item. However, successful promotion increases sales so that advertising and other costs are spread over a larger output. Though increased promotional activity is often a sign of a response to a problem such as competitive activity, it enables an organization to develop and build up a succession of messages and can be extremely cost-effective. over a larger output. Though increased promotional activity is often a sign of a response to a problem such as competitive activity, it enables an organisation to develop and build up a succession of messages and can be extremely costeffective. 4 P’s PRODUCT PLACE PRICE PROMOTION 3.6.1 (1st & 2nd P: Product and Price) They manufacture products for Men’s, women`s and kid`s wear. Bata India Ltd. has a large variety of shoes for all the sections. They also make accessory for men’s and women’s. Bata India Pvt. Ltd 63 Catalog Space For Catalog Bata India Pvt. Ltd 64 Bata’s product mix Width Bata Kid’s footwear Men’s footwear Ladies footwear CASUALS FORMALS FORMALS Bubble gummer Bata Bata Socks Hush Puppies Marie Clair Hand bag SCHOOL North Star North Star Range Tiger Accessories School bag SANDLES Caps CASUALS Marie Clair Shoe polish Bata Bata Shoe Brush Hush Puppies North Star Weinbrenner Shoe Laces SPORTS Belt Power SPORTS FOOTCARE Power Dr. Scholle’s SLIPPERS Bata Sandak FOOTCARE Dr. Scholle’s Bata India Pvt. Ltd 65 SLIPPERS Bata Sandak Product DNA Hush Puppies: Actual Product (Casual shoes, Classic design, Authentic style, Natural latex rubber) Core Benefit (Soft, Breathable and very comfortable) Augmented Product (Casual flair, Unique, Modern, Bounce technology for shock absorption and energy return in every step, Wave Reflex outsole provide complete freedom of movement for your feet.) Bata India Pvt. Ltd 66 Dr. Scholl: Actual Product (Light, Soft shoes) Core Benefit (Comfortable) Augmented Product (Unique anatomic insole will give your feet that extra cushioning needed to keep all stresses at bay from your feet while providing support from all sides., Ribbed surface of the insole gently massage your feet while walking.) North Star: Actual Product (All type of material) Core Benefit (Stylish, Trendy comfortable and durable, Available in wide range) Augmented Product (Graphic Prints, Fashionable) Bata India Pvt. Ltd 67 Power: Actual Product (Sport shoes, Sporty range, performance oriented shoes) Core Benefit (Durability, Trendy, value, Performance, Responsiveness) Augmented Product (Unbeatable price, Affordable price, Unique features) Marie Claire: Actual Product (Trendy details and Quality product) Core Benefit (Stand for contemporary and modern styling, Feminine shoes and sandals) Augmented Product (Fashion lifestyle brand name and its value) Bata India Pvt. Ltd 68 Bubblegumer: Actual Product (stylish kids shoes) Core Product (Good quality, comfortable, safety) Augmented Product (Funny and colorful 0 shoes) Bata India Ltd. make products of the following categories 1.) Men`s Wear: They make products of preferably for service men and also have Segment of sports shoes for young men under a different . company name POWER . They have a large Variety of products such as: Closed dress Closed casual Sandals Chapels Sports wear Closed dress range starts from 699 to 2699 Closed casual range starts from 399 to 1999 Sandals range starts from 399 to 1899 Chapels range starts from 169-1799 Sports shoes range start from 699-1799 Bata India Pvt. Ltd 69 Closed dress . (http://www.bata.in/catlist.php?catItem=11) Closed casual (http://www.bata.in/catlist.php?catItem=21) Sandals . (http://www.bata.in/catlist.php?catItem=31) Bata India Pvt. Ltd 70 Chapels (http://www.bata.in/catlist.php?catItem=41) 2.) Women’s wear: They make products of preferably missy and have large variety of product such as:- Chappals Closed Sandals Chappals range starts from 139 to 1249 Closed range starts from 299 to 1299 Sandals range starts from 299 to 1249 Bata India Pvt. Ltd 71 Chapels (http://www.bata.in/catlist.php?catItem=12) Closed ( http://www.bata.in/catlist.php?catItem=22) 3.) Kid`s wear : they make products of the age group 6-17 years Infants Closed Sandals Infant range from 199 Closed range from 159 to 699 Sandals range from 199 to 599 Bata India Pvt. Ltd 72 Infants (http://www.bata.in/catlist.php?catItem=23) Closed (http://www.bata.in/catlist.php?catItem=33) In order to increase their product offering, they are planning to add new variety of shoes. For example, they proposing new technology of sports shoes to be in a competition from Rebook and Addidas Pricing Strategy of Bata 1.) Psychological Pricing strategy: Bata always use this pricing strategy. In it price of a product fix by company at 399/ 499/ 599 range. Psychologically affect the consumer mind, that its is in the range of 300. Bata India Pvt. Ltd 73 For eg:- Bata have a shoe for sale at 499 Rs, if we see it is almost of 5oo Rs but company fix its price at 499 Rs, so that it Psychologically affect the consumer mind that its is in the range of 400 Rs and Consumer buy that product. By giving the 1Rs off company attract the consumer to buy their product. Bata India Pvt. Ltd 74 3.6.2 (3rd P: Place) Bata Stores In India Due to clear segmentation in the footwear industry the Bata stores are of following four types Bazaar stores Family stores City stores Flagship stores Bazar Store: These are the stores which serves the volume market. These stores of Bata are located all over the country. These stores are located in the local markets of each city and town. They offer high value for money and variety. This is the most common form of Bata stores. Family Store: Factory stores first opened in 2003 and are the largest and the most valueoriented stores of our retail chain. They are ideally located in power centres, commercial parks and outlet centres with easy parking facilities. The product selection offers more than 10,000 styles of ladies, men, children and sport shoes with related accessories and apparel sold at attractive price points. It is based on a self service concept with helpful staff available for service at anytime. City Store: Bata operates stores in many of the big cities. Bata City Stores offer urban customers the best in today’s fashion footwear and accessories. These stores are in prime locations in the cities, and provide a high level of customer service, exclusive fashion shoe lines with complementary accessories, and contemporary shopping environments to discerning shoppers. Flagship Stores: Bata Flagship Stores offer a wide assortment of fashion, casual and athletic footwear for the entire family. Located primarily in urban and suburban shopping centers, these spacious stores offer the best value by providing good quality shoes at great prices. Bata India Pvt. Ltd. 75 Service is fast thanks to a self selection shopping environment with qualified staff to serve and assist. One of the cornerstones of the Bata Flagship Stores is the sports area: a real store within a store. All the key international sports brands are featured, carefully selected for the most discerning customers. Bata Stores Some Facts Initially the Indian stores of the shoe brand were owned by the company. This resulted in the shopkeepers becoming averse to the increase in the competition from the other international brands like ADIDAS and REEBOK which were flooding the Indian markets. These brands not only had better distribution policies, they were also advertising their footwear more aggressively. The local shop owners did not pay any heed to this threat from the global brands, and even if they did, they lacked the competency to compete with them. This had resulted in growing losses for the company. Then the company decided to start franchising their stores to the owners instead of hiring them for selling their shoes. Bata India Pvt. Ltd. 76 Manufacturing Plants In India Bata have five manufacturing plants in India Bataganj Factory (Bihar) Batanagar Factory (West Bangal) Pennya Factory (Karnataka) Faridabad Factory (Haryana) Mokameghat Factory (Bihar) Bata India Pvt. Ltd. 77 Manufacturing Process flow chart Raw Material Stock compou u chemic out Threa Binding Make Sole Pull Cement advresive Folding Rubber Latex Cutting Make Binding Stamping Stitching Assemble Vulcanizing Controlling Canvas Shoes Manufacturing process: (Used in Faridabad plant), Bata use batch production system. Although it only manufacture canvas shoes but with in that it has various size variants. With in the batch production system, assembly line process is followed. The plant has 2 assembly Bata India Pvt. Ltd. 78 Boxe line working simultaneously, one for the stitching of shoes upper and other is a semiautomated conveyor belt for assembly of the shoes, at the end of which we get the shoe. Simultaneously, there are other process like the production of adhesive cement and rubber latex, shoe binding etc are done simultaneously at different workstations. The plant in all has 6 conveyor belt and 6 stitching line but presently the management is operating only 3 of them, in view of the low demand for their products in year. One conveyor belt requires 35 people to work and 6 people are required on the stitching conveyor. The factory employs 450 people. One set of conveyors (i.e both stitching and assembly included) produces about 1800-1900 pairs of shoes in one day. The gross monthly production of the plant average around 5 lack pairs. Note: we went to a Bata plant in Faridabad, for understanding the manufacturing process 3.6.3 (4th P: Promotion) Integrated Marketing Communication . Promotional Tool Advertising Print Media Personal Selling Electronic Media Bata India Pvt. Ltd. PR Sales Promotion Tele Marketing Direct Marketing Online Marketing Strategy Direct Mail 79 3.6.3(a) Advertising and Sales Promotion Advertisement:Advertising is the means of informing as well as influencing the general public to buy products or services through visual or oral messages. A product or service is advertised to create awareness in the minds of potential buyers. Some of the commonly used media for advertising are T.V., radio, websites, newspapers, magazines, bill-boards, hoardings etc. As a result of economic liberalization and the changing social trends advertising industry has shown rapid growth in the last decade. Advertising is one of the aspects of mass communication. Advertising is actually brand-building through effective communication and is essentially a service industry. It helps to create demand, promote marketing system and boost economic growth. Thus advertising forms the basis of marketing. The Company has an advertising and sales promotion department to look after sales promotions, brand management and other marketing tools engaged by the Company to aid its product marketing efforts. This department works closely with both the Retail and well as Non Retail segments of the marketing division of the Company. Major methods for advertising:- Print MediaMagazines: Magazines ads can get quite expensive. Find out if there's a magazine that focuses on your particular product. If there is one, then the magazine can be very useful because it already focuses on your market and potential customers. Note:- very often company gave advertisement in fashion magazines. Newspapers: Almost everyone reads the local, major newspapers. You can get your business in the newspaper by placing ads, writing a letter to the editor or working with a reporter to get a story written about your business. Note:- Only at the sale period and some specific seasons they gave their advertisement. Bata India Pvt. Ltd. 80 Space for Advertisement Cutting Electronic MediaRadio announcements: A major advantage of radio ads is they are usually cheaper than television ads, and many people still listen to the radio, or example, when in their cars. Ads are usually sold on a package basis that considers the number of ads, the length of ads and when they are put on the air. . A major consideration with radio ads is to get them announced at the times that your potential customers are listening to the radio. Note:- Company does not use this mode of advertisement. Television ads: Many people don't even consider television ads because of the impression that the ads are very expensive. They are more expensive than most of major forms of advertising. However, with the increasing number of television networks and stations, businesses might find good deals for placing commercials or other forms of advertisements. Television ads usually are priced with similar considerations to radio ads, that is, the number of ads, the length of ads and when they are put on the air. Note:- Now a days company does not use this mean of advertisement. E-mail messages: These can be wonderful means to getting the word out about the business. In this we design a e-mail software to include a "signature line" at the end of each Bata India Pvt. Ltd. 81 of our e-mail messages. Many e-mail software packages will automatically attach this signature line to our e-mail, if we prefer. Note:- Company does not use this mode of advertisement Web Pages: You probably would not have seen this means of advertising on a list of advertising methods if you had read a list even two years ago. Now, advertising and promotions on the World Wide Web are almost commonplace. Businesses are developing Web pages sometimes just to appear up-to-date. Special events: These tend to attract attention, and can include, e.g., an open house, granting a special award, announcing a major program or service or campaign, etc. Bata India Pvt. Ltd. 82 Video advertisement: Space for CD Conclusion: Very less effort by Bata, because they have good quality at low prices and they have value for money product. So they don’t emphasizes on promotion, it will also help to cut their cost. Company gives advertisement in news or T.V one in a while to stable the position in the mind of the customer. Bata do not promote the product to sell the product, but for the remember its name in consumer mind. 3.6.3(b) Sales Promotion A sales promotion strategy is an activity that is designed to help boost the sales of a product or service. This can be done through an advertising campaign, public relation activities, a free sampling campaign, a gift campaign, a trading stamps campaign, through demonstrations and exhibitions, through prize giving competitions, through temporary price cuts, and through door-to-door sales, telemarketing, personal sales letters, and emails. The importance of a sales promotion strategy cannot be underestimated. This is because a sales promotion strategy is important to a business boosting its sales. While developing a sales promotion strategy for the product it is important to keep the following points in mindConsumer attitudes and buying patterns, Brand strategy, Competitive strategy, Advertising strategy, and other external factors that can influence your products, availability and pricing. Bata India Pvt. Ltd. 83 Sales Promotion strategies There are three types of sales promotion strategies:1:-A push strategy 2:-A pull strategy or 3:-A combination of the two A 'push' sales promotion strategy involves 'pushing' distributors and retailers to sell your products and services to the consumer by offering various kinds of promotions and personal selling efforts. The basic objective of this strategy is to persuade retailers, wholesalers and distributors to carry your brand, give it shelf space, promote it by advertising, and ultimately 'push' it forward to the consumer. Typical push sales promotion strategies include; buy-back guarantees, free trials, contests, discounts, and specialty advertising items. Bata India Pvt. Ltd. 84 3.6.3(c) Public Relation Building Good Relations with company’s various publics by obtaining favorable publicity, building up a good corporate image & handling or heading off unfavorable rumors, stories and events. Activities of PR Press Relations / Press agentry Product Publicity Public Affairs Lobbying Investor Relations Development Award Won: 1.) The company bagged the Retailer of the year award for the year in footwear category as a part of the Reid and Taylor Award for Retail Excellence which was presented during the Indian Retail Summit 2006. 