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FINANCE

It is true that money (Finance) plays a very important role in the sphere of

business to grow and bring the company position at the top. If the financial

position of the company is good, there is no doubt that company or industry

will grow faster in the existing.

FINANCIAL ANALYSIS

The term analysis is methodical classification of data given in the financial

statements.

Financial analysis is the process of identifying the financial strength and

weakness of tiles Finn by property establishing relationship between the

item of balance sheet & profit & loss account.

Financial analysis can be undertaken by the firm or by outside parties, firm’s

owner, creditors, investors and other. Actually the nature of analysis depends

upon the parties.

Feature of Financial Analysis:-

1. To presents a complex data contained in the financial statement in

simple and understandable form.

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2. To classify the item contained in the financial statement in the

convenient and rational groups.

3. To make comparison between various groups to draw various

conclusions.

FINANCIAL STATEMENTS

Financial statements mean a statement or document which explains

necessary financial information about an organization/ company. The

financial statements are prepared on the basis of facts recorded in books.

These recorded facts are expressed in the monetary terms.

In the United States, a company that offers its common stock to the public

typically needs to file periodic financial reports with the Securities and

Exchange Commission (SEC). 

The SEC governs the content of these filings and monitors the accounting

profession. In turn, the SEC empowers the Financial Accounting Standards

Board (FASB) - an independent, nongovernmental organization - with the

authority to update U.S. accounting rules. When considering important rule

changes, FASB is impressively careful to solicit input from a wide range of

constituents and accounting professionals. But once FASB issues a final

standard, this standard becomes a mandatory part of the total set of

accounting standards known as Generally Accepted Accounting

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Principles (GAAP).

TYPES OF FINANCIAL ANALYSIS

1. Classification on the basis of material used.

2. Classification on the basis of modus operandi.

On the basis of material used :-

External analysis:-

Internal analysis:-

On the basis of modus operand :-

Horizontal analysis:-

Vertical analysis:-

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Significance or importance of Financial Analysis :-

1. Significance for Managers ;-

2. Significance for Investors:-

3. Significance for Creditors:-

4. Significance for regulatory agency:-

5. Significance for Employees:-

6. Significance for others parties:-

7. Significance for Government :-

Limitation of Financial Analysis :-

1. Mis lead the users:-

2.Not useful for planning:-

3.Qualitative aspects:-

4.Comparison not possible:-

5.Wrong judgement:-

6.Not helpful in price fixation:-

7.Not control on cost:-

8.No analysis of losses:-

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PURPOSE OF FINANCIAL ANALYSIS

1. To know the earning capacity or profitability.

2. To know the solvency.

3. To know the financial strength.

4. To make comparative study with other firms.

5. To know the capability of payment of interest & dividend.

6. To know the trend of business.

Statements are including in the list of financial statements :-

1. Profit and loss account.

2. Balance sheet.

3. P & L appropriation account.

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4. Cash flow statement.

5. Various schedules.

6. Explanatory notes given at the end of financial statement.

TECHNIQUES OR METHODS OF FINANCIAL ANALYSIS :-

1. Comparative Statements.

2. Trend analysis

3. Common size Statements.

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4. Fund flow statements.

5. Cash flow statements.

6. Ratio Analysis.

7. Break even point Analysis

.

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OBJECTIVE OF THE PROJECT : -

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The financial statements are the sources of information on the basis of which conclusions are drawn about the profitability and financial position of an organization/ company.These statements help the company in making planning and taking decisions.

1. To measures the earning capacity or profitability of the company.

2. To measures the solvency of the company.

3. To measure the financial strength of the company.

4. To makes comparative study with other firms.

5. To measures the capability of payment of interest and dividend of the company.

6. To identify the trend of the business of the company.

7. To judge the efficiency of management of the company.

8. To provide useful information to the management

9. To determine the change in financial condition of business.

10.To determine the source from where the working capital was obtained & for which purpose it will be used.

11.To spot out strength & weakness of business.

12.To determine the absolute figure for the last three years and the absolute changes from one year to another two years and the absolute change in term of percentage.

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13.To compare assets & liabilities and find out the any increase or decrease in above on three different dates.

14.To depict change in cash position from one years to another two years.

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RESEARCH METHODOLOGY

Research, which is done for his particular project is with the help of data collection.Data, which is collected, is mainly secondary data, which is collected from the account books of the Liberty Shoes Limited.

Here the research process, which is used is as follows:-

Research problem

Here the problem is to analyze the ratio of the company for which we have to conduct the research.

Executive literature survey:

Now we have to see that from where the data is being collected on which we have to perform the research.

Prepare the research design :

Here the research is descriptive research as we to give various description so design are formulated accordingly.

RESEARCH DESIGN

Research design is a framework or the blue print for conducting the research project. Research design is the arrangement of conditions for collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure. It includes an outline of what the researcher will do from writing the hypothesis and its operational implications to the final analysis of data.

TYPES OF RESEARCH DESIGN

Exploratory research design

Descriptive research design

Experimental research design

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EXPLORATORY RESEARCH DESIGN

It is also termed as formulative research design. The main purpose of the

study is to formulate a problem for more precise investigation.

DESCRIPTIVE RESEARCH DESIGN In descriptive research design,

those studies are taken which are concerned with describing the

characteristics of a particular individual or a group.

EXPERIMENTAL RESEARCH DESIGN

In this casual relationships between the variables are tested. It is also known

as hypothesis testing research design.

The present project is analytical in nature. The main objective of the

analytical research design is to define the problem into researchable one and

analyze the data according to the purpose.

Sample size :

Here the sample is taken from the companies past records of various accounts. Here sampling is done step by step or we can say multistage sampling.

Collection of data :

Data, which is collected for the research is secondary data as I had collected it from the account books of the company.

Execution of project :

When data is being collected then that the data is used for the execution of the project.

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Analysis of data :

In this stage of research process the data is made in the tabulated whether data is adequate or not.

Preparation of report :

Finally the report is prepared on the basis of various conclusions drawn.

SOURCES OF DATA

Primary data companies of information obtain from employees of this organization.

Secondary data :-

Secondary data companies of annual reports, questioning, ledger and past records.Company has provided me annual reports from 2000-2001 to 2008 to 2009 by the help of which prepared my report.In this project, I have used secondary data which has been collected from

following sources:-

Annual Reports

Books

Internet

Other material and report published by company

Questioning : -

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Actually no particulars questionnaire was prepared. Questions related to problem and data tallied with FM, CA & accountants of the company.

Special record searching : -

Special records are maintains by accountants have been made during the studied thoroughly while making this report.

Analysis :-

Analysis of various types of data, statement were also made during the study by using standard formulas.

LIMITATION OF STUDY

The study was conducted in limited areas.

Employees felt unnecessary burden.

Any biases by the respondents may lead to wrong infer

The time of study was less.

Scope of study was very wide.

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Respondents cannot be force give true response.

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INTRODUCTION

Liberty is leading footwear industry covering brands under its own name.

