Part A Industry Profile The Indian retail industry has experienced high growth over the last decade

with a noticeable shift towards organised retailing formats. The industry is moving towards a modern concept of retailing. The size of India's retail market was estimated at US$ 435 billion in 2010. Of this, US$ 414 billion (95% of the market) was traditional retail and US$ 21 billion (5% of the market) was organized retail. India's retail market is expected to grow at 7% over the next 10 years, reaching a size of US$ 850 billion by 2020. Traditional retail is expected to grow at 5% and reach a size of US$ 650 billion (76%), while organized retail is expected to grow at 25% and reach a size of US$ 200 billion by 2020. The US-based global management consulting firm, A T Kearney, in its Global Retail Development Index (GRDI) 2011, has ranked India as the fourth most attractive nation for retail investment, among 30 emerging markets. As Indias retail industry is aggressively expanding itself, great demand for real estate is being created. The cumulative retail demand for real estate across India is expected to reach 43 million square feet by 2013. Around 46 per cent of the total estimated demand between 2009 and 2013 will be come from Tier-1 cities. For instance, Pantaloon Retail added 2.26 million square feet (sq. ft.) of retail space during the fiscal 2011 and booked over 9 million sq. ft of retail space to fructify its expansion plans in future. Some of the key players in the Indian retail market, with a dominant share are: 1) Pantaloon Retail Ltd, a Future group venture: Over 12 mn sq. ft. of retail space spread over 1,000 stores, across 71 cities in India. 2) Shoppers Stop Ltd: Over 1.82 mn sq. ft. of retail space spread over 35 stores, in 15 cities. 3) Spencers Retail, RPG Enterprises: Retail footage of over 1.1 mn sq. ft. with approx 250 stores, across 66 cities. 4) Lifestyle Retail, Landmark group venture: Has approximately 15 lifestyle stores and 8 Home centres. Other major domestic players in India are Bharti Retail, Tata Trent, Globus, Aditya Birla More, and Reliance retail. Some of the major foreign players who have entered the segment in India are - Carrefour which opened its first cash-and-carry store in India in New Delhi. - Germany-based Metro Cash & Carry which opened six wholesale centres in the country. - Walmart in a JV with Bharti Retail, owner of Easy Day storeplans to invest about US$ 2.5 billion over the next five years to add about 10 million sqft of retail space in the country.

- British retailer Tesco Plc (TSCO) in 2008, signed an agreement with Trent Ltd. (TRENT), the retail arm of Indias Tata Group, to set up cash-and-carry stores. The Indian retail sector accounts for 22 per cent of the country's gross domestic product (GDP) and contributes to 8 per cent of the total employment. India continues to be among the most attractive investment propositions for global retailers. Cumulative foreign direct investment (FDI) inflows in single-brand retail trading, during April 2000 to June 2011, stood at US$ 69.26 million. Till now FDI up to 100 per cent was allowed for cash and carry wholesale trading and export trading under the automatic route, and FDI up to 51 per cent was allowed in single-brand products, with prior government approvals. However, the Government recently passed a cabinet note and permitted FDI up to 51% in multi-brand retailing with prior Government approval and 100% in single brand retailing thus further liberalizing the sector. This policy initiative is expected to provide further fillip to the growth of the sector. THE FUTURE Organized retail is a new phenomenon in India and despite the downturns, the market is growing exponentially, as economic growth brings more of Indias people into the consuming classes and organized retail lures more and more existing shoppers into its open doors. By 2015, more than 300 million shoppers are likely to patronize organized retail chains. The growing middle class is an important factor contributing to the growth of retail in India. By 2030, it is estimated that 91 million households will be middle class, up from 21 million today. Also by 2030, 570 million people are expected to live in cities, nearly twice the population of the United States today. Consumer markets in emerging market economies like India are growing rapidly owing to robust economic growth. India's modern consumption level is set to double within five years to US$ 1.5 trillion from the present level of US$ 750 billion. Thus, with tremendous potential and huge population, India is set for high growth in consumer expenditure. With India's large young population and high domestic consumption, the macro trends for the sector look favourable. Online retail business is another format which has high potential for growth in the near future. The online retail segment in India is growing at an annual rate of 35 per cent, which would take its value from Rs 2,000 crore (US$ 429.5 million) in 2011 to Rs 7,000 crore (US$ 1.5 billion) by 2015. For instance the Tata Group firm Infiniti Retail, that operates its consumer durables and electronics chain of stores under the 'Croma' brand, is in the process of tapping net savvy consumers. Similarly, the Future Group, that operates a dedicated portal Futurebazaar.com for online sales, has revealed that it is targeting at least 10 per cent of the company's total retail sales through the digital medium.