2.) They received the country`s most coveted Retail Award at the 4 th Images Retail Award (IRA) 2007 Bata India Pvt. Ltd. 85 3.) Bata was honored with most admired brand of the year 2006-2007 in footwear category. 4.) They have been rated as one of the Top 10 super brand in India and Awarded Super Brand award on April 12,2007. 5.) In February 21, 2008 , they have been given AMITY corporate Excellence Award 2008. This award has been given for Bata`s excellent performance and retail growth during 2007. ( http://www.sharekhan.com/MarketCorner/DetailedReport.aspx?Type=COMP-HIS&SSKICode=BATA) Press Release a.) 2. 12. 2009 | Chennai gets its first exclusive Hush Puppies store Chennai, November 30, 2009: In a proposition to offer customers the best of casual footwear, Bata India, the leading footwear retailer in the country unveils Hush Puppies outlet at Ampa Mall. The Hush Puppies store is spread across over eight hundred square feet. The outlet showcases an exciting range of soft, breathable and very comfortable footwear from Hush Puppies. A truly modern creation that enjoys immense popularity across the globe for its authentic style and casual flair, Hush Puppies is the champion of easy going style. On offer are a range of international and classic designs in Hush Puppies for today’s men and women who believe in style and comfort. The range utilises state of the art technology to merge comfort and fashion. Keeping in line with the Hushpuppies tradition the shoes have a lightweight sole allowing for ease of movement and are ideal for casual wear. Commenting on the launch, Mr. Marcelo Villagran, Managing Director, Bata India Ltd. remarked, “Living up to our philosophy of offering the best of footwear fashion in India, we now are happy to introduce Hush Puppies outlets for our valued customers in Chennai. Designed to offer ultimate comfort, Hush Puppies has changed the kind of shoes we wear and ushered in a more relaxed lifestyle. We aim to offer complete range of Hush Puppies shoes and sandals to our customers through these stores. Plans are afoot to open similar outlets in India.” The Hush puppies brand has huge popularity with consumers looking for comfortable fashion. Opening of these exclusive stores is a part of the expansion plan, so as to ensure availability of a great range of these international designs to the customers in the major cities. Bata India Pvt. Ltd. 86 b.) 19. 6. 2009 | Bata brings the best of footwear fashion to Mohali Unveils new family store latest in technology and brands Mohali, May 8 2009: Bata India Ltd. today unveiled a traditional family store at SAS NGR, Mohali. Modelled after the International Bata stores, this new store is all set to introduce customers in Mohali to a range of stylish and comfortable footwear brands from Bata. The Family store is spread across over one thousand square feet and offers customers a comfortable & traditional shopping experience in air conditioned comfort. The large format enables proper display of the shoeline, which has over eight hundred new designs on offer. Be it elegant Marie Claire, stylish Weinbrenner, smart and sporty North Star or Power, on offer is a range of lifestyle shoe line that exudes confidence and style of the 21st century youth. Wide variety of comfortable and smart footwear like Hush Puppies, Scholl, Comfit range, Ambassador to name a few are also available for those looking for daylong comfort. Tiny tots can walk out with their favourite Bubblegummers. Sourse: www.Bataindia.com 3.6.3(d) Personal Selling Bata institutional sales division is an exclusive division of Bata India which caters to the requirement of corporate customers across the country. The institutional sales team customizes footwear solution to meet the requirements of various industries like Hospitality, Aviation, Healthcare, Educational and Government organization. Hospitality Industry: Each work place is different, as are the needs of the working people. Bata offers shoes with climate management technology with breathable genuine leather upper & linings along with unique foot bed insole which not only offers comfort but fresh feel to the wearers for those standing for long hours. Corporate & Government Organization: Bata Institutional Sales Division consults and advises corporate customers on footwear requirements of various industries Bata India provides Customized Shoe Solutions – we also advise and guide corporate staff to use the correct shoes as per the job descriptions. Schools: Parents as well as schools trust Bata when it comes to school shoes, all over the country. We at Bata realize how critical it is for the children to wear school shoes specifically Bata India Pvt. Ltd. 87 and technically designed to support the needs of the growing feet. Bata has come up with a patented MICROBAN technology, which keeps shoes completely bacteria free, which results in odor reduction, keeping feet clean, fresh and hygienic as well. 3.6.3(e) Direct Marketing Not as of now. Our website today, aims to be a window to the company and to essentially dispense information about the company, its products and stores to consumers. The next phase of development will look into possible business through e-commerce. 3.6.3(f) Strategy of the Company The Company’s management has evolved the strategy of the Company after considering the Company’s strengths and weaknesses. The Company believes that this strategy will enable the Company to build on the opportunities in the market. Cost optimization and margin improvement The Company is focusing on margin improvement and cost effectiveness programs which have started yielding results. The Company has initiated strict control on costs in purchases and outsourcing and is looking at global sourcing for raw materials to improve the net realization. The Company has also been clearing old merchandize through discount sales, write-offs, etc. which will enable it to focus on improving sales. Tax-free zone manufacturing base A part of the outsourcing of manufacturing is now routed by the Company from contract manufacturers based in Himachal Pradesh and Uttaranchal which are both states offering concessions in excise, sales tax and corporate tax. The Company is also looking at and negotiating with third party manufacturing facilities in two other tax-free states of Assam and Jammu and Kashmir. The Company is thus aiming to maximize its margin improvement programs. Rationalizing and re-engineering As part of the rationalization of work practices, processes and modernization the Company offered Voluntary Retirement Scheme (VRS) to its work force. 1520 employees have accepted the VRS in year 2004. The Company plans to introduce a new VRS in year 2005. Bata India Pvt. Ltd. 88 The VRS is expected to reduce the Company’s employee cost in the medium term. The Company has modernized seventeen stores, opened twenty new stores and closed down sixty unviable stores. Focus on collecting old outstanding dues The Company`s sales team is fully focused on collecting old outstanding amounts from wholesalers thus reducing working capital. The Company is adopting a dual policy to collect the old outstanding. On one hand the Company is negotiating settlement with the wholesalers and offering discounts to those willing to pay he reduced amount. At the same time the Company is filing legal cases against those who are not willing to settle and pay. Training and restructuring the frontline sales force The Company has reorganized its front line sales force and has promoted its best performing shop managers as district managers. It has undertaken an intensive training programme for its shop assistants and managers to ensure excellence in service to the customers. The Company has also undertaken a rural marketing thrust where the market is growing faster than the urban markets. The Company is bringing in young managers with fresh ideas to inspire and empower the workforce with the requisite skills. Brands and designs The Company is consistently trying to leverage on its established brands like Mocassino, Super Stride, Quo Vadis, Jubliee etc. at the same time create a niche for its new brands like Azaleia, Toppers, Bubblegummers, Weinbrenner and Power International. The Company has been focusing on specialty value added products for better margins. It has been continuously introducing new designs in shoes for men, ladies and children. The Company is endeavouring to break the myth of the price factor, by Introducing an economy range of products that will encompass both style and quality. Borrowings of the Company The shareholders of the Company have in the Annual General Meeting held on June 17, 2004, given the authority to the Board of Directors to borrow up to Rs.1,000 against the security of the Company.s assets. Details of the borrowing of the Company . Secured and Bata India Pvt. Ltd. 89 Unsecured loans is given in the Section tiled .Financial Performance of the Company. on page 60 of this draft Letter of Offer. (http://www.sebi.gov.in/dp/bata.pdf) 3.7 STP of Bata’s Product lines Kids wear Bata deals with two brands to serve the kids footwear market. Both cater the same segment whereas the target & way it is positioned differs based on the need & economic status. Segment Kids up to 14 years of age. Casual: Bubble Gummer Target Kids of middle & upper class families. Upper Class Families Secondary Target Middle Class Families Primary Target Lower Class Families Terser Target Positioning Superior quality Bata India Pvt. Ltd. 90 Soft Attractive Fashionable School Shoes: North Star & Tiger Target School going children up to 14 years of age Children of lower middle class to upper class families. Upper Class Families Terser Target Middle Class Families Primary Target Lower Class Families Secondary Target Positioning Long lasting Comfortable Low maintenance Affordable price Bata India Pvt. Ltd. 91 Men’s Footwear Bata’s footwear for men’s have both own brand and tie up brand products. They cater to different social class. It’s own brand “Bata” has variants in all the economic segments whereas it’s tie up brands are specific to a particular economic segment. Segment Men above 14 years of age. 14-22 years 23-35years 36-55 years 56-75years Formal Wear Target Its main target is high school students to working executives. Economic Status Brand/s Upper Bata, Hush puppies, Lee cooper Upper Middle Bata, I D Middle Bata, North Star Positioning 1. All brands are positioned as comfortable and durable. Bata India Pvt. Ltd. 92 2. Brands for Upper middle class and above are positioned as shoes looking elegance & class, having new technology, more comfortable finishing and better material. Casual Wear Target Students and working executives. Economic Status Brand/s Upper Bata, Hush puppies, Lee cooper, Wein brenner Upper Middle Bata, I D Middle and lower middle Bata, North Star Positioning 1. Brands for middle & lower middle class are promoted as comfortable, durable and good looking. 2. Brands for upper middle and upper are positioned in a fashionable and stylish way. Sports Bata doesn’t have a brand in its own name, whereas it manufactures the brand “Power”. Target Sports shoe variants doesn’t have a separate target. They are used by men for both sports & style. They are targeted mainly for young adults and students who use this more for style rather than for sports. Bata doesn’t emphasize on professional sports shoe. Its variants are rather for general purpose sports utility. Bata India Pvt. Ltd. 93 Economic Status Brand/s Upper middle and above Rbk, Nike, Lotto, Adidas Middle Power, Portland Positioning 1. The brands for upper middle and above are positioned as stylish, powerful, comfortable and of the latest fashion & technology. 2. The middle class brands are promoted as modern, comfortable, durable and affordable. Ladies footwear: Apart from its own brand, Bata has tie up with Mari Clair for its women range of formal and casual shoes. Both are in the price range suitable for middle class and above. Segment Women above 14 years of age belonging to the social class “middle class and above”. Formal Wear Target It is targeted for adult students and working women. Positioning All brands are positioned as comfortable, durable, trendy and modern . Bata India Pvt. Ltd. 94 . Casual Wear Target Targeted at women of all age belonging to the social class “upper middle and above”. Positioning Positioned as high quality, trendy, comfortable and durable footwear. Sports Target These are used for both sports and style purpose and hence targeted at young .women of age group 16 to 35. Economic Status Brand/s Upper middle and above Rbk, Nike, Lotto, Adidas Middle Power, Portland Position 1. The brands for upper middle and above are positioned as stylish, powerful, comfortable and of the latest fashion & technology. 2. The middle class brands are promoted as modern, comfortable, durable, stylish and affordable. Bata India Pvt. Ltd. 95 Slippers (For both men and women) Bata has its own slipper range namely Sandak & Bata hawai which is made for both men and women in all range. Segment People of all class, ranging from lower middle to upper and of all age groups. Target Meant for all quality conscious individuals of all age groups and class. Positioning 1. Can be used both indoor & outdoor 2. for all seasons 3. Long lasting 4. Affordable 5. Women‘s slippers are positioned as trendy while men’s are positioned as good looking. Dr. Scholl’s Foot care (For both men & women) These are prescribed by doctors for people having problems in the nerves, diabetics and related diseases. This product was initially brought on prescription but now people are buying it out of their own interest and hence have good growth opportunity. Bata has Bata India Pvt. Ltd. 96 designed this product in various models giving a better advantage over the local physiotherapy made standard designs. Segment Health conscious individuals. Target People having disease/ problems requiring medicinal shoes and health conscious foot wear users. Positioning Positioned as medicinal foot wear with modern look. Accessories To supplement its foot wear business, Bata also sells shoe accessories like socks, lace, shoe polish etc., In order to give a family shopping experience, Bata is also selling leather and related products like bag, belt and caps. It has plans to sell more such products in the future through its flagship & city shops. However no specific segment or target is aimed for these products. These are just to augment its existing product line and they work as product fillers Segment Reporting The group has chosen geographical segments as primary segments. Analysis of geographical segments is based on areas where the customers are located. It is engaged primarily in manufacture and sale of footwear which is the only reportable secondary segment. Bata India Pvt. Ltd. 97 3.8 Cycle-5 (Customer) For example: total population is 1000, out of which target customer is 100 and from the 100 target customer only 60 customer buy Bata product. So, 60 are the customer to company who buy their products. 