Liberty shoes are known for its quality in India and abroad. The footwear

liberty emerged in 1954 in the field of manufacturing and exporting of

footwear. This company is manufacturing leather shoes, sports shoes, non –

leather shoes, leather shoes upper and Hawaii chappals for gents, ladies and

children. The Liberty has its corporate office , centre house and human

Tech. centre ΙΙΙ, liberty park in karnal city Registered office & human tech.

centre Ι, Liberty puram in kutial (karnal) and human Tech. centre ΙΙ ,liberty

complex in Ghuraunda (karnal) .The marketing office is located at Punjab

Bagh New Delhi. The liberty has its domestic branch office at Agra,

Bengaluru, Chennai, Delhi, Jaipur, Jammu, Rajpura and Sharanpur. It has its

banker state Bank of india specialized commercial branch karnal for

enhancement of working capital limits. By invention of ACS (air circulation

system) technology, a sole, that prevents feet from sweating in hot and

humid conditions are more revolutionary step by liberty in footwear market.

It talk the extra mile to ensure customer’s satisfaction world wide. The major

strength of liberty footwear is its strong distribution channel and its

technological advancement. Liberty is devoted to the customer of the world

and they strive hand to keep true to there motto, ”SAPNE AB HUE

APNE”.

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HISTORY OF LIBERTY SHOES LIMITED

Like all the enterprises this company too is seeped in history. It was on 25 th

December 1954 when India was nurturing its growth as a free country those

three dreamers in a small town in erstwhile Punjab throughout of producing

an Indian brand of footwear to make a basic necessity available to their

countrymen . Late Sh. D.P.Gupta. Late Sh.P.D. Gupta & Late Sh. R.K.

Bansal Ji allowed their vision to cross every barrier and brought in

technology to ensure that the feed to the market was of world class. Soon

the product and the name become generic to quality footwear in the

domestic market and this allowed the company to invest further for

enhancing production capacity and cater to international market too.

With 50 years of excellence behind it liberty today is amongst the five

largest footwear manufacturers of the world. It produces footwear for the

entire family and is a trusted name in many households across India and

world. In the domestic market we are one of the most admired footwear

brands and hold the largest market share for leather footwear.

Liberty 50 years of excellence behind it Liberty today is amongst the five

largest footwear manufacturers of leather footwear of the world with a

turnover in excess of U.S $100 Million .Producing more than 90000 pair of

footwear a day .

A range that is among the largest in the industry, covering virtually every

age group and income category. Marketed across the globe through 150

distributors, 350 excutive showrooms and over 6000 multi- brand outlets

and sold in thousands every day in more than 25 countries including fashion

driven, quality obsessed nations like France, Italy. Company was

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incorporated on 3rd sept.1986 as a public company and obtained the

company W.E.F business on 11th March 1988. Firm register office of the

companies situated at Delhi, Haryana and New Delhi. The company shifted

its registered office from Union Territory of Delhi to Karnal.

The company has been set to manufacturer and to sell leather and non-

leather shoes upper and leather garments. Presently company is engage

manufacturing leather and non- leather shoes. Company has also set up a

joint venture in Russia to manufacture shoes in 1991 under the name of M/S

Liberty & Co. with M/S Groky Product & shoes unit Groky City but

subsequently the name of venture was changed as “Liberty & Nino”.

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SOCIAL RESPONSIBILITY

Liberty conducts its business with honestly, integrity and respect for all

those who come in contact with it in course of business. Fully appreciative

of the fact that its reputation stems from not just quality products and

technological innovations but also from the manner of its dealing with

customers, suppliers, government official and all those who are outside the

Liberty Group. Utmost importance is also given to ensuring a safe, healthy

and non discriminatory work environment for all Liberty employees where

they are free from harassment of any from supervisor, senior, co- workers,

customer and suppliers. Ethical standards and practices are rigorously brands

like Wal-Mart, Reebok, Nike etc. who recognize it as an equal opportunity

employers.

The present Scenario

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The company markets its product nationally and internationally under the

brand “Liberty Co”. Is well established in national and global marker. The

company has appointed dealer and distributor for marketing its product

besides selling through the existing Dealer Company provide 20% to 30%

discount rate on the print rate. The company has enter into an agreement

with one of the group firm M/S Liberty Enterprise for using the established

brand name “ Liberty”. As per the term of agreement company can use this

term of agreement co. and use the trademark initially for a period of 5 years

and has to royalty of Rs 20 Lac. The Company has commenced commercial

production for non- leather shoes on 25th December 1993. Initially direct

injection- soing machine was installed with the capacity of 24000 pairs

premium on single shift basis. The second direct injection machine installed

in March 1994. From the commencement of commercial period till 31th

march 1994 the co. has been separated on full capacity. As the promoters are

in this line for the last five decades the company has recently launched new

product of Hawaii chapels.

The present over supply in the domestic market is improved due to this

increasing growth rate of demand over the base several years.

Future plan

Group has set up this company to expand its exciting capacity by more than

two times to increase in the market share in national and international

market and to meet out the growing demand of its product. The group has

ambition plan for the future to globalize its brands “Liberty “ and with and

in new it has created a distribution network not only in India but also in

Europe and in Middle East , which is dedicated to market the group branded

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products. The group plans to restructure its separation into integrated shoes

manufacturing and market organization.

Decision making

All the decisions, which are of the strategic nature, is to be taken at highest

level. Various committees for the formulation of policies for the different

functional area have been constituted. Before taking any financial decision

proper consultation with concerned executive is done. The heads of the

department have sufficient opportunities for participation in decision

making .their views recommendations and suggestion are given due

consideration. However the final authority lies with top executive.

GROUP OF COMPANY

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Liberty automotive is a joint venture company promoted by azin khodro

group of Iran and project at bawal industrial growth centre on Delhi – Jaipur

national highway for manufacturing automotive trim parts. Drawing upon

the consideration manufacturing experience of Azin Khodro Group and the

business of Liberty group, it is all set to deliver high quality finished

products. Armed with a unique R & D source Liberty automotive is able to

offer ideas to create solution and resources, to meet the challenge of

performance optimization of a car.

Liberty Organosys

Liberty group for manufacturing acetic acid in India promotes Liberty

organosys limited. Liberty proposes to use methanol carbonization route for

manufacturing this organic chemical 60% of the world production is based

on technology. Liberty plans to build this in a large scale. Meeting the entire

demand of the nation. The technical details of the project will be announced

soon.

Liberty revolution

In the elite shopping avenues of fashion capital “Revolution” has begun its

walk. The fashion accessory and footwear stores have begun operation in

Chennai, Bengaluru, Mumbai, Kolkata, Hyderabad and Pune. These are

company managed and owned outlets where the emphasis is to deliver high

fashion to the customer backed by quality service making it a delightful

shopping experience. Liberty showrooms enter the international market as

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company has plans of opening 18 more revolution showrooms nationally &

internationally.

Liberty Whiteware Ltd.

Just 90 minutes away from New Delhi on the national highway 8 that joins

the country’s political capital with its business capital frenetic activity is on.