Company Profile a) Background and inception of the company

We were incorporated on July 10, 1996 under the name Subhikshith Finance & Investments Limited. In 1998 we were granted a certificate of registration by the Reserve Bank of India to carry on the business as an NBFC. In 2007 Subhikshith Finance was acquired by Future Value Retail Limited. The name Subhikshith Finance & Investments Limited was changed to Future Ventures India Private Limited, and after we ceased to be a private limited company, our name was changed to Future Ventures India Limited (FVIL) in 2007.
FVIL is part of Future Group, which was founded on a simple idea -- Rewrite Rules, Retain Values. Under the leadership of Mr. Kishore Biyani, Future Group began its pioneering journey 25 years ago to transform Indias Retail space and create a positive change in the communities, societies and business sectors in which it operates. Today, Future Group is an established leader in Retail through its multiple formats spread over 15 million square feet of retail space which service customers in 85 cities and 60 rural locations across the country. Around 220 million customers walk into Future Group-owned stores each year and buy products and services supplied by over 30,000 small, medium and large entrepreneurs and manufacturers from across India. Pantaloon Retail (India) Limited (PRIL), the flagship company of Future Group, has incubated, nurtured and brought to maturity several businesses and formats including Future Capital Holdings (FCH), Future Generali Insurance, Future Supply Chain, Future Agrovet, Future Media, Future Brands, Future Bazaar, Pantaloons, Central, Big Bazaar, Food Bazaar, Home Town and Ezone. FVIL seeks to create, build, acquire, invest in and operate innovative and emerging businesses in Indias consumption-led sectors, which we define as sectors whose growth and development will be determined primarily by the growing purchasing power of Indian consumers and their changing preferences, lifestyle, aspirations and spending habits. As at March 2012, we have in our portfolio 14 Business Ventures of which 7 are subsidiaries and 2 are joint ventures. We seek to access opportunities at various stages of the enterprise growth cycle, from nascent to more mature businesses, with a view towards medium to longterm value creation for our shareholders. FVIL has successfully completed the Initial Public Offering of its securities and raised Rs. 750 crore. The shares were listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited on 10th May, 2011.

b) Nature of business carried

c) Vision, mission and quality policy Vision Deliver Everything, Everywhere, Every time to Every Indian Consumer in the most profitable manner. Mission We share the vision and belief that our customers and stakeholders shall be served only by creating and executing future scenarios in the consumption space leading to economic development. We will be the trendsetters in evolving delivery formats, creating retail realty, making consumption affordable for all customer segments for classes and for masses. We shall infuse Indian brands with confidence and renewed ambition. We shall be efficient, cost- conscious and committed to quality in whatever we do. We shall ensure that our positive attitude, sincerity, humility and united determination shall be the driving force to make us successful.

Quality policy Future Group was founded on a simple idea: Rewrite rules, retain values. This fundamental belief created a new kind of marketplace, forever transforming Indian retail. Today our core values continue to guide how we do business and improve the quality of life of the people we serve. At Future Group we are committed to being a catalyst of positive change in the communities, societies and business sectors in which we operate. We envision Indias transformation into the legendary 'Sone Ki Chidiya' (golden bird), taking wings once again to reach greater heights. We take pride in our Indianness. Our belief in inclusiveness for long-term sustainable growth and economic prosperity evokes trust among consumers, employees, suppliers, partners, shareholders and the community. Values Indianness: Confidence in ourselves. Leadership: To be a leader, both in thought and business. Respect & Humility: To respect every individual and be humble in our conduct. Introspection: Leading to purposeful thinking. Openness: To be open and receptive to new ideas, knowledge and information. Valuing and Nurturing Relationships: To build long term relationships.