3.9 Expansion Plan and Future Plan Bata India, among the oldest organized retailers of the country, in a shift of retail strategy is now focusing on opening large format stores. “Bata India has opened over 150 new large format stores since 2006 and will continue to open 60 new stores every year Bata India to focus on large format stores across tier II & III cities. (http://www.indiaretailbiz.com/blog/2009/03/16/bata-to-focus-on-international-style-large-format-store) Footwear major Bata India Limited has informed that it has sold-off its ‘Hawai’ brand to Brazilian company 'Alpragatas' for Rs 3.90 crore. The reason behind selling off ‘Hawai”-the popular brand was stated as its cheaper duplication in the unorganized sector. (http://www.stockwatch.in/bata-india-sell-its-%E2%80%98hawai%E2%80%99-brand-brazilian-firm-rs-390-crore-2882) Add new machines to produce sophisticated new designs and comfortable shoes. (http://content.icicidirect.com/Research/DirectorsReport.asp?icicicode=BATIND) Bata India Pvt. Ltd. 98 4. Financial Analysis 4.1 Analysis of Bata Reports The following graphs made by referencing the Balance Sheet, Profit & Loss Account of Bata, which is attach in the annexure of the report. The following graphs show the year-wise growth of different category Total Income 1200 1012.85 1000 934.06 823.96 Figure in crores 800 600 400 200 0 2008 2007 years 2006 The total income of Bata in 2006 is 823.96 cr. which is less than from 2007 by 9.17% and income of 2007 which is 934.06 cr. is less than income of 2008 by 6.57% and income of 2008 is 1012.85 which is the highest. Hence, 2008>2007>2006 Bata India Pvt. Ltd. 99 Tax Paid 11.1 12 9.03 Figure In Crore 10 8 6 3.75 4 2 0 2008 2007 2006 year Bata tax paid graph shows that in year 2006 Bata paid tax which is 9.03 cr. which is 44% more than year 2007 and tax paid in year 2007 is 3.75 cr. which is 61.25% less than year 2008 and 44% less than in year 2006, and highest tax paid is 11.1 cr. in year 2008. Hence, 2008>2006>2007 Bata India Pvt. Ltd. 100 Figure in Crore Expenditure on the salary of employees 184 182 180 178 176 174 172 170 168 181.47 183.21 173.22 2008 2007 2006 year Bata expenses on the salary of employees is 183.21 in 2006 which is more than 2007 by 0.94%, and expenses in 2007 is 181.47 which is more than year 2008 by 4.49% and expenses. Hence, 2008<2007<2006 Note: Due to recession, to cut the cost. Company rationalized the salary of employs. But they don’t fire any one from the job. Bata India Pvt. Ltd. 101 Profit Margin 70 60.74 Figure in Crore 60 47.44 50 40.15 40 30 20 10 0 2008 2007 2006 year Bata profit margin in year 2006 is 40.15 cr. which is less than in year 2007 by 10.41%, profit margin in year 2007 is 47.44 cr. is less than from 2008 by 19% and maximum profit margin is in year 2008 which is 60.74 cr. Hence, 2008>2007>2006 Bata India Pvt. Ltd. 102 Total Assets 400 350 335.78 303.18 300 Figure in Crore 272.52 250 200 150 100 50 0 2008 2007 2006 year Bata total assets in year 2006 is 272.52 cr. which is less than 2007 by 7.67%, total assets in year 2007 is 303.18 cr. which is less than 2008 by 8.14% and total assets in 2008 is maximum which is 335.78 cr. Hence, 2008>2007>2006 Bata India Pvt. Ltd. 103 Horizontal Analysis of Balance Sheet (Bata) (Current year) (Base year) 2008 2007 ABSOLUTE % (Dec ) (Dec) CHANGE CHANGE (Amt in (Amt in Crores) Crores) 291.15 251.38 39.77 15.82 PARTICULARS COMMENTS SOURCE OF FUNDS Total Share holder's Funds Share Capital Total share holder’s funds increase in year 2008 64.26 64.26 0 0.0 There is no change in the amount as compared to previous year Reserves and 226.89 187.12 39.77 21.25 Surplus Due to the increase in firm's Reserves and Surplus firm will be able to run its business in uncertain conditions Secured loans 35.91 45.07 -9.16 -20.32 Secured loans decreases because of increase the profits in business Unsecured 8.72 6.73 1.99 29.57 loans Total Debt Unsecured loans increase in year 2008 December 44.63 51.80 -7.17 -13.84 By the source of funds total debt decrease in year 2008 Financial risk increased. Total Liabilities 335.78 303.18 32.6 10.72 The liability increase in year 2008 because of increase in unsecured loan, reserves and surplus APPLICATION Bata India Pvt. Ltd. 104 OF FUNDS Gross Block 349.33 324.88 24.45 7.53 There is an increase in company's fixed assets. Therefore, outflow of cash is taking place. Less: 232.31 220.96 11.35 5.13 It is according to the total Depreciation/ amount of Fixed Assets Amortisation they own. Net Block 117.02 103.92 13.1 12.60 As there is an increase in Net Block but the % is low than Gross Block as there will be more depreciation due to increased value or marginal expenses Capital Work 0.86 0.31 0.55 177.41 in Progress There is an increase in capital work in progress because of purchase of Fixed Assets so they would be under construction Investments 17.25 17.25 0 0 No change in investment 292.23 303.74 -11.51 -3.78 stocks decreases because CURRENT ASSETS , LOAN & ADVANCES Inventories of liability increase Sundry 25.89 22.86 3.03 13.25 Debtors Cash & Bank Sundry debtors increased because of loan increases 26.75 32.72 -5.97 -18.24 Balance Cash and bank balance decreases because of assets decreases and liability increases Loan and Bata India Pvt. Ltd. 96.75 53.23 43.52 81.75 Loan increases because 105 Advances liability increases and loan comes under liability LESS: CURRENT LIAB. & PROV. Current 194.36 198.4 -4.04 -2.03 Liabilities Current liability decrease because the cash and bank decrease to reduce liability Provisions 54.26 33.65 20.61 61.24 Provisions increased Net Current 193 180.50 12.5 6.92 Net current Assets Assets Miscellaneous increased 7.65 1.2 6.45 537.5 Expenses not Miscellaneous expenses increased w/0 Total Assets 335.78 303.18 32.60 10.75 Total assets increased due to purchase assets Contingnet Liabilities Bata India Pvt. Ltd. 45.28 76.52 -31.24 -40.82 Contingent liability decreased 106 Horizontal Analysis of Profit & Loss Account (Bata) (Current year) (Base year) 2008 2007 ABSOLUTE % (Dec ) (Dec) CHANGE CHANGE (Amt in (Amt in Crores) Crores) 1012.33 890.79 121.54 13.64 PARTICULARS COMMENTS INCOME Sales Turnover Sales turnover increased in year 2008 because of increasing profits in the company Other Income 11.2 14 -2.80 -20 Other income decreased with an absolute change and absolute percentage change of 20 percent Stock 10.68 29.27 -18.59 -63.51 Adjustment Total Income Stock adjustment decreased 1012.85 934.06 78.79 8.43 Total income increased because of increased in sales turnover EXPENDITURE Raw Material 455.33 437.63 17.7 4.04 Raw material expenditure increased because of making more shoes Excise Duty 22.86 23.58 -0.72 -3.05 Excise duty decreased because of less foreign exchange from previous year Power & Fuel Cost 28.22 25.74 2.48 9.63 Power and fuel cost increased because of increase in transportation Bata India Pvt. Ltd. 107 use Other 29.22 29.74 -0.52 -1.74 Manufacturing Very less no. of change in other manufacturing Expenses expenses, it decreased because of less manufacturing of stock Employs Cost 173.22 181.47 -8.25 -4.54 Employs cost decreased by -8.25 because of decreased in employment in a company Selling and 184.71 141.73 42.98 30.32 Administration increase in selling and Expenses Miscellaneous administration expense 16.45 16.41 0.04 0.24 Expenses Less: It increased because of Miscellaneous expenses increased 0 0 0 0 102.08 77.76 24.32 31.27 No change, neutral Preoperative Expenditure Capitalized Profit before interest, Profit increased before interest, depreciation and depreciation & taxes. tax Interest & 11.24 10.56 0.68 6.43 Interest and financial Financial charges increased because Charges of high purchases Profit Before 90.84 67.2 23.64 35.17 Tax Depreciation Profits before taxes and depreciation increased. 19 16.01 2.99 0.18 Depreciation on assets increased Profit Before 71.84 51.19 20.65 40.34 Tax Tax Profits increased before tax 11.1 3.75 7.35 196 Tax increased in the company Bata India Pvt. Ltd. 108 Profit After 60.74 47.44 13.3 28.03 0 0 0 0 69 40.15 28.85 71.85 Profits after tax increased Tax Adjustment No change Below Net Profit P&L Bal. brought Profit and loss balance brought forward increased forward Appropriation 24.87 18.59 6.28 33.78 Appropriation increased P&L Bal. 104.87 69 35.87 51.99 P&L bal. carried down Carried down increased more than 50 percent Equity 16.07 12.85 3.22 25.05 0 0 0 0 2.73 2.18 0.55 25.22 Equity dividend increased Dividend Preference No change Dividend Corporate Dividend Tax Corporate dividend tax increased by approx 25% because company has to give corporate tax on a profit of a company Bata India Pvt. Ltd. 109 4.2 Competitor analysis of Bata By using the Balance sheet and Profit and Loss Account of Bata, Lakhani and Liberty which is attach in annexure. Total Income 1200 1012.85 Figure in Crore 1000 800 600 400 230.98 152.36 200 0 Bata Lakhai Liberty year Bata has maximum total income rather than Lakhani and liberty and after Bata, liberty has highest total income and then Lakhani’s total income which is 152.36 cr. Bata India Pvt. Ltd. 110 Profit 70 60.74 60 Figures in Crores 50 40 30 20 8.42 10 3.5 0 Bata Lakhani Liberty year Bata has maximum profit. Bata record 60.74 cr profit and Lakhani has 8.42 cr which more than liberty Bata India Pvt. Ltd. 111 Horizontal Analysis of Balance Sheet (Lakhani) (Current year) (Base year) 2008 2007 ABSOLUTE % (Dec ) (Dec) CHANGE CHANGE (Amt in (Amt in Crores) Crores) 13.45 13.45 0 0 No change Share Capital 13.45 13.45 0 0 No change Reserves and 48.99 47.87 1.12 2.34 PARTICULARS COMMENTS SOURCE OF FUNDS Total Share holder's Funds Surplus Increase in absolute change because reserves and surplus increased Secured loans 98.52 29.16 69.36 237.86 Increased in absolute change and percentage change because of secured loans increases Unsecured 0.46 1.96 -1.5 -76.53 loans Unsecured loans decreases in absolute change and as well in percentage Total Debt 98.98 31.12 67.86 218.06 total debt of the company increased which is not good for company Total 161.42 92.44 68.98 74.62 Liabilities Liabilities are also increased because of loans APPLICATION OF FUNDS Gross Block 88.09 34.86 53.23 152.70 Gross block increased due to increase in funds Bata India Pvt. Ltd. 112 Less: 15.36 11.54 3.82 33.10 Depreciation increased Depreciation/ because machines always Amortisation depreciation by some percent in every month Net Block 72.73 23.32 49.41 211.88 Capital Work 0 27.97 -27.69 -100 in Progress Increased Capital work in progress decreased due to less profits or less money in the company Investments 14.80 0.40 14.4 36 Investments increased 71.51 48.69 22.82 46.87 Stocks increased in the CURRENT ASSETS , LOAN & ADVANCES Inventories company Sundry 49.95 22.26 27.69 124.39 Sundry debtors increased 1.29 0.70 0.59 84.29 Cash and bank balance Debtors Cash & Bank Balance Loan and increased in the company 4.16 2.01 2.15 106.97 Advances Loans increased more that a cash and bank balance in the company LESS: CURRENT LIAB. & PROV. Current 52.26 32.71 19.55 59.77 Liabilities Current liability increased due to maximum loan Provisions 0.75 0.17 0.58 341.18 Provisions increased Net Current 73.90 40.78 33.12 81.22 Net current assets Assets Miscellaneous Bata India Pvt. Ltd. increased 0 0 0 0 No change, neutral 113 Expenses not w/0 Total Assets 161.43 92.47 68.96 74.58 Total assets increased in the company Contingnet 0 0 0 0 No change Liabilities Bata India Pvt. Ltd. 114 Horizontal Analysis of Balance Sheet (Liberty) (Current year) (Base year) 2008 2007 ABSOLUTE % (Dec ) (Dec) CHANGE CHANGE (Amt in (Amt in Crores) Crores) 17.04 17.04 0 0 No change Share Capital 0 0 0 0 No change Reserves and 97.78 81.82 15.96 19.14 PARTICULARS COMMENTS SOURCE OF FUNDS Total Share holder's Funds Surplus Reserves and surplus increased due to absolute change in reserves and surplus Secured loans 103.32 104.03 -0.71 -0.68 Secured loans decreased due reduction on loans Unsecured 15.06 22.02 -6.96 -31.60 loans Unsecured loans decreased due to less loans Total Debt 118.38 126.05 -7.67 -6.08 Total debts decreased Total 233.20 224.92 8.29 3.68 Total liabilities increased Liabilities due to maximum loan APPLICATION OF FUNDS Gross Block 126.06 110.55 15.51 14.03 Gross block increased Less: 40.61 35.55 5.06 14.23 Depreciation increased Depreciation/ due to old machines Amortisation Net Block 85.45 75 10.45 13.93 Net block increased Capital Work 1.55 8.14 -6.59 -80.95 Capital work in progress Bata India Pvt. Ltd. 115 in Progress decreased due to less progress in capital Investments 20.344 17.10 3.24 18.94 Investments increased due to invest CURRENT ASSETS , LOAN & ADVANCES Inventories 76.19 76.17 0.02 0.03 No change in stock Sundry 72.41 72.09 0.32 0.44 Sundry debtors increased 1.20 1.55 -0.35 -22.58 Debtors Cash & Bank Balance Cash and bank balance decreased due to due to max wages Loan and 27.50 29.72 -2.22 -7.46 Advances Loan reduced due to payment of loan LESS: CURRENT LIAB. & PROV. Current 52.47 52.74 -0.27 -0.51 Liabilities Current liabilities decreased due to reduction n loan Provisions 2.28 5.20 -2.92 -56.15 Net Current 125.84 124.66 1.18 0.95 Assets Miscellaneous Provisions decreased Net current assets increased due to stocks 0 0 0 0 233.18 224.90 8.24 3.68 No change Expenses not w/0 Total Assets Total assets increased due to purchase more assets Contingnet Liabilities Bata India Pvt. Ltd. 9.71 10.55 -0.84 -7.96 Contingent liabilities decreased 116 Horizontal Analysis of Profit & Loss Account (Liberty) (Current year) (Base year) 2008 2007 ABSOLUTE % (Dec ) (Dec) CHANGE CHANGE (Amt in (Amt in Crores) Crores) 247.53 257.89 -10.63 -4.01 PARTICULARS COMMENTS INCOME Sales Turnover Sales turnover reduced due to less profits in company Other Income 1.4 5.51 -4.11 -75.59 Other income decreased due to less incomes Stock 1.4 5.51 -4.11 -75.59 Adjustment Stock adjustment decreased due to less stock in the company Total Income -11.79 6.91 -4.85 -70.19 Total income decreased due to whole income reduced EXPENDITURE Raw Material 237.14 270.39 -33.25 -12.30 Expense on raw material decreased due to less production Excise Duty 116.43 131.96 -15.53 -11.77 Excise duty decreased due to less import from abroad Power & Fuel Cost Bata India Pvt. Ltd. 6.16 9.6 -3.44 -35.80 Power and Fuel cost decreased due to less 117 consumption of transports and machines Other 4.39 4.61 -0.22 -4.77 Other manufacturing Manufacturing Expenses decreased due Expenses to less manufacturing in the company Employs Cost 20.55 22.28 -1.73 -7.76 Employs cost reduced Selling and 51.4 56.8 -5.4 -9.50 Selling and Administration Administration Expenses reduced by - Expenses Miscellaneous 9.50% 5.19 1.06 4.13 389.62 Expenses Miscellaneous Expenses increased due to increase in other expenses Less: 0 0 0 0 26.43 36.33 -9.9 -27.25 No change Preoperative Expenditure Capitalized Profit before Profit before interest, interest, depreciation and tax depreciation & decreased due to less tax profits in the company Interest & 12.56 13.35 -0.79 -5.92 Interest and Financial Financial charges are decreased due Charges to less interest on loans and decreased on financial charges Profit Before 13.89 22.98 -9.09 -39.56 Tax Depreciation . profits before tax and deprecation reduced 6.59 6.38 0.21 3.29 Depreciation increased due to machines Profit Before 7.28 16.6 -9.32 -56.1 Profit before tax reduced -0.24 0.64 0.40 62.50 Tax increased in the Tax Tax company Bata India Pvt. Ltd. 118 Profit After 7.52 15.96 -8.44 -0.52 0 0 0 0 32.86 22.9 9.96 43.50 Appropriation 6 6 0 0 P&L Bal. 34.38 32.86 1.52 4.63 Profit after tax decreased Tax Adjustment No change Below Net Profit P&L Bal. P&L balance increased brought forward Carried down Equity No change P&L balance carried down increased 0 0 0 0 No change 0 0 0 0 No change 0 0 0 0 No change 0 0 0 0 No change 4.41 9.37 -4.96 -52.93 Dividend Preference Dividend Corporate Dividend Tax Equity Divid (%) EPS EPS decreased due to less earning share in the company Book Valu 71.79 67.38 4.41 6.54 Book value