TABLE OF CONTENT

Chapter Description Page No.

1 INTRODUCTION. 7
1.1Introduction about training project. 8
1.2Meaning of financial analysis 9
1.3financial analysis system 10-11
1.4Generally Accepted Accounting Principles (GAAP) 12

2 OBJECTIVE OF THE PROJECT 13-14

3 RESEARCH METHODOLOGY. 15
3.1Research Process 16
3.2Sources of data collection 17-18
3.3Limitation of study 19
4 COMPANY PROFILE 20
4.1Introduction 21
4.2History of the company 22
4.3Social responsibility 23
4.4Group of company 24
4.5Promoter of the company 25
4.6Directors of the company 26
4.7Liberty brands
4.8Objective of the company
4.9National and international awards
4.10Units of Liberty Shoes Ltd.
4.11Organizational structure
4.12Manufacturing process of synthetic shoes in Liberty
Shoes Ltd

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5 INDUSTRIAL PROFILE 27
5.1 Indian footwear industry 28
5.2swot 29-31
5.3share in GDP 32
5.4Competitors 33-36
5.5Key production figures of top six footwear companies . 37
38
39
40
5.10Ten year figure at glance 41

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6 ABOUT THE TOPIC 43
6.1Qualitative Factors - The Company 44-47
6.2Qualitative Factors – The Industry 48-49
6.3Other Important Sections Found in Financial Filings 50-51
6.4Income statement 52
6.5Purpose of financial analysis 53
6.6Techniques or methods of financial analysis
6.7Procedure of financial analysis 54
6.8Cash flow statement 55-58
6.9Meaning of Balance Sheet 59-60

7 DATA ANALYSIS AND INTERPRETATION 61

7.1Profit & Loss A/c of 2007 62-63
7.2Profit & Loss A/c of 2008 64-65
7.3Profit & Loss A/c of 2009 66-67
7.4Balance Sheet as at 31th march, 2007 68
7.5Balance Sheet as at 31th march,2008 69
7.6Balance Sheet as at 31th march, 2009 70

8 FINDING 71-72

9 CONCLUSUION 73-74

10 LIMITATION 75-76

11 SUGGESTION 77-78

12 BIBLIPGRAPHY 79-80

13 ANNEXURE 81
13.1Gallosary 82

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3
4
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.

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.

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FINANCIAL STATEMENTS

Financial statements mean a statement or document which explains necessary financial

information about an organization/ company. the financial statements ae 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
Principles (GAAP).

TYPES OF FINANCIAL ANALYSIS

1. Classification on the basis of material used.

2. Classification on the basis of modus operandi.

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On the basis of material used :-

External analysis :-

Internal analysis :-

On the basis of modus operand :-

Horizontal analysis:-

Vertical analysis:-

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 Employess:-
6. Significance for others parties:-
7. Significance for Government :-

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Limitation of Financial Analysis :-

Mis lead the users:-

1. Not useful for planning:-
2. Qualitative aspects:-
3. Comparison not possible:-
4. Wrong judgement:-
5. Not helpful in price fixation:-
6. Not control on cost:-
7. No analysis of losses:-

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.

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 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.

4. Cash flow statement.

5. Various schedules.

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

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TECHNIQUES OR METHODS OF FINANCIAL ANALYSIS :-
1. Comparative Statements.

2. Trend analysis

3. Common size Statements.

4. Fund flow statements.

5. Cash flow statements.

6. Ratio Analysis.

7. Break even point Analysis

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11
OBJECTIVE OF THE PROJECT : -

The financial statements are the soures of information on the basis of which conclusions
Are drawn about the profitability and financial position of an organization/ company.
These statements helps 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 measures 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.

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8. To provide useful informations 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 thre years and the absolute changes
from one year to another two years and the absolute change in term of percentage.

13. To compare assets & liabilities and find out the any increase or deacrese 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 follow :-

Research problem

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

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Exentive 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

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.

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The present project is analytical in nature. The main objective of the analytical research
design is to define the problem into researchable one and analyse 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.

Analysis od data :

In this stage of research process the data is made in the tabulated wheather 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.

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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 : -

Actually no particulars questionnaire was prepared . question 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 are also made during the study by using standard
formulas.

LIMITATION OF STUDY

 The study was conducted in limited areas.

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 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.