Simplicity & Positivism: Simplicity and positivism in our thought, business and action. Adaptability: To be flexible and adaptable, to meet challenges. Flow: To respect and understand the universal laws of nature.

d) Products/Services Profile Future Group comprises operating businesses in three sectors: Retail, Allied Services and Finance. Leveraging a strong understanding and knowledge of Indian consumer preferences, habits and aspirations, we have built some of the most respected retail brands in the country. Our retail business across the value and lifestyle segments focuses on 4 key consumption verticals: food, fashion, general merchandise and home. The stores offers a wide range of products including apparels for men and women, infant wear, accessories, cosmetics, footwear, sportswear, luggage, home linen and much more. Brand Factory hosts several Indian and International fashion brands including Levis, Pepe Jeans, Dockers, Wrangler, Provogue, Arrow, Nike, Adidas, Reebok, Louis Phillip, Allen Solly, Reid & Taylor, and Gini&Jony amongst others. e) Area of operation- national Future group has nation-wide operation. Brand factory has branches all over India. 1. 2. 3. 4. 5. Gujarat Maharashtra Andhra Pradesh Karnataka West Bengal

It has 18 branches in operation and 19th coming up in Bangalore. f) Ownership pattern

g) Competitors information
Arvind Brands aditya birla nuvo Reliance trends Max international

h) Infrastructural facilities i) Achievement/award j) Workflow model (end to end) k) Future growth and prospects 7s framework

Style
Kishore Biyani is the Managing Director of Pantaloon Retail (India) Ltd and the Group Chief Executive Officer of Future Group. Considered a pioneer of modern retail in India, Kishores leadership has led Pantaloon Retails emergence as Indias leading retailer operating multiple retail formats that cater to the entire basket of Indian consumers. Kishore Biyani led the companys foray into organised retail with the opening of the Pantaloons family store in 1997. This was followed in 2001 with the launch of Big Bazaar, a uniquely Indian hypermarket format that democratized shopping in India. It blends the look and feel of the Indian bazaar with aspects of modern retail like choice, convenience and quality. This was followed by a number of other formats including Food Bazaar, Central and Home Town. 2006 marked the evolution of Future Group that brought together the multiple initiatives taken by group companies in the areas of Retail, Brands, Space, Capital, Logistics and Media. Kishore Biyani advocates Indianness as the core value driving the group and the corporate credo Rewrite Rules, Retain Values. Regularly ranked among Indias most admired CEOs, he is the author of the book It Happened in India. He has won numerous awards from government bodies and the private sector in India and abroad and is on the board of a number of bodies, including the National Innovation Foundation in India and the New York Fashion Board.

Strategy A new normal is being defined in the Indian consumer market every day. With far-reaching socio-economic changes that India has undergone in the last decade, the drivers in urban and rural India are maturing fast. With a growth strategy tempered with localization and an inclusive business model, Future Group is the only pure play local retailer poised to lead Indias consumption story with sustainable value creation. Our multi-format retail strategy captures almost the entire consumption basket of Indian customers. As modern retail drives new demand, efficiency and consumption in new categories, our strategy is based on our deep understanding of Indian consumers. We understand the varied buying behaviour of the Indian consumer across regional ethnicities and are constantly innovating to craft strategies that address the subtle differences.