increased due to increment of machines in the company Extraordinary Items+ Bata India Pvt. Ltd. -0.16 2.61 2.45 93.87 Extraordinary items increased by approx 93% 119 Horizontal Analysis of Profit & Loss Account (Lakhani) (Current year) (Base year) 2008 2007 ABSOLUTE % (Dec ) (Dec) CHANGE CHANGE (Amt in (Amt in Crores) Crores) 152.07 44.24 107.83 243.74 PARTICULARS COMMENTS INCOME Sales Turnover Sales turnover increased due to increased profits in company Other Income 0.14 0.25 -0.11 -44 Decreased on other income Stock 5.35 9.24 -3.89 -42.1 Adjustment Stock adjustment decreased due to less stock in the company Total Income 157.56 53.73 103.83 193.24 Total income increased due to increased in total income EXPENDITURE Raw Material 93.51 30.09 63.42 210.77 Raw material expenses increased due to increase in production of goods in the company Excise Duty 5.2 3.37 1.83 179.63 Excise duty increased due to increase in import from abroad Power & Fuel Cost 9.03 3.41 5.62 164.81 Power and Fuel cost increased due to maximum usage of Bata India Pvt. Ltd. 120 transport and machines Other 9.92 3.74 6.18 165.24 Other manufacturing Manufacturing Expenses increased due to Expenses increase in manufacturing of goods Employs Cost 17.73 6.6 11.13 168.60 Employs cost increased Selling and 8.74 3.64 5.1 140.11 Selling and Administration Administration Expenses increased Expenses Miscellaneous 0.19 0.02 0.17 850 Expenses Less: Miscellaneous expenses increased 0 0 0 0 13.23 2.86 10.37 362.59 No change Preoperative Expenditure Capitalized Profit before interest, Profit before interest, depreciation & tax depreciation & increased due to increase tax in profits in the company Interest & 4.81 0.64 4.17 652.56 Interest and financial Financial charges increased due to Charges increase in interest on loans and increased in financial charges Profit Before 8.42 2.22 6.2 279.28 Tax Depreciation Profit before dep. and tax increased 3.83 1.81 2.02 111.6 Depreciation increased due to machines Profit Before 4.59 0.41 4.18 1019.51 Tax Profits before tax increased due to increase in profits in the company Tax 3.4 -4.98 -1.58 -31.73 Tax reduced due to decrease in tax in the company Bata India Pvt. Ltd. 121 Profit After 1.19 5.39 -4.2 -77.92 Tax Profit after tax decreased due to increase in taxes and other charges Adjustment 0 0 0 0 9.25 3.86 5.39 139.64 No change Below Net Profit P&L Bal. brought P&L bal brought forward increased forward Appropriation 0 0 0 0 P&L Bal. 10.44 9.25 1.19 12.86 Carried down Equity No change P&L bal carried down increased 0 0 0 0 No change 0 0 0 0 No change 0 0 0 0 No change 0 0 0 0 No change 0.88 4.01 -3.13 -78.05 Dividend Preference Dividend Corporate Dividend Tax Equity Divid (%) Earning per share EPS decreased due to less Earning share in the company Book Value 46.42 45.59 0.83 11.82 Book value of the company increased due to company’s increment profit Extraordinary 0 0 0 0 1.05 0.51 0.54 105.88 No change Items+ Key Ratio: Debt Equity Ratio Bata India Pvt. Ltd. Debt equity ratio increased due to increase 122 in debt in a company Long Term 0.65 0.09 0.56 622.22 Long term debt equity Debt Equity ratio increased due to Ratio long term loan in the company Current Rtio 1.48 1.24 0.24 19.35 Current ratio increased 2.47 0.74 1.73 233.78 Fixed assets increased due Turnover Ratio: Fixed Assets to increase in buildings and machines Inventory 2.53 0.85 1.68 142.80 Inventory increased due to increased in stock of the company Debtors 4.21 2.2 2.01 91.40 Debtors increased due to increase in loan Interest Cover 1.95 1.64 0.31 18.90 Rate PBIDTM(%) Interest cover rate increased 8.7 6.64 2.24 34.67 Profit before interest, depreciation and tax increased PBITM(%) 6.18 2.37 3.81 160.76 PITM increased PBDTM(%) 5.54 5.02 0.52 10.36 PBDTM increased CPM(%) 3.3 16.27 -12.97 -79.72 CPM decreased APATM(%) 0.78 12.18 -11.4 -93.60 APATM decreased ROCF(%) 7.41 1.19 6.22 522.69 ROCF decreased RONW(%) 1.92 9.19 -7.27 -79.11 RONW decreased Bata India Pvt. Ltd. 123 5. Factors That Will Affect The Organization Demand The demand of products at Bata can be affected by various factors: -Product: Shoes (Men’s and Women) 5.1 Price Of The Commodity If the price of the shoes at Bata increases (decreases), then the demand for the shoes will decrease (increase). This happens because the price of the shoes and its demand are inversely related. It implies that lower the price of the commodity larger is the quantity demanded and higher the price lesser quantity is purchased. For example:- A closed dress category shoe of Bata Style no: 801-6210 New price: Rs 979 Old price: Rs 1300 (http://www.bata.in/catdetail.php?&catItem=11&selId=&action=&techId=&brandId=&size=&price=&art_num ber=&a_page=3&tipslist=) In above example Bata reduce the price of shoe by 25%, it will lead to the increase in demand of that shoe. Because the discount of particular item attract the customer. Bata India Pvt. Ltd. 124 5.2 Price Of Related Goods a) complementary Good: A change in the price of polish and socks will affect the demand of the shoes. If the prices of the polish and socks will decrease(increase) then the demand for the shoes will increase(decrease).Complementary goods are those goods which are complementary to one another in the sense that they are jointly used or consumed together like car and petrol ,leather and polish and gas and gas stoves. For instance if the price of leather shoes increases then the demand for polish will decrease and vise a versa. This happens because the price of the complementary good (socks and polish0 is inversely related to the demand of the shoes. b) Competitive/ Substitute Goods: A change in the price of shoes at Action and lakhani will affect the demand of the dresses at Bata. An increase (decrease) in the price of shoes at Action and Lakhani will increase(decrease) the demand of dresses at Bata. Substitute goods are those goods which satisfy the same type of demand and hence can be used in place of one another. This happens because the price of the substitute good (Shoes at Bata) is directly related to the demand of the dresses at Bata. For instance if the price of lakhani leather shoes increases consumers will prefer buying Bata leather shoes as they will be cheaper therefore the demand for Bata leather shoes will increase. 5.3 Income of The Consumer a) Normal Goods: They are those goods the demand for which increases with increase in income of the consumers and decreases with fall in income. For instance a consumer may increase his demand for clothes ,shoes, accessories etc. if his income increases. Normally an increase(decrease) in the real income of the consumer will increase (decrease) the demand of shoes. This happens because the income of the consumer is directly related to the demand of the shoes. Bata India Pvt. Ltd. 125 b) Inferior Goods: They are those goods the demand for which falls with increase in income of the consumer. For instance if a consumers income increase he would prefer buying shoes from woodland than Bata. In case of the inferior goods, such as shoes of very low cost an increase (decrease) in the real income of the consumer will decrease(increase) the demand of such shoes. See the following chart to understand the consumer expenditure capacity. Per Capita Income Year The Per Capita Income in India was Rs 19040. 2002-2003 The Per Capita Income in India was Rs 20982. 2003-2004 The Per Capita Income in India was Rs 23241. 2004-2005 The Per Capita Income in India was Rs 37490. 2008-2009 ( http://www.tradechakra.com/indian-economy/per-capita-income.html) The above chart show that per capita income in India increase year by year. Since 2002-2003 to 2008-2009 there is a increasment of 50.78%, which is a very good growth in its self. It show the buying power of consumer also increase. Hence the demand of shoes, normal goods and inferior goods also increase. 5.4 Tastes And Preferences: These depend on social customs habits of people fashion general lifestyle of people. For instance if converse shoes are in fashion then consumers will prefer buying that to any other shoe. If there is a favorable (unfavorable) change in the tastes and preferences of the consumer for the particular type of shoes it will lead to an increase (decrease) in the demand of the shoes at Bata. This happens because the taste and preferences of the consumer is directly related to the demand of the shoes. The taste and preference of the consumer can be affected by many factors: a) Advertisements. Bata India Pvt. Ltd. 126 b) Consumer Satisfaction c.) Fashion Trend etc. For example:- According to 2001 census male literacy rate is 86.9% and female literacy rate is 72.9%. Hence more males able to get the job, Bata is a company known for its closed dress wear or formals. So they manufacture more men’s shoes compare to female’s shoes. (http://www.censusindia.gov.in/census_data_2001/India_atglance/literates/aspx.) 5.5 Other Factors a) Size Of Population: Market demand for a commodity depends on the size of the population. Larger the population larger the demand as they will be more consumers . size of population in a way means the number of consumer. Hence, as the size of the population increase(decrease) the demand for the shoes will also increase(decrease). For example:year Population 1981 68,33,29,097 1991 84,63,02,688 2001 1.02,87,37,436 (http://www.censusindia.gov.in/census_Data_2001/India_atglance/variation.aspx) According to the census of last three decade done by government of India, there is a increasment in population. From 1981 to 1991; there is increasment of 20%in population and from 1991 to 2001; there is a increasment of 18%in population . Hence the population increases the demand of the shoes also increases because shoes are the part of daily need of an human being. Bata India Pvt. Ltd. 127 b) Composition Of Population composition of population relates to specifically either or male population from the total population. Composition of population affects demand because the types of goods demanded by different people are different. For example if in a country the composition of working men is large then the demand for leather shoes will be more. Hence, if there will be an increase (decrease) in the female population it will lead to an increase(decrease) in the demand for the shoes. This happens because composition of the population and the demand for the shoes are directly related. c) Distribution of Income: If the distribution of income in a country is unequal there will be more demand for luxury goods and if the distribution of income is evenly distributed then the demand for luxury goods will be less and more demand for necessities. The way the income is distributed in the economy also affects the demand of the product, which in our case is the shoes at Bata. If the income will be distributed equally (unequally) amongst all the sections of the society then demand for the shoes will increase (decrease). Bata India Pvt. Ltd. 128 6. Factors That Will Affect The Organization Supply The supply of the product at Bata can be affected by various factors: Product: Shoes (Men’s and Women’s) 6.1 Price Of The Commodity If the price of the shoes at Bata increases (decrease), then the supply for the shoes will also increase (decrease). This happens because the price of the shoes and its supply are directly related. Given other things larger quantity will be supplied at a higher price and smaller quantity at a lower price. This will be because higher the price given per unit cost of production higher is the per unit profit .The higher profit would motivate the suppliers to supply more in order to earn more profits. 6.2 Prices Of Factor Inputs This relates to the cost of production. An increase (decrease) in one input of production will cause a consequent increase (decrease) in the cost of production of that commodity which will lead to a decrease (increase) in the supply of that product. For e.g.:- Raw material, Transportation cost, etc. So, an increase (decrease) in the price of raw material like leather and fabric will cause a consequent increase (decrease) in the cost of production of the dresses which will lead to a decrease (increase) in the supply of dresses. Bata India Pvt. Ltd. 129 This happens because the price of factor input is inversely related to the supply of the product. 6.3 Price Of Related Goods a) Complementary Goods: A change in the price of polish and socks will affect the supply of the shoes. If the prices of the polish and socks will decrease (increase) there will be a decrease (increase) in the supply of the shoes too because this will lead to a decrease (increase) in the profit margins of the supplier. This happens because the price of the complementary goods ( socks and polish) is directly related to the supply of the shoes. b) Competitive/ Substitute Goods: A change in the price of the shoes at “Action” and “Liberty” will affect the supply of the shoes at Bata. An increase (decrease) in the prices of shoes at “Action” and “Liberty” will decrease (increase) the supply of the shoes at “Bata” because this change in the price will tempt the suppliers to divert their available recourse to the production of the substitute good i.e the shoes at “Action” and “Liberty”. This happens because the price of the substitute goods ( shoes at Action) is inversely related to the supply of the dresses at Bata. Bata India Pvt. Ltd. 130 6.4 State Of Technology The supply of a commodity depends upon the state of technology. Over-time if there is an increase (decrease) in the infrastructure and the technology i.e the technology has become more advanced it result in low-production cost ( high production cost) and hence will increase (decrease) the supply of the shoes. For eg:-Better Machinery, up-to-date infrastructure, etc. This happens because the state of technology is directly related to the supply of the shoes. For instance new machines are invented to the Bata factory then the supply would increase and there is a chance of the profits increasing. 6.5 Expected Future Price If the future price of the shoes at Bata are going to decrease (increase) it will increase ( decrease) the current supply of the shoes at Bata because in the future the profit margins of the supplier will decrease (increase). For instance if the suppliers of Bata know that the demand for leather shoes will increase next year then they will produce less this year in order to earn more profits next year so the supply of leather shoes will increase next year. This happens because the expected future price is inversely related to the supply of the shoes. 6.6 Number OF Firms Producing That Product If the number of firms producing increase (decrease) then Bata will get more (less) competition from other firm and hence the supply of Bata will increase (decrease). This happens because the number of the firms products a product is directly related to the supply of shoes at Bata. For instance if Bata is the only producer of leather shoes then they will restrict their supply in order to earn more profits and if they have competition then there supply would be more. Bata India Pvt. Ltd. 131 6.7 Goals OF the Firm The supply of a commodity depends upon the goals of firms producing that commodity. So, the supply of shoes at Bata depends upon the goals of Bata. Mostly all firms sell their products such that they attain maximum profits. But at times some products are supplied not to attain more profit but because they are a source of status and prestige for the company in the society. For example if the goal of Bata is to earn maximum profits they would supply more in order to earn more profits. 