It is where Liberty whiteware factory is fast taking shape. Liberty whiteware

is all set to introduce to domestic market some very up – market sanitary

ware that will be manufactured here. It will come with some obvious

advantages. Like international products at domestic process for one and the

opportunity for discerning customer to choose at leisure what would be seen

first time in India. A part of Liberty‘s diversification the investments in the

project are to the tune of 10 million Euro and with production plans running

ahead of schedule the cash register should soon start ringing well before

time at Liberty whiteware Ltd.

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PROMOTERS OF COMPANY

The company comes under the public limited companies groups and belongs

to “Liberty Group”. The company has been promoted by three business

persons name as

Late Sh. D.P. Gupta

He has been associated with shoes industry for the last 80 years. He initiated

the shoe business under the trading cycle “Pal Boot House”. In 1994 he had

been involved with Liberty group since than. He was also activating in

social.

Late Sh. P.d. Gupta

He was 75 years old, chairman and the managing director of the company.

He had been associated with the shoe industry since the age of 16 years. He

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was also chairman of joint venture set up in Russia by the company. He had

been the president of all India chambers of footwear exports for last 20

years.

Late Sh. R. K. Bansal

He was 67 years old and the promoter’s director of the company. He had

been associated with shoe industry and with the trade for last 45 years. He

had the knowledge of international markets with his ability in the marketing

company is capable of introducing “Liberty” products in most advanced

countries such as Italy and America. He was also partner in many associated

firms.

BOARD OF DIRECTORS

Mr. Adesh Gupta (CEO,Executive Director)

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Mr. Adarsh Gupta (Executive Director )

Mr. Shammi Bansal (Executive Director)

Mr. S.K. Goel (Independent Executive Director)

Mr. Sunil Bansal (Non Executive Director)

Mr. Amitabh Taneja (Independent Director)

Mr. Prem Chand Grag (Non Executive Independent Director)

Mr. S.K. Arya (Non Executive Independent Director)

Mr. Sidharth Sanghi (Non Executive Independent Director )

Mr. Raghu Dayal ( Non Executive Independent Director)

Mr. Vivek Bansal (Non Executive Independent Director)

Mr. Munish Kakra (Vice President & Company Secretary)

LIBRTY BRAND

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Libety has developed a spectrum of 10 exclusive brands, each of which have

been given that extra edge to enter to a specific target group. Today the new

range from liberty is all about style, design and comfort. The range imbibes

the spirit of fun and is trendy to the core.

Liberty has something for every income bracket & every age group. It

pampers its customers to keep pace with global footwear fashion trend & by

walking that extra mile which is why, special care has been taken to make

sure that the outlets design meets the specific needs taste of the target

groups.

A part from the existing brands, liberty is busy fashioning the look of the

future footwear. Introducing new decisions that redefines styles and comfort.

This family brand is style personified with something for every need. Be it

formal or casual, at office or at the beach, a conference or a soiree Liberty

fits in effortlessly.

COOLERS

They’re cool and they’re hot. They’re hap and they’re

happening. Perfect for the hot summer days. When the

sun blisters and the heat strokes, they keep the feet cool

and comfortable. But why limit the pleasure to summers?

Here’s one brand of sandals that stays cozy and comfy all year round.

FOOTFUN

Something for those little feet as they learn to walk. Airy,

light and comfortable with lycra uppers and no laces.

In fairy-tale colors and designs.

FORCE-10

The flair, the style and ease that forces the

world to take notice. A happening range of

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sports shoes in far out colors that provides

the perfect footnote to a head-turning

presence.

FORTUNE

Genuine leather uppers and extra light poly

soles help complete the power dressing in

men with élan and panache.

GLIDERS

Cool and comfortable, trendy and with it. A

range of stunning brogues and smart lace

ups that will be noticed and talked about

every step of the way. Unmistakably a part

of Generation You.

SENORITA

Walk tall, walk light and walk with amazing

style. Rediscover the little girl that lurks

not far behind in every woman, laughing and

loving every moment of life.

TIPTOPP

Strappy, styles and comfortable heels. And

colors that become the envy of all and

sundry. Perfect for conquering the

neighborhoods in designs that are the latest

rage the world over.

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WARRIOR

Smart, stylish professional gear crafted from

leather uppers and direct injection P.U. soles

with steel toe caps and offering the widest

range of styles in safety shoes. To master the

art of being confident and sure-footed on

slippery grounds and danger ones.

WINDSOR

The premium is on lightness, style and

comfort which make it ideal for men who

take every challenge effortlessly in their

stride.

FREEDOM

A new introduction in the safety footwear

segment in Nit rile PVC material, offering

customers with waterproof, fire retardant

and shock free product in economic range.

Safety footwear for industrial use.

DETAILED DESCRIPTION OF POPULAR BRANDS

NAME OF DETAILS TYPES MADE OF FOR THEM

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BRAND

Force -10 Family force Sports &

Leather

Canvas Gents

Windsor Liberty castte Leather shoe Leather Gents

Fortune Good luck Leather shoe Leather Gents

Ricardo Recoras Leather shoe Leather Gents

Gliders Fly in air Canvas shoe Canvas Children &

gents

Tip –Top Fun for

children

Canvas &

leather

Canvas &

leather

Children

Senorita Seniority Bellerion

sandal

Leather Ladies

Coolers Feel coolness Slippers sandals Leather Gents

Geo Sports Build

sportsmanship

Sports shoe Leather Gents & ladies

Foot fun - Sports shoe Canvas Children

OBJECTIVE OF THE COMPANY

The main objective to be pursued by the company on its incorporation as set on

memorandum of association as under:-

To work as buying selling agent with or without trademark for finished product.

To import the technical knowhow of foot wear and PVC technology.

To deal in raw hinds and skins.

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To carry on business of manufacturing and repairing and wholesale dealers in all

types of footwear and accessories of footwear(such as heels, soles , puckers and hand

grouse and other product of leather), PCC, leather manufactures and dealers in all

kinds of water proof articles

To prepare , process, cost ,transport, refine, recover, retain utilize ,extract, finish

import, buy and sell market install summary and carry on business as manufacture

dealer in all kinds of footwear, component and accessories.

NATIONAL AND INTERNATIONAL AWARDS

The liberty group has won several prestigious national and international awards,

which are as under:

Arch of Europe international gold star, 1994.

International award for good quality, Brussels, Belgium 1988.

Europe award for pair in 1987.

International Asian award, Jakarta in 1982.

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National award from government in 1981 – 1982. Udyog rattan by

government of India.

Certificate of merit as national export award from government of India in

1989.

Leather export promotion council merit award for outstanding performance

for 1976 to 1982.

National award for best export performance in leather garments in 1987 –

1988.

Haryana government export award in 1978-1979.

UNITS OF LIBERTY SHOES LIMITED

REDGISTERED OFFICE & HUMAN TECH CENTRE -1

LIBERTYPURAM,

13TH MILE STONE,

G.T. KARNAL ROAD KUTAIL,

P.O.BASTARA.