Future Group's strategy is aimed at achieving inclusive, sustained and profitable growth with three levers Customer orientation The bottom line in each of our retail success stories is "know your customer". Insights into the soul of Indian consumers - how they operate, think, dream and line - helps us innovate and create differentiating functionally. Continuous-innovation As India's largest retailer, we understand the importance of innovation. We rethink strategies and realign businesses with increasing agility to provide diverse customer groups with refreshingly different retail experiences. Collaborative transformation Creating a collaborative environment combining our strengths with our suppliers and vendors helps us create immense value for our customers which in turn fosters matual growth. We believe that modern Indian retail rests on the strength of two pillars scale and efficiencies. As front-runners in both areas, we firmly believe our core responsibility lies in providing protection to customers from the overall rate of inflation. While the scale and size of our operations helps us improve efficiencies, it also ensures we deliver greater value to our customers. Our retail thrust is focussed on four principal verticals of Food, Fashion, General Merchandise and Home. These four categories together account for nearly 65% of the consumption in the country and represent mass consumer aspirations. Acknowledging this, we are creating retail pure play through divestment and demerger of non-retail businesses to concentrate our efforts on these verticals. Indias retail boom is being driven by resurgence in the economy. Modern retail still has around 6% share of the total retail spend in the country, that is estimated at around US $ 400 billion. Thus, the potential for modern retail growth in India is huge. Currently, leading retailers in mature markets occupy the top three slots by turnover, employment and value creation. As the Indian economy matures, it is upon us to make the same happen in our country.

swot analysis Strength Pioneer in the industry and has largest market share and capitalization. Reputation for value for money(Competitive pricing), convenience and a wide range of products all in one store Presence in major cities Highly Strategic human resource management and development. It invests time and money in training people, and retaining them.

Most trusted and respected brand by the consumers Being financially strong helps pantaloons retail India deal with any problems, ride any dip in profits and out perform their rivals Development and Innovation are high at Pantaloons India with regards to it products and consumer preferences and lifestyle changes which keep its ahead of it competitors.
But, the emphasis at Brand Factory is to offer the customer the widest range of brands possible at absolutely great prices in an ambience that befits the brand. The Future Group clearly has the first mover advantage in this space and we plan to capitalize on this by scaling up fast across key cities. Focused marketing : With most retailers focusing either on top or the bottom of the urban pyramid, there is a huge middle that has been clearly ignored. This is the segment that we wish to tap through Brand Factory

Weakness Pantaloons does not function internationally, which has an effect on success, as they do not reach consumers in overseas markets. PRIL is the Worlds largest grocery retailer and control of its empire, despite its IT advantages, could leave it weak in some areas due to the huge span of control Since Pantaloons Retail India Ltd sell products across many sectors, it may not have the flexibility of some of its more focused competitors. Each business line faces competition from specialty companies. Fashion segment, Shoppers Stop, Trent, Lifestyle. In hypermarket-RPG (Spencers),Trent (Star India Bazaar) In Food business, Reliance Fresh, Spinach, Food World Opportunities Huge untapped market (The Indian middle class is already 30 Crore & is projected to grow to over 60 Crore by 2010 making India one of the largest consumer markets of the world) Organized retail is only 3% of the total retailing market in India. It is estimated to grow at the rate of 25-30% p.a. and reach INR 1, 00, 000 Crore by 2010. To take over, merge with, or form strategic alliances with other global retailers, focusing on specific markets New locations and store types offer PRIL opportunities to exploit market development.(Diversification into insurance , property, and variety of products and stores) Opportunities exist for PRIL to continue with its current strategy of large, super centres. Rural Retailing Threats Being number one means that you are the target of competition.(Extra competition and new competitors entering the market could unsteady pantaloons retail India). A slow economy or financial slowdown could have a major impact on pantaloons retail India business and profits. Consumer lifestyle changes could lead to less of a demand for pantaloons retail India products/services. Price wars between competitors, price cuts and so on could damage profits for pantaloons

retail India. The actions of a competitor could be a major threat against pantaloons retail India, for instance, if they bring in new technology or increase their workforce to meet demand Shopping Culture: Shopping culture has not developed in India as yet. Even now malls are just a place to hang around with family and friends and largely confined to windowshopping. If unorganized retailers are put together, they are parallel to a large supermarket with little overheads, high degree of flexibility in merchandise, display, prices and turnover.