6.8 Taxation Policy Imposition of heavy (less) taxes on a commodity decreases (increases) its supply. So, if the government increases (decreases) the taxes on the production of shoes it will lead to a decrease (increase) in the supply of the dresses. Also, tax concession would help in stimulating the supply of shoes at Bata. Foe e.g.:- a) Tax deduction for workers in the industry. b) Exemption from consumption tax ( sales tax or V.A.T), etc This happens because the taxes and the supply of the dresses are inversely related to each other. If Heavy taxes are imposed on Bata then there supply would be less but if the government spends money on supplying Bata machines etc then there supply would increase. Recent Policy Initiatives Specific Industry Associations viz. Council for Leather Exports, Central Leather Research Institute, Footwear Design and Development Institute declares various schemes on an ongoing basis to promotes Specific activities viz. Export promotion, Training Design Inputs , etc. The States Governments of Himanchal Pradesh, Uttaranchal, Jammu and Kashmir and Assam are promoting manufacturing by offering Tax holiday for a period of ten years on full Excise duty and Income Tax and a subsidy in sales Tax, Land/ Building and Plant/ Machinery. Bata India Pvt. Ltd. 132 6.9 Tastes and Preferences If there is a favorable (unfavorable) change in the tastes and preference of the consumer for the shoes it will lead to an increase (decrease) in the supply of the shoes at Bata. This happens because the taste and preference of the consumer is directly related to the supply of the shoes. The taste and preference of the consumer can be affected by many factors: a) Advertisements. b) Consumer satisfaction, etc. 6.10 Natural Factors a) Size of Population Size of population in a way means the number of consumer. Hence, as the size of the population increases (decreases) the supply for the shoes will also increase (decrease) This happens because the size of the population and the supply for the shoes are directly related. b) Composition of Population Composition of population relates to specifically either female or male population from the total population. Hence, if there will be an increase (decrease) in the female population it will lead to an increase (decrease) in the supply for the shoes. This happens because composition of the population and supply for the shoesare directly related. Bata India Pvt. Ltd. 133 6.11 Availability Of Labour there are times when labour has conflicts with the management, within themselves, they might go on strike or even leave jobs for some reason, which effects work and hence reduces productivity. Due to such reasons of scarcity of labour, supply gets affected. 6.12 Transpotation Cost As the transportation costs are to be beared by the supplier, his costs increase with the increase in transportation costs. Hence, the supplier is not willing to supply at increased costs. This is another factor that leads to decreased supply of Bata shoes. 6.13 Demand As the demand for Bata shoes decreases or increases, the supply also decreases or increases respectively. When the consumer demands increase, the supplier needs to provide more products to fulfill the demand. When the consumer does not need a particular product, then there is no use of the supply as it will not sell. Hence, demand of Bata shoes is one of the major reasons affecting its supply. Bata India Pvt. Ltd. 134 7. Implication of Fiscal Policy Fiscal policy, also known as Keynesian economics proposed by British economist john Maynard Keynes. The theory basically states that government can influence macroeconomic productivity levels by increasing or decreasing tax levels and public spending. There are two main instruments of fiscal policy: 1)Government spending 2) Taxation The changes in both have impact on following variables in the economy: Aggregate demand Level of economic activity To counter the negative fallout of global slowdown of Indian economy, government responded by providing three focused fiscal stimulus packages in form of tax relief and increased expenditure on public projects along with RBI taking a number of monetary easing and liquidity enhancing measures. Government Spending INFRASTRUCTURE: According to government budget 2009-2010, infrastructural development will be given a big boost. IIFCL (INFRASTRUCTURE FINANCE CO.) will evolve a takeout financing scheme in consultation with banks to facilitate incremental lending to the infrastructure sector. A new scheme, Rajiv Awas Yojna will be introduced with the aim to make the country slum free in next 5 years. Bata India Pvt. Ltd. 135 Footwear industry plans to raise fund from domestic and overseas economic sectors in form of joint venture, association, establishment of shareholding companies, issuance of shares and bonds in stock market. Footwear industrial parks will be built, encompassing good infrastructure conditions and environmental treatment facilities, in a bid to draw and facilitate investment in footwear industry. Typical Project Profiles Of Footwear Industry PROJECT COST(in millions) COST(in Euros) Leather Shoes 50.00 0.898 Polymer shoes 152.00 2.732 Leather shoe uppers 35.00 1.438 Finished Leather Shoes 420.00 7.551 Employment: Although India’s share in global economy is low, however being a labourintensive industry, its contribution to employment is significant. In recent study, it was highlighted that the total employment in footwear sector would amount to 2.5 million ( 30%of which are women). Footwear industry provides employment to uneducated population-40% of employment is represented by unskilled workers doing table work operation in assembly line. The footwear industry has potential to provide employment across all sections of the economy. The estimated employment potential of footwear industry is to provide 3 lakh jobs in next 3 years. Interest Payments: Due to fiscal consolidation in last four years, interest payments as percentage of total revenue receipts (net) of central government has shown a significant Bata India Pvt. Ltd. 136 improvement. According to the budget estimation 2009-10 it is estimated as 36.7% from 36.7% in 2008-09. The 2% interest subvention scheme provided by Indian government for certain labour intensive sectors, has been extended from september30, 2009 to march31,2010 which includes footwear sector of the industry. This will facilitate reduced interest rate @BPLR minus 4.5% for leather footwear sector on pre-shipment and post-shipment rupee export credit. Transfer Of Payments: are the form of government spending .It is defined as redistribution of income in market system. Eg:-for welfare(financial aid),social security and government subsidies for certain business(firms).The boost the footwear industry the Indian federal government has earmarked a Rs.4.5 billion Grant to be made available to the industry over a span of 5years but that’s not without any string. The fund availability is conditional upon the sector’s attracting an annual investment of 2.2 trillion. Subsidies: Government plan to spend Rs.1, 11,276 crore (us $23.03 bn.) on providing subsidies in budget 2009-2010. There are various subsidies provided by Indian government to boost footwear industry in India. The lowering of value addition norms under DFRC scheme from 33% to 25%, would benefit the exporters of leather goods including leather footwear. Funding is available to enable tanners to modernise manufacturing facilities in footwear sector. Machinery also benefits from duty free/concessional import regulation. There is concessional rate of interest on export credits to mitigate the effects of rupee appreciation which has led to tightening of credit. On the smaller scale, there is a scheme known as “support to rural artisans scheme, marketing and technical support for traditional and ethnic Indian footwear products such a mojpuri, jooti and kohlapuri is being provided. Government also provided support in terms of improved infrastructure .Duty free import of raw material (namely raw skins, hides etc...) Bata India Pvt. Ltd. 137 Export Growth: Exports can become engine of growth for the entire economy as it develops. India is largest producer footwear producer after China. It comprises 42.44% export of footwear. In this view to boost exports Indian government has taken various measures: Adjustment assistance scheme to provide enhanced exports credit and guarantee corporation (ECGC) cover at 95% to badly hit sectors extended up to march 2010. Interest subvention of 2% on preshipment credit for 7 employment oriented export sectors extended beyond the current deadline of september30, 2009 to march31, 2010. To facilitate flow of credit at reasonable rate, Rs.4000crore provided as special fund out of rural infrastructure development fund to small industry development of India, This will incentivise banks and state finance corporation to lend to micro and small enterprises by refinancing 50% of incremental lending to MSE’s during current financial year. Public Debt: Due to the slowdown in the economy in few last years government raised its borrowings. Footwear industry shall raise funds from domestic and overseas economic sectors in form of shares and bonds in the stock market. FDI (Foreign Direct Investment): Liberalizing FDI was another important part of India’s reform, driven by belief that this would increase total volume of investment in Indian economy. A list of investment projects will be prepared in bid to call for investors at home and abroad encouraging the involvement of domestic foreign economic sector in investing in footwear industry. Excise Duties: According to the government policies in India, excise duties and many other miscellaneous taxes are not levied on the apparel products, but they are categorized as restricted imports. Bata India Pvt. Ltd. 138 Export Promotion Capital Goods (EPCG) Scheme: The EPCG scheme is provided for those export companies and traders who inform the Government of India about the type and value of capital goods being imported by them and the exports they expect to produce using those imports. The Government of India provides a license to the exporters allowing them to import capital goods either duty free or at very low rates of duty, on the basis of the export commitment made at the time of import of goods. Bata India Pvt. Ltd. 139 8. Implication Of Monetary Policy The Indian economy has been developing at a considerable growth rate since independence, but it has never been able to achieve the targets set up. In the first quarter of the year 2009-10, the Indian economy was growing at a rate of 6.1%, which is higher than that of 5.8% in the fourth quarter of the financial year 2008-09, but lowers than 7.8% in the first quarter of the year 2008-09. The year-on-year (y-o-y) deceleration in growth was broad-based covering all the three major sectors, viz., agriculture, industry and services. Real GDP Growth (%) Financial Year Sector 2007-08 2008-09 Quarterly Growth Rates (y-o-y) 2008-09 2009-10 Q1 Q4 Q1 Agriculture 4.9 1.6 3.0 2.7 2.4 Industry 7.4 2.6 5.1 - 0.5 4.2 Services 10.8 9.4 10.0 8.4 7.7 Overall GDP 9.0 6.7 7.8 5.8 6.1 Source: Central Statistical Organization (CSO) In the Indian economy, clear signs of revival from recession and growth of the industrial sector have been seen in the recent months. The index of industrial production (IIP) showed an increase by approximately 5.8% during April-August 2009 as compared with a growth of 4.8% in the corresponding period of the previous year. While the basic, intermediate and consumer durable goods sectors (that includes the apparel industry) witnessed higher growth, the performance of the capital goods and consumer non-durable sectors was relatively modest. The core infrastructure sector experienced a growth of 4.8% during AprilAugust 2009, as compared to 3.3% in the corresponding period of the previous year. The leading indicators of industrial production, both quantitative and qualitative, also point to revival of industrial activity in the months ahead. Bata India Pvt. Ltd. 140 The results of the Industrial Outlook Survey done by the Reserve Bank of India that tracks the business expectations for the current quarter and the business outlook for the following quarter, conducted in July-August 2009 showed a turnaround in the business sentiment. The assessment for the second quarter of 2009-10 showed continuing upturn with a 7.8% increase in the Business Expectations Index (BEI) over the previous quarter. Also considerable improvement was shown in key indicators such as production, order books and capacity utilization. The financing conditions have also become better. Inflation that is measured by year-on-year variations in the wholesale price index (WPI), remained negative during June-August 2009 due to the base effect, but returned to a positive figure in September 2009. Inflation based on the CPI for industrial workers (IW) and urban non-manual employees (UNME) has also witnessed a one-time step-up reflecting significant upward revision in imputed prices of rent-free houses emanating from the Sixth Pay Commission Award. The Central Government has already completed net market borrowing of Rs. 3,19,911 crore (as much as 80.4 per cent of the budget estimate) through dated securities during 2009-10 (up to October 26, 2009). Contribution of Footwear industry in National Income: Footwear industry has major contribution in country’s national income. The sector is pride of India’s leather industry and ranks second in the world, next to China. Global trade in leather footwear is US$30 Billion and non leather is US$ 18 Billion. The footwear industry has made a strong contribution to Indian economy. India’s share in global trade remains low, however being labour-intensive industry; It has a strong contribution in employment. The sector provides 2.5million employment (of which 30% women).By reduction in unemployment the growth of economy increases and hence per capita income increases which lead to higher standard of living. In total national income of the economy increases FDI (Foreign Direct Investment): play an important role in increasing national income. As India is developing economy it has an attractive profit making opportunities for the foreign investors. Because of its production strength it attracts more international players Bata India Pvt. Ltd. 141 and also duty free or concessional imports and reduction in excise duty help in increasing FDI. Pre- and Post-Shipment Financing: Pre-shipment financing is provided by the Reserve Bank of India to Indian exporters through commercial banks for purchasing raw material, packaging material and other required material by presenting a confirmed order or letter of credit. Also RBI provides post-shipment financing through commercial banks at preferential rates to Indian exporters presenting export documents. These programs make a financial contribution to Indian firms to the extent of the difference between benchmark short-term interest rates and the preferential interest rates. Ban Credit: Non-food credit by scheduled commercial banks decreased considerably, with the growth rate (y-o-y) falling to 11.2% as on October 9, 2009 from 29.4% in the corresponding period of the previous year. On a financial year basis (up to October 9, 2009) too, the growth in scheduled commercial banks’ non-food credit at 4.3% is drastically lower than the growth of 10.5% in the corresponding period of the previous year. The various factors that have contributed to the slowdown in non-food bank credit are as follows: 1. Overall credit demand from the manufacturing sector slowed down reflecting a decrease in commodity prices and drawdown of inventories. 2. Corporate were able to access non-bank domestic sources of funds and external financing – which had almost dried up during the crisis – at lower costs. 