DIST. KARNAL -132114 (HARYANA)

CORPORATE OFFICE & HUMAN TECH CENTRE -11

LIBERTY COMPLEX, 17TH MILE STONE,

G.T. KARNAL ROAD, GHARAUNDA,

DISTT. KARNAL

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HUMAN TECH. CENTRE -111

LIBERTY PARK, LIBERTY ROAD,

DISTT. KARNAL -132001 (HARYANA)

HUMAN TECH. CENTRE -1V

LANGA ROAD, V1LL. CHARBA,

P.O. SAHASPUR, VIKAS NAGAR,

DEHRAHUN (UTTRANCHAL)

BRANCHES

DELHI, JAMMU, JAIPUR,

CHENNAI, RAJPURA, BANGLORE,

AGRA, SAHARANPUR, MUMBAI,

CALCUTTA, HYDRABAD.

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Indian footwear industry:-

Indian leather industry is the core strength of the Indian footwear industry. It

is the engine of growth for the entire Indian leather industry and India is the

second largest global producer of footwear after China.

Reputed global brands like Florsheim, Nunn Bush, Stacy Adams, Gabor,

Clarks, Nike, Reebok, Ecco, Deichmann, Elefanten, St Michaels, Hasley,

Salamander and Colehaan are manufactured under license in India. Besides,

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many global retail chains seeking quality products at competitive prices are

actively sourcing footwear from India.

While leather shoes and uppers are produced in medium to large-scale units,

the sandals and chappals are produced in the household and cottage sector.

The industry is poised for adopting the modern and state-of-the-art

technology to suit the exacting international requirements and standards.

India produces more of gent’s footwear while the world’s major production

is in ladies footwear. In the case of chapels and sandals, use of non-leather

material is prevalent in the domestic market.

Leather footwear exported from India are dress shoes, casuals, moccasins,

sport shoes, horrachies, sandals, ballerinas, boots. Non-leather footwear

exported from India are shoes, Sandals and Chappals made of rubber,

plastic, P.V.C. and other materials.

With changing lifestyles and increasing affluence, domestic demand for

footwear is projected to grow at a faster rate than has been seen. There are

already many new domestic brands of footwear and many foreign brands

such as Nike, Adidas, Puma, Reebok, Florsheim, Rockport, etc. have also

been able to enter the market.

The footwear sector has matured from the level of manual footwear

manufacturing methods to automated footwear manufacturing systems.

Many units are equipped with In-house Design Studios incorporating state-

of-the-art CAD systems having 3D Shoe Design packages that are intuitive

and easy to use. Many Indian footwear factories have also acquired the ISO

9000, ISO 14000 as well as the SA 8000 certifications. Excellent facilities

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for Physical and Chemical testing exist with the laboratories having tie-ups

with leading international agencies like SATRA, UK and PFI, Germany.

One of the major factors for success in niche international fashion markets is

the ability to cater them with the latest designs, and in accordance with the

latest trends. India, has gained international prominence in the area of

Colours & Leather Texture forecasting through its outstanding success in

MODEUROP. Design and Retail information is regularly made available to

footwear manufacturers to help them suitably address the season's

requirement.

The Indian Footwear Industry is gearing up to leverage its strengths towards

maximizing benefits. Strength of India in the footwear sector originates from

its command on reliable supply of resources in the form of raw hides and

skins, quality finished leather, large installed capacities for production of

finished leather & footwear, large human capital with expertise and

technology base, skilled manpower and relatively low cost labor, proven

strength to produce footwear for global brand leaders and acquired

technology competence, particularly for mid and high priced footwear

segments. Resource strength of India in the form of materials and skilled

manpower is a comparative advantage for the country.

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Indian Scenario:

The Footwear Industry is a significant chunk of the Leather industry in

India. India ranks second among the footwear producing countries next to

China. The industry is labor intensive and is concentrated in the small and

cottage industry sectors. While leather shoes and uppers are concentrated in

large-scale units, the sandals and chappals are produced in the household

and cottage sector. India produces more of gents footwear while the world’s

major production is in ladies footwear. In the case of chappals and sandals,

use of non-leather material is used tomanufacture these in the domestic

market.Reputed global brands like Florsheim, Nunn Bush, Stacy Adams,

Gabor, Clarks, Nike, Reebok, Ecco, Deichmann, Elefanten, St Michaels,

Hasley, Salamander and Colehaan are manufactured under license in India.

Besides, many global retail chains seeking quality products at competitive

prices are actively sourcing footwear from India.

The industry is on the edge of adopting the modern and state-of-the-art

technology to suit the exacting international requirements and standards. The

Indian Footwear Industry is all set for leveraging its strengths towards

maximizing benefits. Strength of India in the footwear sector originates from

its command on reliable supply of resources in the form of raw hides and

skins, quality finished leather, large installed capacities for production of

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finished leather & footwear, large human capital with expertise and

technology base, skilled manpower and relatively low-cost labor, proven

strength to produce footwear for global brand leaders and acquired

technology competence, particularly for mid and high priced footwear

segments. India has the competitive advantage over other countries in the

form of materials and skilled manpower The Indian footwear retail market is

expected to grow at a CAGR of over 20% for the period spanning from 2008

to2011. Footwear is expected to comprise about 60% of the total leather

exports by 2011 from over 38% in 2006-07. Presently, the Indian footwear

market is dominated by Men's footwear market that accounts for nearly 58%

of the total Indian footwear retail market.By products, the Indian footwear

market is dominated by casual footwear market. As footwear retailing in

India remains focused on men's shoes, there exists a plethora of

opportunities in the

exclusive ladies' and kids' footwear segment. The Indian footwear market

scores over other footwear markets as it gives benefits like low cost of

production, abundant raw material, and has huge consumption market.

India is now a major supplier of leather footwear to world markets and has

the potential to rival China in the future (60% of Chinese exports are

synthetic shoes).

India is often referred to as the sleeping giant in footwear terms. It has an

installed capacity of 1,800 million pairs, second only to China. The bulk of

production is in men’s leather shoes and leather uppers for both men and

ladies. It has over 100 fully mechanized, modern shoe making plants, as

good as anywhere in the world (including Europe). It makes for some up

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market brands including Florsheim (US), Lloyd (Germany), Clarks (UK),

Marks and Spencer (UK).

SWOT Analysis of Indian Footwear Industry:-

STRENGTHS: -

Existence of more than sufficient productive capacity in tanning.

Easy availability of low cost of labour.

Exposure to export markets.

Managements with business background become quality and

environment conscious.

Presence of qualified leather technologists in the field.

Comfortable availability of raw materials and other inputs.

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Massive institutional support for technical services, designing,

manpower development and marketing.

Exporter-friendly government policies.

Tax incentives on machinery by Government.

Well-established linkages with buyers in EU and USA.

WEAKNESSES: -

Low level of modernisation and upgradation of technology, and the

integration of developed technology is very slow.

Low level of labour productivity due to inadequate formal training /

unskilled labour.