Retail leadership in India through innovation and transformation Future Group offers new ways of thinking about retail and consumerism in India. We believe Retail must take the lead in renewing our economic growth trajectory. Leveraging the experience and insights gained in pioneering retail in India, we have developed a deeper understanding of the evolution of modern Indian retail and its role in driving sustainable economic growth. At Future Group, we believe in channelizing our energies to research-based innovation for generating value and delivering better experiences to customers. We are focussed on achieving sustainable business performance through the synergy of customers, communities and partners by ongoing learning, unlearning and adaptation. Our thinking delivers business value in 3 ways Knowing India the Indian way Embracing Indianness to conduct business across various socio-economic and demographic segments Integrating the traditional approach into modern-day retail to identify critical customer-value levers and game-changing trends in Indian retail Driving inclusive growth Thriving in an ecosystem that facilitates collaboration and inclusive growth as a sustainable economic growth model for India Creating fresh employment, impacting livelihoods, empowering local communities and fostering mutual growth Accelerating innovation Driving innovation with solutions that reconcile the interests of our business, the environment and other stakeholders Leveraging powerful research as a co-creation engine to harness consumption opportunities created by emerging urbanization and lifestyle trends Capital Budgeting Basics A company undertakes capital budgeting in order to make the best decisions about utilizing its limited capital. For example, if you are considering opening a distribution center or investing in the development of a new product, capital budgeting will be essential. It will help you decide if the proposed project or investment is actually worth it in the long run.

Identify Potential Opportunities The first step in the capital budgeting process is to identify the opportunities that you have. Many times, there is more than one available path that your company could take. You have to identify which projects you want to investigate further and which ones do not make any sense for your company. If you overlook a viable option, it could end up costing you quite a bit of money in the long term. Evaluate Opportunities Once you have identified the reasonable opportunities, you need to determine which ones are the best. Look at them in relation to your overall business strategy and mission. See which opportunities are actually realistic at the present time and which ones should be put off for later. Cash Flow Next, you need to determine how much cash flow it would take to implement a given project. You also need to estimate how much cash would be brought in by such a project. This process is truly one of estimating--it takes a bit of guesswork. You need to try to be as realistic as you can in this process. Do not use the best-case scenario for your numbers. Most of the time, you need to use a fraction of that number to be realistic. If the project takes off and the best-case scenario is reached, that is great. However, the odds of that happening are not the best on new projects. Select Projects After you look at all of the possible projects, it is time to choose the right project mix for your company. Evaluate all of the different projects separately on their own merits. You need to come up with the right combination of projects that will work for your company immediately. Choose only the projects that mesh with your company goals.

Implementation Once the decisions have been made, it is time to implement the projects. Implementation is not really a budgeting issue, but you will have to oversee everything to be sure it is done correctly. After the project gets started, you will need to review everything to make sure the finances still make sense.

Read more: http://www.finweb.com/financial-planning/the-basic-steps-of-capitalbudgeting.html#ixzz2KU8vtBUz

Objectives of the project

1. Determine the economic viability of new investment opportunities to ensure effective allocation of scarce financial resources 2. Ensure consistency between procedures for evaluating performance and methods of analysing projects 3. Provide the basis for future plans 4. Identify the steps involved in capital budgeting process. 5. Importance of investment decision

Type of the project The project is descriptive and analytical in nature Sampling Plan: There has been no sampling plan as such as the study involves understanding the various processes and analyzing them. The study involves the detailed analysis of secondary data collected from various sources and therefore no sample size and plan has been considered Data source:
Data has been collected from both primary and secondary source. Primary source: Information gathered by interview and discussing with the employees of finance department and my project guide. Secondary source Annual reports Manuals of finance department

Baneergata 14 stores big bazzar

Where is the new store coming up? Baneergatha road 2. How many locations were identified for setup of new brand factory store? Also mention locations.

12 locations were indentified

3.

Whether it was a replacement decision or expansion?

expansion 4. Whether the new store was leased, rented or purchased?

Leased

5. Which method was adopted for capital budgeting process by the firm?

6. Capital expenditure of the firm?

7. Operating expenditure?

8. Cash flows?