3. Oil marketing companies reduced their borrowings from the banking sector as oil prices moderated. 4. A significant amount of bank finance has gone to the corporate sector through banks’ investment in units of mutual funds. 5. Banks have also reined in credit to the retail sector due to the perceived increased risk on account of the general slowdown. This credit cutback was more pronounced in the case of foreign banks and private banks. Bata India Pvt. Ltd. 142 Interest Rates: In response to the crisis, the Reserve Bank has effected a substantial reduction in policy rates beginning October 2008: the repo rate by 425 basis points and the reverse repo rate by 275 basis points. The CRR was also reduced by 400 basis points of NDTL of banks. Monetary Easing by the Reserve Bank since October 2008 Item Early Reduction(basis points) October October 2008 2009 Repo Rate 9.00 4.75 425 Reverse Repo Rate 6.00 3.25 275 9.00 5.00 400 Cash Reserve Ratio (% NDTL) Taking cues from the reduction in the Reserve Bank’s policy rates and easy liquidity conditions, all public sector banks and most private sector banks have reduced their deposit and lending rates. (http://rbi.org.in/scripts/NotificationUser.aspx?Id=5326&Mode=0) Bata India Pvt. Ltd. 143 9. SWOT Analysis Of Bata Strengths Targeting all income segments. Footwear for the entire family. Nationwide retail network. Brand Image. Good quality at low or reasonable price. Shoes available are in varied quality and price. The brand ‘Bata’ is closely identified with footwear by consumers. An extensive retail network of owned and franchisee stores enables the Company to reach out to consumers across the length and breadth of the country. The Company’s own tanneries located in Batanagar and Mokamehghat ensures uninterrupted supply of raw materials. Six manufacturing locations enable the Company to schedule production to meet demand for a large number and varied categories of footwear. Being a part of the Bata Shoe Organization gives the Company access to new designs, brands and production technologies. The brand .Bata. is closely identified with footwear by consumers An extensive retail network of owned and franchisee stores enables the Company to reach out to consumers across the length and breadth of the country The Company’s own tanneries located in Batanagar and Mokamehghat ensures uninterrupted supply of raw materials Six manufacturing locations enable the Company to schedule production to meet demand for a large number and varied categories of footwear Being a part of the Bata Shoe Organization gives the Company access to new designs, brands and Bata India Pvt. Ltd. 144 production technologies. Financial strength 1. Total income of Bata increases in 2008 by 6.57% 2. Profit margin of Bata increases in 2008 by 19%. So, that company have more money and they can use it for their expansion plans. 3. Total assets of company increase in year 2008, by 8.14% 4. Total share fund increase in year 2008, by 15.82% Weaknesses No continuity of leadership. No proper planning regarding Advertisement No variety in Fashionable shoes. Lack of variety in sports shoes. Lack of futuristic approach. Lack of variety in sports shoes. The Company has a large labour force resulting in high employee costs The Company has been in existence for more than seven decades and faces a challenge in switching to new production technologies The Company has a large labour force resulting in high employee costs The Company has been in existence for more than seven decades and faces a challenge in switching to new production technologies Financial weaknesses 1. Power and fuel cost increased by 9.63% in year 2008, which will effect the profit margins. 2. Company bank balance goes down in year 2008 by 19% Opportunities Great market channels. Exchanging or expending in offer rural market. Bata India Pvt. Ltd. 145 Innovative Products New mediums for advertisements Acquired, Partnership with small players Entering new segments of Markets Rising potential in the domestic market Growing fashion consciousness globally The Indian footwear retail market is expected to grow at a CAGR of over 20% for the period spanning from 2008 to 2011, and also expected to comprise of 60% of the total leather exports by 2011.(india-reports,2008) Footwear retailing in India remain focused on men’s shoes, there exists plethora opportunities in the exclusive ladies and kids footwear segments with no organized retailing chain having a national presence in either of these categories.(indiareports,2008) For leather industry, duty free entitlements of import trimmings, embellishments and footwear components is increased to 3% of FOB value of exports, for leather sector, duty free import increased to 5% of FOB value of exports and the machinery and equipment for effluent treatment plants are to exempt of custom duty.(Indian industry, 2009) India is a very large market and offers good demand potential for footwear which is an item of mass consumption. Low per-capita footwear consumption in India provides opportunity to the Company which has large production capacity spread over six locations The Company sees potential in leveraging the .Bata. brand for marketing other merchandise consumer products. (http://www.indianindustry.com/trade-information/foreign-tradepolicyhighlights.html) Threats Too many players will dilute the market & the profit margin goes down because of Low priced Chinese or local products. Bata India Pvt. Ltd. 146 The Company faces competition from the unorganized market which is able to sell footwear at low cost due to lower overheads and manufacturing costs. Opening of the Indian market to imports has resulted in the Company facing competition from cheap imports. Due to growing inflation, there has been an increase in the cost of raw materials and transportation The decreasing fashion cycle is one of the major threats as new collections need to be brought in very frequent The Company faces competition from the unorganized market which is able to sell footwear at low cost due to lower overheads and manufacturing costs Opening of the Indian market to imports has resulted in the Company facing competition from cheap imports Recent merger between Adidas and Reebok. 10. Recommendations The recommendation for the company to maintain the consistency, good will, brand image, uniqueness and cost effective methods for production are as follows:- In Asia luxury spending was expected to grow between 6 and 7 percent in the year starting July, compared to a decline of up to 15 percent in the United States and a drop of up to 5 percent in Europe. Bata retailers need to educate potential customers about their wares, especially during this crisis, when they're more reluctant to buy on the spur of the moment. Bata sales teams should appeal to customers' emotions, online or at the store, to succeed. Bata should adopt recycling of textiles. It is cost effective process and company input cost will be reduced. It should inculcate “Lean Sigma” adopting the latest technology of waste reduction and improving efficiency level. This is cost cutting and time saving adoption. Bata India Pvt. Ltd. 147 Strengthening the pre production processes as apart of over all supply chain to enhance the operational efficiency. Many industries are adopting the strategy of going green highlighting their initiatives and future plans towards a cleaner environment. Though the initial investment in setting up a green factory is about 30%-40% higher, the investment pays back in couple of years through various savings achieved as a part of this initiatives. Bata should also adopt this as it will enhance its brand image. Bata should also show some advertisement on T.V, newspaper so that more people aware about it. Indian market is dominated by men’s footwear i.e. about 58% so there huge untapped sector of women and children footwear in India thus Bata should try tapping these sector. Worldwide epidemiological studies shows that the employment in the shoe industry is associated with high risk of cancer so Burberry should keep records of his workers health.(joem,2009). (http://www.ijoem.com/temp/IndianJOccupEnvironMed917-5037142_135931.pdf) 11. Conclusion Over a period of time Bata has improved its distribution network, generated skilled manpower, integrated itself backward as well as forward, resolved problem with trade unions, lower down the input cost, create good physical infrastructure and technological advancement. It is continuously increasing its distribution network and cutting cost through manpower reduction. Looking net sale/volume and profit before tax increases significantly from 2008 to 2009. Now, Bata has no more considered as only a production company which produces footwear. They now created an image of fashion driving, market oriented manufacturer. Positioning Bata India Pvt. Ltd. 148 has been done in very passionate way to change a stable image of company over a period of time. They back their campaign through several TVC’s, print media and word of mouth. Collaboration with several big players is giving an edge to Bata India Limited. Bata successfully changes its image and repositioned itself. Bata India Pvt. Ltd. 149 12. Competitor Profile 12.1 Lakhani -Company Profile Business Type: Footwear Main Market: India Chairman and M.D: Mr. Parmeshwar Payal Lakhani Market Value: 460 cr Company Address: B-106, Sector-2, Noida, Uttar Pradesh . Tel. no: 91-0120-4015810 Fax: 91 - 129 - 2232790 Site URL: www.lakhaniarmaan.com Employees: 2702 Share Price: company only listed on BSE Current price - 34.80 Rs 12.1(a) Share Holding Pattern: Promoter – 66.20% Non-Promoter-25.32% Public Holding- 7.42% M.F & Other- 1.06% Bata India Pvt. Ltd. 150 1.06% 7.42% Promoter 25.32% Non-promoter Public Holding M.F & Other 66.20% 12.1(b) History: Originally incorporated as Lakbros Shoe Company Pvt Ltd in Dec.'81, Lakhani was converted into a deemed public limited company on 14 Jul.'89 and its name was changed to Lakhani India in Sep.'94. Promoted by K C Lakhani, P D Lakhani and J C Arora, LIL belongs to the Lakhani group. It manufactures and markets shoes and chappals. In Jun.'95, LIL came out with a public issue of 38.4 lac equity shares at a premium of Rs 110, aggregating Rs 46.08 cr, to part-finance the expansion-cum-modernization of its non-leather shoe unit from 30 lac to 61.65 lac pairs pa at Faridabad, Haryana, and its diversification into the manufacture of 3 lac pairs of leather shoes. The other companies in the Lakhani group are Lakhani Rubber Udyog, Lakhani Footwear, Lakhani Shoe Company, Lakhani Shoes, etc. The group is the largest manufacturer of beach slippers and the second-largest manufacturer of canvas shoes in India. It exports goods to UK, Sweden, Italy, France, Germany, Ireland and Western Australia. The manufacturing units of LIL are at Bhiwadi( Rajasthan); Noida(Uttar pradesh) ; Faridabad(Haryana); and Indore (Madhya Pradesh). The Lakhani group is one of the largest suppliers of rubber components to automobile manufacturers like Maruti, TELCO, Escorts, Sona Steering, DCM Daewoo. (http://www.sharekhan.com/MarketCorner/DetailedReport.aspx?Type=COMP-HIS&SSKICode=LAKHANI) Bata India Pvt. Ltd. 151 12.1(c) Human Recourse Policy: Employer relations continued to remain cordial during the training and development of employees continue to be an area of importance. The devotion and commitment of our employees has enabled the company fulfill its target and deadlines in time. The total number of employs in the company as on 31st march,2008 was 2702. The company very well understand its obligations toward environment, its human resource and society in general. It has made significant efforts in the field of environment protection by implementing statutory and regulatory requirements. Moreover, the company believes in safe work practices and show utmost concern towards its employs health and safety. The company is well prepared to meet the future challenges of the market. It has firm plans to double up its manufacturing capacity in near future. For that company is setting up a state-of-theart plant in Faridabad itself. (http://www.indiainfoline.com/market/company) (http://www.lakhaniarmaan.com/social.htm) 12.1(d) Product Profile: PRODUCT RANGE- Retail Price: Rs. 1150 Bata India Pvt. Ltd. 152 12.2 Liberty-Company Profile Business Type: Footwear Main Market: India CEO: Mr. Adesh Gupta Market Cap: 180 cr Company Address: A-40, II Flore, Phase-II, . Naraina Industrial Area, . Near Batra Banquat Hall, N.D-110025 Tel. no: 91-11-41410592 Employees: 1332 Share Price: Company listed on BSE as well as on NSE Current price- BSE- 106 Rs ( As per the closing on 22/1/2010) NSE-106.90 Rs (As per the closing on 22/1/2010) 52 week High- 113.45Rs 52 week low- 35Rs 12.2(a) Share Holding Pattern: Promoters-61.94% Public-32.58% Non-Promoter Corporate Holding-5.16% Mutual Fund-0.32% Bata India Pvt. Ltd. 153 0.32% 5.16% Promoters 32.58% Public Non-Promoter 61.94% M.F 12.2(b) History: Liberty Shoes (LSL), incorporated in Sep.'86 as a public limited company, engaged in the business of manufacturing and selling leather & non-leather shoes, leather shoe uppers and leather garments. In 1991, LSL set up a joint venture to manufacture shoes, and in Dec 1995 it was discontinued. facility for 6 lac pairs of leather shoes and 9.6 lac pairs of non-leather shoes. The company has commenced commercial production of non-leather shoes in Dec.'93. LSL has well established network of retail stores, and markets it's products under the well known brand 'Liberty'. LSL serves all major segments of the footwear market, it's product range consists of Gliders and Coolers range of footwears under Casual Footwear segment, Geo Sport in Sports shoes. Liberty Shoes Ltd. is the only Indian company that is among the top 5 manufacturers of leather footwear in the world with a turnover exceeding U.S. $100 million. With 50 years of excellence, today Liberty produces footwear for the entire family and is a trusted name across the world. In the domestic market it is one of the most admired footwear brands and holds the largest market share for leather footwear. (http://www.sharekhan.com/MarketCorner/DetailedReport.aspx?Type=COMP-HIS&SSKICode=LIBERTYS) Bata India Pvt. Ltd. 154 12.2(c) Human Resource Policy: Company has been consisted in following the prudent poloci respect of H.R and industrial relations by duly complain the all the applicable industrial law and code of conduct as laid for the protection of the workers. The company believes in harmonious and cordial relationship with its work force and as such, always committed to provide generous support to its workforce. Proway for a better work environment and the attainment of large bro objectives in efficient and specialized manner, As on 31st march,2009,the company employ strength is 1332. Company also have a special charity fund for providing financial assistance to families who suffer the tragedy of losing their sole earning member. It's this sense of social commitment that inspired us to set up the Sanjay Charitable Hospital at Karnal and join the Nation in felicitating the winners of the Republic Day Bravery Awards with a special gift of free footwear. Ecological awareness also happens to be uppermost on our minds. A testament to this fact is the importance we have accorded to making all our Humantech Centers environment-friendly with extensive green covers and the manner in which we have nurtured and maintained the Karnal Roundabout which has become the city's “Green Showpiece”. (http://www.libertyshoes.com/social_liberty_shoes.asp) (http://www.indiainfoline.com/market/company) 12.2(d) Award Won: "A1+"(meaning highest safety) rating for its commercial paper in 1999-2000 by