Horizontal growth of tanneries.

Less number of organised product manufacturers.

Lack of modern finishing facilities for leather.

Highly unhygienic environment.

Unawareness of international standards by many players as maximum

number of leather industries are SMEs.

Difficulties in accessing to testing, designing and technical services.

Environmental problems.

Non availability of quality footwear components

Lack of fresh investment in the sector.

Uneconomical size of manufacturing units.

Competition among units vying for export orders leading to

undercutting.

Little brand image.

Poor labour productivity. Lack of awareness about consistent in

plant training and retraining- Inconsistent quality high rejection rate

42

Low machine and material productivity.

Lack of quality job work units

Delayed deliveries

Weak support infra- structure for exports

OPPORTUNITIES: -

Abundant scope to supply finished leather to multinationals setting up

shop in India.

Growing fashion consciousness globally.

Use of information technology and decision support software to help

eliminate the length of the production cycle for different products

Product diversification - There is lot of scope for diversification into

other products, namely, leather garments, goods etc.

Growing international and domestic markets.

Exposure to newer markets through Fairs/ BSMs

Retain customers through quality supplies and timely deliveries

Aim to present the customer with new designs, infrastructure, country

& company profiles.

Use of modern technology

Exhibit strengths in manufacturing, for example, strengths in classic

shoe manufacturing, hand crafting etc.

De-reservation of the footwear sector.

THREATS: -

Entry of multinationals in domestic market.

43

Stiff competition from other countries.(The performance of global

competitors in leather and leather products indicates that there are at

least 5 countries viz, China, Indonesia, Thailand, Vietnam and Brazil,

which are more competitive than India.)

Non- tariff barriers - Developing countries are resorting to more and

more non – tariff barriers indirectly.

Improving quality to adapt the stricter international standards.

Fast changing fashion trends are difficult to adapt for the Indian

leather industries.

Limited scope for mobilising funds through private placements and

public issues, as many businesses are family-owned.

44

45

Share in GDP of footwear industry:-

46

India's GDP recently crossed the trillion-dollar mark for the first time

and with this India has joined the elite club of 12 countries with a trillion

dollar economy. Countries that have breached trillion-dollar GDP level

in the past are he US, Japan, Germany, China, UK, France, Italy, Spain,

Canada, Brazil and Russia. 

The GDP or Gross Domestic Product is the primary indicator used to

gauge the health of a country's economy. The GDP of a country is

defined as the market value of all final goods and services produced

within a country in a given period of time. It is also considered the sum

of value added at every stage of production of all final goods and services

produced within a country in a given period of time. GDP is a number

that expresses the worth of the output of a country in local currency.

GDP tries to capture all final goods and services that are produced

within the political and geographical frontiers of the country, thereby

assuring that the final monetary value of everything that is created in a

country is represented in the GDP. GDP is calculated for a specific

period of time, usually a year or a quarter of a year. 

According to the data released for the year 2006-2007, India's GDP grew

at an impressive 9.2 per cent. The share of different sectors of the

economy in India's GDP is as follows: Agriculture - 18.5 per cent,

Industry - 26.4 per cent, and Services - 55.1 per cent. The fact that the

service sector now accounts for more than half the GDP is a milestone in

India's economic history and takes it closer to the fundamentals of a

developed economy. At the time of independence agriculture occupied

the major share of GDP while the contribution of services was relatively

47

very less.

The government has set a target of an average annual GDP growth of 9

per cent for the Eleventh Five Year Plan. The target looks achievable as

all the macroeconomic fundamentals are strong and the impressive

growth rate of Indian GDP looks all set to continue.  Footwear

Market in India 2010 ... India has around 3% share in the global trade of

leather in comparison to Chinas 20%. In order to . ... From 10% of the

Indian GDP in2007, it became 12% of GDP in 2009. ...

COMPETITORS

48

Companies Profile:ADIDAS:Adidas ltd is a German sports apparel manufacturer and part of the Adidas group, which consist of Reebok sportswear company, Taylor Made-

49

Adidas golf company, and Rockport. Adidas is the largest sportswear manufacturer in Europe and the second largest sportswear manufacturer in the world. Company’s revenue for2006 was listed at about US $ 13.625 billion and the 2007 figure was listed about $ 15.6 billion. It has more than 170 subsidiaries guarantee marketplace presence for Adidas products around the world.Liberty: Liberty shoes ltd. is a leading leather shoes brand and is engaged in the manufacturing, supplying and exporting of the footwear’s. It is the only Indian leather shoe brand that occupies fifth ranking among the top shoes manufacturing companies in the world.Reebok: Reebok specializes in the design, marketing and distribution of sports and fitness products including footwear, apparel and accessories, as well as footwear and apparel for non-athletic use. The company has three main product categories: Rbk, Performance, and Classic.Each of these product categories features product offerings for both men and women that are designed for specific consumer groups. Reebok has operations in the UK, Europe and in various and in various Asian countries. It is headquartered in canton, Massachusetts. The acquisition of Reebok by Adidas-Salomon was completed in January 2006.

Bata: Bata industries is a specialized division of the world’s largest shoe manufacturer: the Bata shoe Organization (BSO). Bata industries has operations and production facilities in most of the countries worldwide. Bata India Limited is the largest footwear retailer in India. Bata India is a manufacturer of footwear. Types of footwear offered by the company include rubber, canvas, leather and plastic footwear. The company also markets apparel under the brand names of North Star, Power and Ambassador. Bata India has five manufacturing plants and acquires its leather from two tanneries in Mokamehghat (Bihar) and Batanagar. It is headquartered in West Bengal, IndiaRelaxo: Relaxo entered into footwear industry in 1976. It started off with the manufacturing of Hawaii slippers and subsequently diversified into manufacturing casuals, joggers, school and leather shoes. Relaxo has the capacity to manufacture over 100 million pairs, per annum. It has the customer base of around 100 million.

50

KEY FINANCIAL FIGURE OF TOP SIX FOOTWEARCOMPANIES FOR THE YEAR 2007 -2008

COMPANY NAME

Paid up Eq. share capital

Promoters contribution(%)

Net profit & loss after tax its margin(%) (Rs. In Cr.) (%)

Dividend (%)

EPS(%)

Return on Net Worth (%)

Offer price of last issue

Closing price (%)

52 week Gain/Loss

BATABata India Ltd.

64.26 51.02 47.44 5.47 20.00 7.38 22.56 30.00 167.55 179.80

76.00

458.50

LIBERTYLiberty Shoes Ltd.

17.04 61.94 16.5 6.47 - 9.42 13.98 99.00 62.15 78.05

32.30

25.55

MIRZA Tanners Ltd.

18.54 64.65 3.61 2.84 15.00 0.39 2.84 60.00 14.00 18.15

6.50

(53.33)

RELAXORelaxo Footwear Ltd.

6.00 75.00 10.52 3.44 15.00 8.77 17.31 60.00 51.65 60.00

24.25

72.17

SARUPTunners Ltd.

3.2 74.36 1.51 4.13 12.00 4.66 6.72 40.00 42.25 52.65

21.15

5.63

SUPER HOUSESuper House Ltd.

9.59 44.84 3.95 1.25 - 4.12 4.45 15.00 28.00 32.50

15.00

86.67

51

52

FINANCIAL ANALYSIS

The term analysis is methodical classification of data given in the financial statements.

Financial analysis is the process of identifying the financial strength and weakness of

tiles Finn by property establishing relationship between the item of balance sheet & profit

& loss account.

Financial analysis can be undertaken by the firm or by outside parties, firm’s owner,

creditors, investors and other. Actually the nature of analysis depends upon the parties.

“Financial analysis consists in separating facts according to some definite plan, arranging

them in groups according to certain circumstances, and then presenting them in a

convenient and easily read and understandable form.”

According to Finney and Miller

“Financial statement analysis is largely a study of relationship among the various

financial factors in a business, as disclosed by a single set of statements and a study of the

trends of these factors, as shown in a series of statements.”

According to John N. Myres

Feature of Financial Analysis:-

1. To presents a complex data contained in the financial statement in simple and understandable form.

2. To classify the item contained in the financial statement in the convenient and rational groups.

3. To make comparison between various groups to draw various conclusions.

53

TYPES OF FINANCIAL ANALYSIS

3. Classification on the basis of material used.

4. Classification on the basis of modus operandi.

On the basis of material used :-

External analysis:-

Outsiders, who don’t have access to the detailed internal accounting record of business

firm, do this analysis. These outside parties are potential investors, creditors, government

agencies & general public.

Internal analysis:-

The analysis conducted by person who has access to the internal accounting records of a

business firm is known as internal analysis.

54

On the basis of modus operand :-

Horizontal analysis:-

Horizontal analysis refers to the comparison, of financial data of a company for several

years. The figures of this type of analysis are presented horizontally over a number of

columns. This type of analysis is also called “dynamic analysis”.

Vertical analysis:-

This analysis refers to the study of relationship of the various items in the financial

statements of one accounting period. It is also known as “Static analysis “

55

Significance or importance of Financial Analysis :-

8. Significance for Managers ;-

Planning and Control are the two most important ingredients to a Successful

Business. A Business Plan takes most of the guess work out of Business Strategy and

Control through solid financial analysis. Financial Data provides a way to gauge where

you are in your Strategic Plan, telling you where changes in your Plan are necessary.

Because of this, Financial Data Analysis and Management are vitally important to

running a successful business.

9. Significance for Investors:-

Investors are generally considered one of the primary users of financial statements.

They use the financial statements to determine the current profitability of the firm and

attempt to predict its future profitability. Their interest is in the future growth of a

company's stock price and/or the likelihood of the company paying dividends to the

owner. 

10. Significance for Creditors:-

In the ongoing relationship between suppliers and a firms financial statement can play

several roles consider the relationship between a firm and the suppliers to its loan

capital. e.g a bank in the initial loan granting stage of the relationship, financial

statement typically are an important items.

56

11.Significance for regulatory agency:-

The demand by these bodies can arise in diverse set of areas such as revenue raising e.g

for income tax, sales tax ,value added tax collection. Govt. intervention e.g determines

weather to provide a govt. backed loan agreement to a financially distressed firm.

12.Significance for Employess:-

They are the part of the organization and feel that their effort contributed to the firm

profit they would there for prefers to give bonuses and salary increase this also increase

expenses of the firm.

13.Significance for others parties:-

The set of party that demand for financial analysis information of corporation is open

ended. diverse party such as academic ,environmental protection organization, and other

special interest lobbing groups approach cooperation for detail relating to their financial

and other affairs.

14. Significance for Government :-

Various ministries and department have interest in the firm’s payments of taxes. Also

sees the enactment of law for the industry and the provision of social service to the

57

public. The govt. may also want to ensure that the firm complies with the law on for

example wages payments and employees benefit.

Limitation of Financial Analysis :-

Though analysis of financial statement is essential to obtain relevant information for making

several decisions and formulating corporate plans and policies, it should be carefully

performed as it suffers from a number of the following limitations.

9. Mis lead the users:-

 

The accuracy of financial information largely depends on how accurately financial statements are

prepared. If their preparation is wrong, the information obtained from their analysis will also be

wrong which may mislead the user in making decisions.

10. Not useful for planning:-

Since financial statements are prepared by using historical financial data, therefore, the

information derived from such statements may not be effective in corporate planning, if

the previous situation does not prevail.

11. Qualitative aspects:-

Then financial statement analysis provides only quantitative information about the

company's financial affairs. However, it fails to provide qualitative information such as

management labor relation, customer's satisfaction, management skills and so on which

are also equally important for decision making.

12. Comparison not possible:-

58

The financial statements are based on historical data. Therefore comparative analysis of

financial statements of different years can not be done as inflation distorts the view

presented by the statements of different years.

5.  Wrong judgement:-

The skills used in the analysis without adequate knowledge of the subject matter may

lead to negative direction. Similarly, biased attitude of the analyst may also lead to wrong

judgement and conclusion.

6. Not helpful in price fixation:-

In financial accounting the cost is not available as an aid in determining prices of the

product services production order and product line.

7. Not control on cost:-

It does not provide for a proper control of materials and suppliers, wages. labors and

overheads.

15. No analysis of losses:-

It does not provided the complete analysis of losses due to defective material, idle time,

idle plant and equipment. In other words no distinction is made between avoidable and

unavoidable wastage.

59

.

PURPOSE OF FINANCIAL ANALYSIS

The purpose of analysis of financial statements depends upon the need of a person who

analysis these statements. These needs may be :-

7. To know the earning capacity or profitability.

8. To know the solvency.

9. To know the financial strength.

10. To make comparative study with other firms.

11. To know the capability of payment of interest & dividend.

12. To know the trend of business.

60

Following statements are including in the list of financial statements:-

7. Profit and loss account.

8. Balance sheet.

9. P & L appropriation account.

10. Cash flow statement.

11. Various schedules.

12. Explanatory notes given at the end of financial statement.

INCOME STATEMENT OR PROFIT &LOSS ACCOUNT

It is an important financial statement. It is a statement of revenues earned and the

expenses incurred.

NEED OF INCOME STATEMENT

1. To ascertain the cost of production, gross profit, gross loss/ net profit and net loss.

2. To ascertain the cost of goods sold and establishing its relationship with sales.

61

3. To ascertain the profitability of the business by establishing relationship of gross

profit and net profit with sales.

62

POSITION STATEMENT OR BALANCE SHEET

Balance sheet is a statement which presents the financial position of a business on a

particular date. It is prepared at the end of accounting period.

CHARACTERISTIC OF BALANCE SHEET:-

1. Balance sheet is prepared on a particular date and it shows the financial position

of business on that very particular date.

2. Balance sheet has two columns. It tells the relationship between Assets and

Liabilities and the total of both the sides are equal.