ICRA. 12.2(e) Product Profile: Bata India Pvt. Ltd. Brand : Fortune Article : 2031-21 Color : BLACK MRP : Rs.1099 155 13. Minimum Wages Chart By The State Governments: MINIMUM WAGES IN DELHI (FEB 1,2009) S.N O 1 2 scheduled employment Pattern Making, Cutting Lasting, Bottoming, Finishing UNSKILLED Basic minim um wages V.D. A. 141.00 141.00 CATEGORY OF WORKERS SEMI- SKILLED SKILLED Total minim um wages Basic minim um wages V.D. A. Total minimum wages 10.0 Total Basic V.D. minim minim A. um um wages wages (RS PER DAY) 151.00 148.00 10.0 158.00 158.00 10.0 168.00 10.0 151.00 158.00 158.00 10.0 168.00 148.00 10.0 MINIMUM WAGES IN HARYANA S.N O CATEGORY OF WORKERS Scheduled employment Unskilled Semiskilled (A) Semi-skilled (B) Skilled (A) Skilled (B) highly skilled 165.69 165.69 167.69 167.69 172.69 172.69 (RS PER DAY) 1 2 Pattern Making, Cutting Lasting, Bottoming, Finishing Bata India Pvt. Ltd. 147.69 147.69 152.6 152.6 157.69 157.69 156 MINIMUM WAGES IN MADYA PRADESH S.N O 1 2 scheduled employment Pattern Making, Cutting Lasting, Bottoming, Finishing UNSKILLED Basic V.D. minim A. um wages CATEGORY OF WORKERS SEMI- SKILLED Total Basic V.D. Total minim minim A. minim um um um wages wages wages (RS PER DAY) SKILLED Basic V.D.A. minim um wages Total minimum wages 47.38 54.1 101.49 43.15 54.1 97.26 39.00 54.11 93.11 47.38 54.1 101.49 43.15 54.1 97.26 39.00 54.11 93.11 MINIMUM WAGES IN UTTAR PRADESH S.N O 1 2 scheduled employment Pattern Making, Cutting Lasting, Bottoming, Finishing CATEGORY OF WORKERS UNSKILLED SEMI- SKILLED Basic V.D.A. Total Basic V.D.A Total minimum minimu minimu . minimu wages m m m wages wages wages (RS PER DAY) SKILLED Basic V.D.A Total minimu . minimu m m wages wages 129.73 29.69 159.42 137.50 33.85 171.35 171.35 37.54 201.66 129.73 29.69 159.42 137.50 33.85 171.35 171.35 37.54 201.66 Note:- Re: minimum wages Delhi 2010 The Delhi Cabinet on Monday approved the minimum wages for unskilled, semi-skilled and skilled workers by almost 33 per cent. The new wage structure will also cover clerical and non-technical supervisory workers working on the daily wage system. While the Wages of an unskilled labour has been increased from Rs 163 to Rs 203, the semiskilled labour will now be paid Rs 248 per day instead of the previous wages of Rs 225. “An un-skilled labour will now get Rs 5,272 per month whereas the semi-skilled labour will can take home at least Rs 5,850 per month. A skilled labour is now entitled for minimum wags of Rs 6,448 per month,” a senior Delhi government official said. The non-technical supervisory and clerical staff are also entitled for hiked salaries. Bata India Pvt. Ltd. 157 “A graduate can now earn Rs 7,020 per month while a matriculate can take Rs 6,448 every month,” the official said. Reasons of difference of wages in Delhi and Madhya Pradesh: 1.) Low life style of people. 2.) Availability of cheap labor. 3.) Less consumption of calories per day. 4.) Inflation. Bata India Pvt. Ltd. 158 14. Work place Safety Checklist CODE OF CONDUCT STANDARDS The factory complies with all local regulations relating to health and safety of workers at the workplace. The factory was ensuring adequate lighting, circulation, ventilation, heating/cooling of the workplace. Adequate protection was being provided from fire, accidents, toxic materials, chemical spillage, dangerous machinery parts and electrical risks. The workplace was having clearly marked and adequate exits for emergency evacuation of workers. Evacuation routes were pasted in all work areas. All exits, staircases and sections were having emergency lights. The workplace was having adequate fire alarms accessible from all sections/floors in the factory. The factory had trained an adequate number of workers in using fire extinguishers. per Periodic fire drills were conducted and duly recorded as per law or at least once in six months. The factory was having adequate number of fire extinguishers in all sections/floors. Fire extinguishers were mounted on a wall at a height, where they remained visible and accessible by most workers. The location of fire extinguishers and the area in front of them were marked with diagonal black and yellow lines in the form of a square, indicating that it should always be clear of any obstruction. Workers were being provided appropriate personal protective equipments (PPE) – such a gloves, aprons, masks, goggles, earplugs, headgear and rubber boots. Workers were given necessary training to use the PPE. The factory was providing safe drinking water for all workers with free access to it throughput the day. Bata India Pvt. Ltd. 159 The factory had placed adequately stocked first aid kit on every floor of the workplace. An adequate n number of workers were trained in basic first aid. The factory was having procedures and facilities such as transport/ambulance to deal with serious injuries that require medical treatment outside the factory premises. The workplace was having adequate number of clean toilets/bath-rooms (Segregated by sex) for all workers with running water allowing adequate access to them throughout the day. The canteen was kept clean ensuring general hygiene and comfort for the workers. The factory kept hazardous substances in safe, secure, separate and ventilated areas. There are various terms that come under the head of workplace safety, health and hygiene, which are discussed by showing pictures, stated below: FIRE SAFETY COMPLAINCE Bata India Pvt. Ltd. FIRST AID AND EMERGENCY MEDICAL CARE 160 COMPLIANT TOILETS DRINKING WATER COMPLAINCE FACTORY SIGNS AND SYMBOLS Note:- we visited to one of the shoe manufacturing plant of Bata India Pvt. Ltd. in Faridabad. And find that Bata India Pvt. Ltd. Faridabad plant use all of the above safety code of conduct. Bata India Pvt. Ltd. 161 15. SOCIAL COMPLIANCE CODE OF VENDOR CONDUCT The Code of Vendor Conduct applies to all factories that produce goods for any particular buyer that has certain norms and standards for code of vendor conduct. While buyers recognizes that there are different legal and cultural environments in which factories operate throughout the world, this Code sets forth the basic requirements that all factories must meet in order to do business with these buyers. This Code is based on internationally accepted labor standards, including the International Labour Organization (ILO)’s core conventions and the Universal Declaration of Human Rights. The Code provides the foundation for buyer’s ongoing evaluation of a factory’s employment practices and other social compliance. 1. Compliance With Laws Factories shall operate in full compliance with the laws of their respective countries and with all other applicable laws, rules and regulations. The factory operates in full compliance with all applicable laws, rules and regulations, including those relating to labor, worker health and safety, and the environment. The factory allows the buyers or any of their representatives or agents’ unrestricted access to its facilities and to all relevant records at all times, whether or not notice is provided in advance. Bata India Pvt. Ltd. 162 2. Labor A. Child Labor Factories shall employ only workers who meet the applicable minimum legal age requirement or are at least 15 years of age, whichever is greater. Factories must also comply with all other applicable child labor laws. Factories are encouraged to develop lawful workplace apprenticeship programs for the educational benefit of their workers, provided that all participants meet both buyer’s minimum age standard of 15 and the minimum legal age requirement. Every worker employed by the factory is at least 15 years of age and meets the applicable minimum legal age requirement. If the minimum legal age is higher under local law, the higher age applies. The factory complies with all applicable child labor laws, including those related to hiring, wages, hours worked, overtime and working conditions. The factory encourages and allows eligible workers, especially younger workers, to attend night classes and participate in work-study programs and other governmentsponsored educational programs. The factory maintains official documentation for every worker that verifies the worker’s date of birth. In those countries where official documents are not available to confirm exact date of birth, the factory confirms age using an appropriate and reliable assessment method. Bata India Pvt. Ltd. 163 B. Contract Labor Requirement Factories that recruit or employ foreign contract workers shall ensure that these workers are treated fairly and on an equal basis with its local workers. C. Discrimination Factories shall employ workers on the basis of their ability to do the job, not on the basis of their personal characteristics or beliefs. The factory hires, employs, promotes, terminates, and provides access to training and retirement to workers without regard to race, color, gender, nationality, religion, age, maternity, marital status, indigenous status, social origin, disability, sexual orientation, membership in workers’ organizations including unions, or political affiliation. The factory pays workers wages and provides benefits without regard to race, color, gender, nationality, religion, age, maternity, marital status, indigenous status, social origin, disability, sexual orientation, membership in workers’ organizations including unions, or political affiliation. D. Forced Labor Factories shall not use any prison, indentured or forced labor. The factory does not use involuntary labor of any kind, including prison labor, debt bondage or forced labor by governments. Bata India Pvt. Ltd. 164 E. Freedom of association and the right to collective bargaining Workers are free to join associations of their own choosing. Factories shall not interfere with workers who wish to lawfully and peacefully associate, organize or bargain collectively. The decision whether or not to do so should be made solely by the workers. Workers are free to choose whether or not to lawfully organize and join associations. If freedom of association and/or the right to collective bargaining are restricted by law, workers shall be free to develop parallel means for independent and free association and collective bargaining. The factory does not threaten, penalize, restrict or interfere with workers’ lawful efforts to join associations of their choosing or to bargain collectively. F. Humane treatment Factories shall treat all workers with respect and dignity. Factories shall not use corporal punishment or any other form of physical or psychological coercion. The factory does not engage in or permit physical acts to punish or coerce workers. The factory does not engage in or permit psychological coercion or any other form of non-physical abuse, including threats of violence, sexual harassment, screaming or other verbal abuse. Bata India Pvt. Ltd. 165 G. Wages and benefits Factories shall pay wages and overtime premiums in compliance with all applicable laws. Workers shall be paid at least the minimum legal wage or a wage that meets local industry standards, whichever is greater. Factories are encouraged to provide wages and benefits that are sufficient to cover workers’ basic needs and some discretionary income. Workers are paid at least the minimum legal wage or the local industry standard, whichever is greater. The factory pays overtime and any incentive (or piece) rates that meet all legal requirements or the local industry standard, whichever is greater. Hourly wage rates for overtime must be higher than the rates for the regular work shift. The factory provides paid annual leave and holidays as required by law or which meet the local industry standard, whichever is greater. For each pay period, the factory provides workers an understandable wage statement which includes days worked, wage or piece rate earned per day, hours of overtime at each specified rate, bonuses, allowances and legal or contractual deductions. The factory shall not modify or terminate workers’ contracts for the sole purpose of avoiding the provision of benefits. H. Working hours Factories shall set working hours in compliance with all applicable laws. While it is understood that overtime is often required in garment production, factories shall carry out operations in ways that limit overtime to a level that ensures humane and productive working conditions. Bata India Pvt. Ltd. 166 The factory complies with all applicable laws, regulations and industry standards on working hours. Except in extraordinary business circumstances, the maximum allowable working hours in any week shall be the lesser of a) what is permitted by national law, or b) a regular work week of 48 hours plus overtime hours not in excess of 12 hours. Workers may refuse overtime without any threat of penalty, punishment or dismissal. Workers shall have at least one day off in seven. Note:- Bata as a good brand and to keep it his image in market, follow all the above social compliances. Bata India Pvt. Ltd. 167 16. Recent News Related To Footwear Industry A step for footwear November 6, 2006 Indian Shoe Federation (ISF) has taken a step to create a direct link between manufacturers of components and footwear manufacturers. They had organized a footwear components and accessories exhibition at Rajah Muthiah Hall, Egmore, Chennai. A total of 72 footwear components manufacturers from all over India participated in this exhibition. According to the Council of Leather Export, the footwear industry aims to reach a target of $4 billion, within next five years. There is a huge prospect of employment in the footwear component industry. This will help in enhancing the export opportunity for the footwear industry. (http://www.fibre2fashion.com/news/fashion-news/newsdetails.aspx?news_id=25742) Agra footwear industry facing new challenges April 16, 2009 (India) Arrival of footwear manufacturing units in the infrastructure-rich towns like Noida and Chandigarh as well as slowdown in export orders due to unavailability of credit facilities to the major footwear importers, are the new challenges for Agra footwear industry. This makes footwear units in the town to run at less than 50 percent of their production capacity. Agra footwear industry is already facing a 30 percent decline in export orders due to financial meltdown. First quarter of 2009 has experienced a sharp decline in export orders. Though only a few number of footwear units have come up in Noida and Chandigarh, the Bata India Pvt. Ltd. 168 business of small exporters of Agra is getting affected. So, there is a need to develop a supporting infrastructure for Agra footwear industry. Big exporters of the town are looking for a substantial share in the economic package announced by the Centre for the leather industry, totaling to Rs. 1,300 cr. According to the experts, though Kanpur is known for utility footwear exports and Chennai has the largest share in men’s footwear, the top position in exports of men’s & women’s fashion footwear rests with Agra. Growth rate of Agra footwear industry was 27 percent for the past few years but this drop down in business would make it difficult to maintain that growth rate this year. According to experts, situation will change in the near future, as China faces import restrictions from several countries and cost of footwear manufacturing in the Eastern European Countries is going high. Experts hope that in coming years, bulk buyers will turn to India and country’s share in the world footwear trade will rise, at least to 7 percent from 4 percent. (http://www.fibre2fashion.com/news/daily-textile-industries- news/newsdetails.aspx?news_id=71426) 26th IFC to help Indian footwear industry September 3, 2007 The countdown for the 26th International