3. Balance sheet shows the financial position of a business on going concern value.

63

CASH FLOW STATEMENT:

A cash flow statement is a statement which summarizes the sources of cash inflows and

uses of cash outflows of a business enterprise during a particular period of time, say a

month or year. When cash flow statement is prepared, sources and uses of cash only are

taken in to account and even liquid assets like debtors and bill receivable are excluded.

since the idea of preparing this statements to summarize the impact of various transaction

on the cash position of the firm those transactions which result in increase of cash

position are termed as cash inflows and those which result in decrease of cash position

are the sources of cash outflows. In short, it may be said that a cash flow statement shows

the sources of cash receipts and the purpose of which payments are made.

Classification of Cash flows : According to as-3 (Revised)

A cash flow statement should be presented in manner that it report inflows and outflows

of cash by classifying them into three categories mainly operating, investing and financial

activities.

1. Cash flow from Operating activities :

Operating activities are the main revenue generating activities of an enterprise. As

such they include cash flows from those transactions and events which enter into

the ascertainment of net profit or loss of the enterprise.

Examples of cash flows arising operating activities are:

Cash receipts from sale of goods and rendering of services,

Cash receipts to suppliers for goods and services,

Cash receipts from royalties ,fees , commissions and other revenue,

Cash payments to and on behalf of employees,

Cash receipts or refunds of income taxes unless they can be specifically

identified with financing and investing activities.

64

2. Cash flow form Investing Activities:

Investing activities include the purchases and sale of long term assets such a land,

building, plant and machinery etc. not held for resale. These activities also include the

purchase and of sale investments which are not included in cash equivalents. Cash flow

form investing activities discloses the expenditures incurred for recourses intended to

generate future income and cash flows.

Examples of cash flow from investing activities are:

Cash payments to acquire fixed assets and also pay nets for capitalized research

and development costs and self constructed fixed assets.

Cash receipts from sale of fixed assets.

Cash payments to acquire shares warrants

Cash receipts from sale of shares warrants or debt instrument of other enterprise.

Cash receipts of interest and dividend.

3. CASH FLOW FROM FINANCING ACTIVITIES:

Financial activities are the activities that result in change in capital and borrowing of the

enterprise. Examples of cash flows arising from financial activities are;

Cash receipts from issuing shares or other similar instruments,

Cash receipts from issuing debentures, loans, notes and other short term or long

term borrowing.

Cash repayments of amount borrowed buy back of equity shares redemption of

reference shares, debentures notes, bonds etc.

Cash payment of interest and dividend.

65

TECHNIQUES OR METHODS OF FINANCIAL ANALYSIS:-

8. Comparative Statements.

9. Trend analysis

10. Common size Statements.

11. Fund flow statements.

12. Cash flow statements.

13. Ratio Analysis.

14. Break even point Analysis.

66

COMPARATIVE STATEMENT:-

This is a simple method for tracing changes in the financial performance of a company.

Comparative financial statements will contain items for atleast two periods. Changes –

increases and decreases – in income statement and balance sheet over period can be

shown in two ways:

(1) Aggregate changes

(2) Proportional changes

Drawing special columns for aggregate amount or percentage, or both, of increase and

decrease, can indicate aggregate changes. Recording percentage calculated in relation to a

common base in special columns, on the other hand, shows relative, or proportional

changes. An investigation of the comparative financial statements helps to highlight the

significant facts and points out the items which need further analysis.

• Trend Analysis

In financial analysis the direction of changes over a period of years is of crucial

importance. Time series or trend analysis of ratios indicates the direction of change. This

kind of analysis is particularly applicable to the items of profit and loss account. For the

trend analysis, the use of index numbers is generally advocated. The procedure followed

is to assign the number 100 to the items of the base year and to calculate percentage

changes in each item of other years in relation to the base year. This procedure may be

called as “Trend Percentage Method”.

• Inter- Firm Analysis

A firm would like to know its financial standing vis-à-vis its competitors and the industry

group. The analysis of the financial performance of all firms in an industry and their

comparison at agiven point of time is referred to as cross sectional analysis or theinter-

firm analysis. To ascertain the relative financial standing of a firm, its financial ratios are

compared either with its immediate competitors or with the industrial average.

67

• Performa Analysis

Sometimes future ratios are used as the standards of comparison. Future ratios can be

developed from the projected, or proforma financial statements. The comparison of the

current or past ratiosshows the firm’s strengths and weaknesses in the past and the

future.If the ratios indicate weak financial position, corrective actions can beinitiated

68

69

PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31TH MARCH,2009

PARTICULAR SCHEDULES

31.03.2009 31.03.2008

INCOMESales 2,47,52,66,4

802,57,89,34,907

Less: Excise Duty 7,08,28,579 10,04,27,026Other income 14 2,40,44,37,9

012,47,85,07,881

Increase/decrease in stocks

15 (11,78,78,966)

2,30,06,38,412

5,07,11,294

EXPENDITURE 6,98,57,067 2,59,90,76,242Raw material consumed and finished goods purchased

16 1,16,43,16,511

1,31,95,59,94,764

Manufacturing expenses

17 18,08,68,348

18,95,59,879

Payments and benefit to employees

18 20,91,85,795

22,60,92,498

Administration, selling and miscellaneous expenses

19 49,10,44,987

50,92,61,505

Interest & financial charges

20 12,56,40,916

Excise duty (92,32,509) (43,62,344)Depreciation 6 6,59,45,826 2,22,77,69,8

746,37,96,894 2,43,74,00,141

Profit before tax 7,28,68,538 16,16,76,101Provision for taxation

1,21,95,260 1,85,89,712

Current tax (1,19,38,000)

(1,83,17,902)

MAT Credit EntitlementFringe benefit tax 27,44,967 30,49,250Deffered tax (55,86,050) (21,58,570)Profit after tax 7,54,52,361 16,05,13,611Add/(less) : taxation adjustment of previous year (net)

(2,42,653) (52,84,920)

43,87,989Net profit for the year

7,52,09,708 15,96,16,680

Add: opening 32,86,59,77 22,90,16,680

70

`balance 7Net profit available for appropreation

40,38,69,485

38,86,59,777

APPROPREIATIONSTransfer to general reserve Balance carried over to balance sheet

6,00,00,000 6,00,00,000

Earning per share of Rs. 10/- each

343869485 32.86,59,7777

Basic 7 diluted 4.43 9.42Basic & diluted 4.44 7.95Basic & dulited (considering taxation for previous years)

4.41 9.37

BALANCE SHEET AS ON 31TH MARCH ,2009

71

PARTICULAR 31.03.2009 31.03.2008

SOURCES OF FUNDSShare holders FundsShare capital 17,04,00,000 Reserve & surplus

1,05,29,98,993 1,22,33,98,993 97,77,89,285 1,14,81,89,285

Loan FundsSecured Loans 82,65,32,740 1,03,31,65,87

3Unsecured Loans

19,03,29,914 1,01,68,62,654 17,49,91,716 1,20,81,57,589

Deffered TaxDeffered Tax Liability

6,52,89,687 7,08,75,737

Total 2,30,55,51,334 2,42,72,22,611APPLICAION OF FUNDS Fixed AssetsGross block 1,31,72,96,575 1,26,0640,151Less: Depreciation

47,08,47,571 40,60,66,799

Net Block 84,64,49,004 85,45,73,352Add: Capital Work in progress

12,92,181 84,77,41,185 1,54,92,360,87,00,65,712

Investment 20,33,98,812 20,33,98,812Currenent Assets,Loan & advance Inventories 67,27,25,412 76,18,73,108Sundry Debtors 70,43,22,494 72,41,47,983Cash & Bank Balances

5,14,67,849 4,49,26,777

Loans& Advances

28,16,65,313 27,49,86,325

1,71,01,81,068 1,80,59,34,193

Less: current liability provision

44,25,19,4171,32,50,314

42,93,74,4502,28,01,656

Net current assets

1,25,44,11,337 1,35,37,58,087

Total 2,30,55,51,334 2,42,72,22,611

72

COMPARATIVE INCOME STATEMENT

FOR THE YEAR ENDED 31 MARCH 2009,2008AND 2007.

31-Mar-09(12)

 31-Mar-

08(12) 

31-Mar-07(12)

 

   Net Sales (OI) Rs mn %OI Rs mn %OI Rs mn %OI   Material Cost 2404.44 100.00 2478.51 100.00 2221.52 100.00   Increase Decrease Inventories

905.59 37.66 1107.36 44.68 1116.30 50.25

   Personnel Expenses

447.72 18.62 220.38 8.89 -29.34 -1.32

   Manufacturing Expenses

209.19 8.70 226.09 9.12 212.33 9.56

Gross Profit 254.89 10.60 270.45 10.91 296.39 13.34   Administration Selling and Distribution Expenses

587.06 24.42 654.23 26.40 625.84 28.17

EBITDA 336.68 14.00 346.01 13.96 312.89 14.08   Depreciation Depletion and Amortization

250.38 10.41 308.22 12.44 312.95 14.09

EBIT 65.95 2.74 63.80 2.57 46.33 2.09   Interest Expense

184.43 7.67 244.42 9.86 266.62 12.00

   Other Income 125.64 5.23 133.46 5.38 88.17 3.97Pretax Income 14.08 0.59 50.71 2.05 16.67 0.75   Provision for Tax

72.87 3.03 161.67 6.52 195.12 8.78

   Extra Ordinary and Prior Period Items Net

-2.34 -0.10 6.45 0.26 24.02 1.08

Net Profit 0.00 0.00 4.39 0.18 0.74 0.03Adjusted Net Profit

75.21 3.13 159.62 6.44 171.83 7.73

Dividend - Preference

75.21 3.13 159.62 6.44 171.83 7.73

73

COMPARATIVE BALANCE SHEET STATEMENT :-

(RS Crores)

  Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05

Sources of funds

Owner's fund

Equity share capital 17.04 17.04 17.04 17.04 5.07

Share application money - - - - -

Preference share capital - - - - -

Reserves & surplus 105.30 97.78 81.82 64.63 57.13

Loan funds

Secured loans 82.65 103.32 104.03 48.81 22.11

Unsecured loans 16.44 15.06 22.02 21.45 31.45

Total 221.44 233.19 224.91 151.94 115.76

Uses of funds

Fixed assets

Gross block 131.73 126.06 110.55 79.70 66.50

Less : revaluation reserve - - - - -

Less : accumulated depreciation 47.08 40.61 35.55 31.22 27.39

Net block 84.64 85.46 75.01 48.49 39.11

Capital work-in-progress 0.13 1.55 8.14 0.92 0.24

Investments 20.34 20.34 17.10 6.43 4.02

Net current assets

Current assets, loans & advances 171.02 180.59 182.61 134.95 113.92

Less : current liabilities & provisions 54.70 54.75 57.94 38.84 41.55

Total net current assets 116.32 125.84 124.67 96.10 72.38

Miscellaneous expenses not written - - - - -

74

  Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05

Total 221.44 233.19 224.91 151.94 115.76

75

76

FINDINGS OF THE STUDY

1) Company is using WCDL (Working Capital draw down limit) for meeting short term requirement of cash.

2) The liquidity position of the company is better compared to previous year.

3) Company’s inventories position is better compared to previous year.

4) Profit of the company decreased drastically this year compared to previous year. Company is unable to reduce its fixed expenses.

5) The main focus is on the quality of the export goods. They give less attention to the needs of Indian customer. That’s why company is not able to increase its market share.

77

78

CONCLUSION

There is always a conclusion at end of any activity or training programmed. After consultation, reviewing the training period following are some conclusion regarding the Liberty Footwear:-

1. Windsor in males and Senorita in female are the most popular brands.

2. Liberty has gained more popularity comparatively in competition with other shoe companies.

3. Demand of Force-10 is very low among men footwear.

4. Demand of Gliders is very low among ladies footwear.

5. Maximum customers influences have preferred to watch Liberty advertisement between programmes.

6. Liberty has got the largest range and variety of shoes.

7. Main competitors of Liberty shoes are Action, Bata, Lakhani, Relaxo, Woodland, Phoneix and some local companies.

79

80

LIMITATIONS

Although every effort has been made to collect the relevant information through the

sources available, still some relevant information could not be gathered.

The time duration could not provide ample opportunity to study every detail of

management in the company.

There are restrictions not to visit some specific areas.

The concerned executives were having very busy schedule.

As some figures have not been disclosed by the company on account of

confidential report.

Estimates are based upon predictions.

81

82

SUGGESTIONS

Appended below are few suggestions:-

1. Company should produce more light weight chappals and sandals and should advertise it separately so as to attract the children.

2. Company should make their prices more competitive and should minimize the prices.

3. Company should increase the investments on advertisement as it has now become more effective.

4. Company should give emphasis on person attitude and perception while designing and advertisement because personal likings is more influencing factor among people.

5. Company should change its time schedule on TV according to the respondent preferences.

6. Company should give more emphasis on their slogan “SAPNEY AB HUE APNE “to make more effective.

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BIBLIOGRAPHY

BOOKS

Pandey, I.M., “Financial Management”, Ed. 2007, Vikas Publishing House Private Ltd., New Delhi.

Gupta, Shashi K., “Management Accounting”, Ed. 2007, Kalyani Publishers, New Delhi.

Manual

Annual reports

Websites www.libertyshoes.com www.libertyfreedom.com

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GLOSSORY

GROSS BLOCK

Definition of gross block "The total value of all of the assets that a company owns. Value is determined by the amount it cost to acquire these assets, and it is not decreased to take into account the effects of depreciation."

When you look at the Balance sheet of a company on the Assts side there is a head called fixed assets. If you go to the Schedule of Fixed assets in the first column will be all the fixed assets original cost i.e Land and building plant and machinery furniture’s and fixtures motor vehicle Office equipments total is called gross block and after deduction of depreciation the same is called NET block.

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