Footwear Conference (IFC) has begun and this is the first time when India has been given the honour to organize this prestigious event. The three day conference will be organized from August 30 till September 1, 2007 at Chennai and will be inaugurated by Mr G K Pillai, Commerce Secretary, Government of India. Bata India Pvt. Ltd. 169 The IFC will witness participation from 9 major footwear manufacturing countries from Asia and large number of footwear importing countries like US, Spain, Italy etc. It will also have country presentations from Brazil, South Korea and India who will address the relevant topics including design inputs while designing comfort footwear, latest technology in sports footwear and emerging trends in retailing in India. IFC being an important event for the global footwear industry is a major initiative by Council for Leather Exports (CLE) to take a step ahead in boosting India’s footwear production in the world market. The event would also provide interactive forum to the participants to discuss various issues like current trends in footwear production, trade and consumption. The conference would be of immense help to Indian industry - in terms of understanding the changes happening in other footwear producing countries. Speaking on the occasion, Mr. Mukhtarul Amin, Chairman, CLE said, “The conference would be a gateway for Indian footwear manufacturers to know trade and technology practices worldwide especially in Far East nations. This event will also gather opinions from experts and trade analysts on issues concerning leather sector.” With the world trade figure soaring high the global leather and leather products imports has almost doubled to US$ 104 billion in 2005 as against US$ 56 billion in 1992 and out of which footwear alone constitutes 67% of the total leather trade. Figures also show that US being the largest importer has a highest share of 27%, the leather exporters from India are creating space for Indian leather in US markets and strengthening our trade relations. With the current trends of footwear manufacturing are declining in Europe and depression Bata India Pvt. Ltd. 170 in Brazilian industry, the Indian Leather Industry sees an immense potential and growth prospects with new emerging markets in Eastern Europe and Latin America and to cater the same stress is on building capacities, manpower and technology advancement is the main stress. (http://www.fibre2fashion.com/news/fashion-news/newsdetails.aspx?news_id=40328&page=2) Bata India Pvt. Ltd. 171 17. Annexure 16.1 Product Profile of Bata Men`s Wear Variety of products such as: Closed dress Closed casual Sandals Chappals Sports wear Closed dress range starts from 699 to 2699 Closed casual range starts from 399 to 1999 Sandals range starts from 399 to 1899 Chappals range starts from 169-1799 Sports shoes range start from 699-1799 Closed dress Style no. 851-6094 Style no. 854-6003 Bata India Pvt. Ltd. INR 699.00 INR 1699.00 172 Style no: 854-4099 Style no: 854-6074 INR 2299.00 INR 2699.00 (http://www.bata.in/catlist.php?catItem=11) Closed casual Style no: 829-6095 Style no. 891-1240 Bata India Pvt. Ltd. INR 399.00 INR 1899.00 173 Style no. 834-4006 INR 1999.00 . (http://www.bata.in/catlist.php?catItem=21) Sandals Style no. 861-4053 Style no. 861-6226 Style no. 801-4167 Bata India Pvt. Ltd. INR 399.00 INR 699.00 INR 1499.00 174 Style no. 864-6439 INR 1899.00 (http://www.bata.in/catlist.php?catItem=31) Chappals Bata India Pvt. Ltd. Style no. 872-6007 INR 169.00 Style no. 871-4095 INR 249.00 Style no. 874-4036 INR 818.00 175 Style no. 874-6930 INR 1799.00 (http://www.bata.in/catlist.php?catItem=41) Sports wear Style no. 861-9224 INR 699.00 Style no. 839-8134 NR 749.00 Style no. 808-3456 INR 1099.00 Style no. 808-5499 INR 1799.00 (http://www.bata.in/catlist.php?catItem=5) Bata India Pvt. Ltd. 176 Women’s wear Chappals Closed Sandals Chappals Style no. 571-6121 INR 139.00 Style no. 561-5995 INR 499.00 Style no. 673-4061 INR 1199.00 Style no. 674-6051 Bata India Pvt. Ltd. INR 1249.00 177 Closed Style no. 552-7007 Style no. 581-1840 Style no. 581-2796 Style no. 581-2121 INR 299.00 INR 599.00 INR 1199.00 INR 1299.00 ( http://www.bata.in/catlist.php?catItem=22) Bata India Pvt. Ltd. 178 Sandals Style no. 662-1050 Bata India Pvt. Ltd. INR 299.00 Style no. 661-6088 INR 499.00 Style no. 581-2403 INR 999.00 179 16.2 Balance Sheet Of Bata Particulars Dec-2008 Dec-2007 Dec-2006 Dec-2005 Dec-2004 64.26 51.42 Sources of funds Share capital+ 64.26 64.26 64.26 Reserves & Surplus+ 226.89 187.12 147.73 197.21 132.74 Total shareholder Funds 291.15 251.38 211.99 262.47 184.16 Secured loans+ 35.91 45.07 56.1 59.69 112.16 Unsecured loans+ 8.72 6.73 4.43 21.94 12.19 Total Debt 44.63 51.8 60.53 81.63 124.35 Total liabilities 335.78 303.18 272.52 343.1 308.51 Application of funds Gross block+ 349.33 324.88 306.85 363.43 358.1 Less: Accum. Depreciation 232.31 220.96 227.44 231.98 220.04 Net block 117.02 103.92 79.41 131.45 138.06 Capital work in progress 0.86 0.31 0.84 0.47 1.59 Investments+ 17.25 17.25 17.24 4.98 4.85 Bata India Pvt. Ltd. 180 Particulars Dec-2008 Dec-2007 Dec-2006 Dec-2005 Dec2004 262.16 Current Assets, loans & advances Inventories+ 292.23 303.74 276.36 278.76 Sundry Debtors+ 25.89 22.86 21.61 27.94 48.04 Cash and Bank Balance 26.75 32.72 22.34 20.36 14.65 Loans & advances+ 96.75 53.23 42.33 61.24 61.85 194.36 198.4 173.55 163.87 214.2 Provisions+ 54.26 33.65 14.06 36.31 34.6 Net current Assets 193 180.5 175.03 1 88.12 137.9 Miscellaneous Expenses not w/o + 7.65 1.2 18.08 26.11 Total Assets 335.78 303.18 272.52 343.1 308.51 Contingent Liabilites+ 45.28 76.52 119.69 112.5 108.35 Less: Current liab. & Prov. Current Liabilities+ 0 (http://www.sharekhan.com/MarketCorner/CommonGrid.aspx?Type=BA&SSKICode=BATA) Bata India Pvt. Ltd. 181 16.3 Profit & Loss Account Of Bata Particulars Dec-2008 Dec-2007 Dec-2006 Dec-2005 Dec-2004 Sales Turnover+ 1012.33 890.79 794.82 734.24 724.56 Other Income+ 11.2 14 27.58 18.89 4.77 Stock Adjustments+ 10.68 29.27 1.56 18.78 -12.95 Total Income 1012.85 934.06 823.96 771.91 716.38 Raw Materials+ 455.33 437.63 366.34 349.1 378.37 Excise Duty 22.86 23.58 24.45 27.49 30.51 Power & fuel cost 28.22 25.74 24.03 22.65 22.49 Other Manufacturi Expenses+ 29.22 29.74 34.27 34.38 15.98 Employee Cost+ 173.22 181.47 183.21 178.8 183.68 Selling and Administration Expenses+ 184.71 141.73 110.2 100.69 109.64 16.45 16.41 8.09 20.97 14.92 0 INCOME EXPENDITURE Miscellaneous Expenses+ Less: Preoperative Expenditure capitalized 0 0 Profit before Interest, Depreciation & Tax 102.08 77.76 Bata India Pvt. Ltd. 73.37 0 37.83 0 -39.2 182 Particulars Dec-2008 Dec-2007 Dec-2006 Dec-2005 Dec-2004 Interest & Financial charges+ 11.24 10.56 10.57 12.24 11.94 Profit Before Depreciation & tax 90.84 67.2 62.8 25.59 -51.14 Depreciation 19 16.01 13.62 12 12.33 Profit Before Tax 71.84 51.19 49.18 13.59 -63.47 Tax 11.1 3.75 9.03 1.1 -0.72 Profit After Tax 60.74 47.44 40.15 12.49 -62.75 0 Adjustment below Net Profit+ 0 0 0 P & L Balance brought forward 69 40.15 -50.26 Appropriations+ 24.87 18.59 -50.26 P & L Bal. carried down 104.87 69 Equity Dividend 16.07 12.85 40.15 -62.75 0 -50.26 0 0 0 62.75 0 0 0 Preference Dividend 0 0 0 0 0 Corporate Dividend Tax 2.73 2.18 0 0 0 Equity Dividend (%) 25 20 0 0 0 Earning Per Share (Rs) 9.03 7.04 6.25 1.94 0 (http://www.sharekhan.com/MarketCorner/CommonGrid.aspx?Type=PL&SSKICode=BATA) Bata India Pvt. Ltd. 183 16.4 Quarterly Result OF Bata Particulars September-2009 June-2009 March-2009 Sales Turnover 260.68 309 233.6 Other Income 1.33 2.03 1.31 Total Income 262.02 311.03 234.91 Total Expenditure 236.64 276.21 212.06 Operating Profit 25.37 34.82 22.85 Interest 0.8 1.07 1.29 Gross Profit 24.57 33.75 21.56 Depreciation 6.38 6.57 5.33 Tax 5.04 8.83 5.9 Reported Profit After Tax 13.15 18.35 10.33 Extra-Ordinary Item 0 0 0 Adjusted Profit After 13.15 Extra- 0rdinary Item 18.35 10.33 EPS (units curr.) 2.05 2.86 1.61 Book value (unit curr.) 0 0 0 Dividend (%) 0 0 0 Equity 64.26 64.26 64.26 Bata India Pvt. Ltd. 184 Particulars September-2009 June-2009 March-2009 PBIDTM (%) 9.73224 11.2686 9.78168 PBDTM (%) 9.42535 10.9223 9.22945 PATM (%) 5.0445 5.93851 4.42209 (http://www.sharekhan.com/MarketCorner/CommonGrid.aspx?Type=QU&SSKICode=BATA) Bata India Pvt. Ltd. 185 16.5 Mutual Fund Activities Of Bata Dated Purchase E Gross Sale E Gross E Net D Gross Purchase Purchase Sale Nov-2009 6459.19 6053.50 Oct-2009 14915.80 Sep-2009 D Gross . Purchase 405.60 21850.50 14008.50 20225 -5309.10 72412.30 39127.60 14105.50 16346.40 -2241 38589.60 30950.40 Aug-2009 16764.70 16106.70 657.60 35460.90 27028.60 Jul-2009 21002.60 19848 1154.50 51842.90 23677.70 May-2009 17208.50 15606.10 1602.60 25237.20 15248.40 Apr-2009 11144.60 11126.30 18 44342.60 18390 Mar-2009 10580.70 9731.10 849.90 36771.30 18699.50 Feb-2009 4684.80 6522.20 -1837.10 26113.60 9617.50 Jan-2009 9329.50 10729.10 -1399.80 30688 12466.90 2008 165942.60 157947.80 7994 375593.50 250582.70 2007 2295188.8 2439399.2 144207.4 2535182.1 1846545.4 2006 252320.9 225232.49 27088.48 200310.87 142793.51 2005 69403.32 56430.06 10173.70 95552.40 60410.06 2004 42043.39 43309.58 -1366.14 54889.76 43321.63 2003 28096.03 27744.62 274.16 58352.08 38382.54 2002 15254.33 18248.17 -2711.52 44879.39 31341.79 2001 12792.96 17931.20 -5144.50 28851.62 19647.57 (http://www.sharekhan.com/MarketCorner/CommonGrid.aspx?Type=MFAct) Bata India Pvt. Ltd. 186 16.6 F I Activities Of Bata Dates . purchase (Rs Crore) Sale (Rs Crore) Investment (Rs Crore) Sep-2009 65197 46766.40 18430.50 Aug-2009 49306 45191.10 4115.10 Jul-2009 67176.60 56338.90 10837.40 Jun-2009 67277.20 63447 3830 May-2009 74776.40 54659.10 20117.20 Apr-2009 39653.30 33145.10 6508.20 Mar-2009 32377.40 31847.30 530.30 Feb-2009 21341.10 23777.90 -2436.60 Nov-2009 21966.90 19088.40 2878.40 Oct-2009 65441.30 57873.90 7568.10 Jan-2009 27874 32119.10 -4245.30 2008 717377.90 769977.40 -52599.60 2007 1309179.60 1204358.13 99838.70 2006 684534.80 666426.80 18802.50 2005 243570.20 201527.20 42607.63 2004 185664.20 145666.70 47980.80 2003 93988.80 63989.80 30590.40 2002 46479.10 42849.80 3629.60 (http://www.sharekhan.com/MarketCorner/CommonGrid.aspx?Type=FIAct) Bata India Pvt. Ltd. 187 16.7 Balance sheet of Lakhani particulars Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities 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 Miscellaneous Expenses Total Assets Contingent Liabilities Bata India Pvt. Ltd. Mar '03 Mar '04 Mar '07 13.74 13.74 0.00 0.00 40.10 0.00 53.84 28.95 0.00 28.95 82.79 65.89 25.31 40.58 0.00 0.04 54.70 10.59 0.63 65.92 4.33 0.00 70.25 0.00 26.64 2.11 28.75 41.50 0.67 82.79 1.40 13.45 13.45 0.00 0.00 40.22 0.00 53.67 23.61 0.00 23.61 77.28 71.09 28.54 42.55 0.00 0.04 47.72 12.75 1.90 62.37 5.93 0.00 68.30 0.00 30.56 3.38 33.94 34.36 0.34 77.29 2.40 13.45 13.45 0.00 0.00 47.87 0.00 61.32 29.16 1.96 31.12 92.44 34.86 11.54 23.32 27.97 0.40 48.69 22.26 0.70 71.65 2.01 0.00 73.66 0.00 32.71 0.17 32.88 40.78 0.00 92.47 0.00 Mar '08 13.45 13.45 0.00 0.00 48.99 0.00 62.44 98.52 0.46 98.98 161.42 88.09 15.36 72.73 0.00 14.80 71.51 49.95 1.29 122.75 4.16 0.00 126.91 0.00 52.26 0.75 53.01 73.90 0.00 161.43 0.00 188 16.8 Balance sheet of Liberty Particular Mar'05 Mar '06 Mar '07 Mar '08 5.07 5.07 0.00 0.00 57.13 0.00 62.20 22.11 31.45 53.56 115.76 17.04 17.04 0.00 0.00 64.63 0.00 81.67 48.81 21.45 70.26 151.93 17.04 17.04 0.00 0.00 81.82 0.00 98.86 104.03 22.02 126.05 224.91 17.04 17.04 0.00 0.00 97.78 0.00 114.82 103.32 15.06 118.38 233.20 Application Of Funds 66.50 Gross Block 27.39 Less: Accum. Depreciation 39.11 Net Block 0.24 Capital Work in Progress 4.02 Investments 41.01 Inventories 47.26 Sundry Debtors 1.78 Cash and Bank Balance 90.05 Total Current Assets 23.20 Loans and Advances 0.67 Fixed Deposits Total CA, Loans & Advances 113.92 0.00 Deffered Credit 33.27 Current Liabilities 8.27 Provisions 41.54 Total CL & Provisions 72.38 Net Current Assets 79.70 31.22 48.48 0.92 6.43 53.65 48.34 2.14 104.13 30.01 0.81 134.95 0.00 31.48 7.37 38.85 96.10 110.55 35.55 75.00 8.14 17.10 76.17 72.09 1.55 149.81 29.72 3.07 182.60 0.00 52.74 5.20 57.94 124.66 126.06 40.61 85.45 1.55 20.34 76.19 72.41 1.20 149.80 27.50 3.29 180.59 0.00 52.47 2.28 54.75 125.84 0.00 115.75 17.22 122.67 0.00 151.93 60.14 47.93 0.00 224.90 10.55 58.01 0.00 233.18 9.71 67.38 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 Miscellaneous Expenses Total Assets Contingent Liabilities Book Value (Rs) Bata India Pvt. Ltd. 189 17. References Content Overview of Footwear Industry Company profile History Reference List http://indmin.nic.in http://www.indianshoebazaar.com/ind_india.asp Leather supply http://leather.indiabizclub.com/info/indian_leather_industry_overview Export and Import Over View http://footwearsinfoline.tripod.com/export_import.htm Role Of Government In Shoe Industry http://www.thaindian.com/newsportal/politics/big-boost-for-agras-shoeindustry- if-state-government-helps_100116975.html#ixzz0XAkn7VPx Bata India http://www.bataindia.com Lakhani http://www.lakhaniarmaan.com/ Liberty www.libertyshoes.com/ Bata India http://www.sharekhan.com/Marketcorner/Detailedreport.aspx?type=comp_His &SSKIcode=BATA http://www.bataindia.com/page.php?kon=5_2_1 http://www.bataindia.com/page.php?kon=4_0 Lakhani http://www.sharekhan.com/Marketcorener/DetailedReport.aspx?Type=compHIS&SSKIcode=LAKHANI Liberty http://www.sharekhan.com/Marketcorener/DetailedReport.aspx?Type=compHIS&SSKIcode= LIBERTY Bata India Pvt. Ltd. 190 Bata Products Human Resource Policy Balance Sheet: Women’s wear http://www.bata.in/catlist.php?catItem=22 http://www.bata.in/catlist.php?catItem=12 Men’s wear http://www.bata.in/catlist.php?catItem=41 http://www.bata.in/catlist.php?catItem=31 http://www.bata.in/catlist.php?catItem=21 http://www.bata.in/catlist.php?catItem=11 Kids wear http://www.bata.in/catlist.php?catItem=23 http://www.bata.in/catlist.php?catItem=33 http://www.bata.in/catlist.php?catItem=43 Bata Mr. S C Kapoor Lakhani http://www.indiainfoline.com/market/company Liberty http://www.indiainfoline.com/market/company Bata http://www.sharekhan.com/MarketCorner/CommonGrid.aspx?Type=BA&SSKICode=BATA Liberty http://www.sharekhan.com/MarketCorner/CommonGrid.aspx?Type=PL&SSKICode=LIBERTYS Profit and Loss Account : Bata http://www.sharekhan.com/MarketCorner/CommonGrid.aspx?Type=PL&SSKICode=BATA Lakhani http://www.sharekhan.com/MarketCorner/CommonGrid.aspx?Type=PL&SSKICode=LAKHANI Bata India Pvt. Ltd. 191 18 .Report Check List Check for reports- A4 paper size word-processed, typed or neatly and legibly written double-line spacing 2.5 to 3 cm left-hand margin * cover sheet clearly labelled headings (if required) * Do you have a copy of this assessment item? * Bibliography Anexture Table of Content * * * * * * * Proofread for the following language features Colloquial terms-slag words or informal expression. * Cliches * Jargon Double meanings or ambiguity * Use of personal pronouns (I, You, us, we ,our) * * Elision (it`s for it is; won`t for will not; isn`t for is not) * Emotive language * Parallel constructions (keeping the same tense) Acronyms (full citation of terms rather than letter symbols) * Abbreviations * Ampersand (`&` in place of the word `and`) * Conciseness * Preciseness * Capitalization of alphabetical letters where necessary (Titles, names, place) * Discriminatory language * Bata India Pvt. Ltd. * 192 Spelling, typographical errors Punctuation- read your document aloud. Note the place where your pause * naturally and punctuate accordingly. * Grammatical construction- check that sentences are complete units of meaning and not sentence fragments. * Check that your sentences are not too short , lacking in the use of conjunctive words (however, therefor, moreover, alternatively) * Bata India Pvt. Ltd. 193