 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 Begh New
Delhi. The liberty has its domestic branch office at Agra , Banglore, 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 wprld wide. The major strength of liberty
footwear is its strong distribution channel and itas technological advancement. Liberty is
devoted to the customer of the world and they strive hand to keep ture to there motto
,”SAPNE AB HUAE 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 throughtout 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 produce footwear for the entire family and is a trusted
name in many households across India and the 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 amongstthe 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 ,350excutive
showrooms andover 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 incorporated on 3rd sept.1986 as a public company and obtained the
company wof business on 11th March 1988. Firm register office of the companies

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situated at Delhi , Haryana and New Delhi. The company shifted its register 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, intergrity and respect for all those who come
in contact with it in course of business. Fully apprective 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. Utmpst 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

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 mechinebe 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 inceasing growth
rate of demand over the base several years.

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Future plan
Group has set up this company to expand its exciting capacity by more thantwo 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 products. The group plans to restructure its separation into integrated shoes
manufacturing and market organization.

Decision making
All the decision , which is 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
participating in decision making .their views recommendations and suggestion are given
due consideration. However the final authorities lies with top executive.

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GROUP OF COMPANY

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 acedic acid in India promotes Liberty organosys limited.
Liberty proposesto 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 bwe 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,Benglore,
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 company has plans of opening 18 more revolution showrooms
nationally & internationally.

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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 adventages. 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 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.

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BOARD OF DIRECTORS

 Mr. Adesh Gupta (CEO,Executive Director)

 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)

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 LIBRTY BRAND

Libety has developed a spectrum of 10 exclusive brands, each of which have been given
tha t 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.

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 FORCE-10
The flair, the style and ease that forces the world to
take notice. A happening range of 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.

 WARRIOR
Smart, stylish professional gear crafted from leather
uppers and direct injection P.U. soles with steel toe

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 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

BRAND
Force -10 Family force Sports & Canvas Gents
Leather
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 Canvas & Canvas & Children
children leather leather
Senorita Seniority Bellerion Leather Ladies
sandal

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Coolers Feel coolness Slippers sandals Leather Gents
Geo Sports Build Sports shoe Leather Gents & ladies
sportsmanship
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.

 To carry on business of manufacturing and 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.

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NATIONAL AND INTERNATIONAL AWARDS

The liberty group has won several prestigious national and international awards,
which are as under :

 Arch of Europe intertnational gold star, 1994.

 International award for ggd 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 garmants 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)

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CORPORATE OFFICE & HUMAN TECH CENTRE -11

LIBERTY COMPLEX, 17TH MILE STONE,

G.T. KARNAL ROAD, GHARAUNDA,

DISTT. KARNAL

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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37
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, 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

38
facilities 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 inladies 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 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

40
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 market brands including Florsheim (US), Lloyd
(Germany), Clarks (UK), Marks and Spencer (UK).

SWOT Analysis of Indian Footwear Industry:-

STRENGTHS: -

41
 • 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.
• 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.

42
 • Poor labour productivity. Lack of awareness about consistent in
plant training and retraining- Inconsistent quality high rejection rate
• 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
Share in GDP of footwear industry:-
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 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. ...

45
COMPETITORS

46
Companies Profile:
ADIDAS:Adidas ltd is a German sports apparel manufacturer and part of the Adidas
group,

47
which consist of Reebok sportswear company, Taylor Made-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

48
Bengal,
India
Relaxo: 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 millio

KEY FINANCIAL FIGURE OF TOP SIX FOOTWEAR

COMPANIES FOR THE YEAR 2007 -2008

49
COMPANY Paid up Promoters Net profit & Dividend EPS Return Offer Closing 52 week Gain/
NAME Eq. share contribution loss after tax its (%) (%) on Net price price Loss
capital (%) margin(%) Worth of last (%)
(Rs. (%) issue
In Cr.) (%)

BATA 64.26 51.02 47.44 5.47 20.00 7.38 22.56 30.00 167.55 179 76 458.5
Bata India .80 .0 0
0
Ltd.
LIBERTY 17.04 61.94 16.5 6.47 - 9.42 13.98 99.00 62.15 78. 32 25.55
Liberty 05 .3
0
Shoes Ltd.
MIRZA 18.54 64.65 3.61 2.84 15.00 0.39 2.84 60.00 14.00 18. 6. (53.33
Tanners 15 50 )
Ltd.
RELAXO 6.00 75.00 10.52 3.44 15.00 8.77 17.31 60.00 51.65 60. 24 72.17
Relaxo 00 .2
5
Footwear
Ltd.
SARUP 3.2 74.36 1.51 4.13 12.00 4.66 6.72 40.00 42.25 52. 21 5.63
Tunners 65 .1
5
Ltd.
SUPER 9.59 44.84 3.95 1.25 - 4.12 4.45 15.00 28.00 32. 15 86.67
HOUSE 50 .0
0
Super
House Ltd.

50
FINANCIAL ANALYSIS

51
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.

52
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 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.

53
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 types of analysisare presented horizontally over a number of
columns. This types 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 “

54
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 firm financaial 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 stageof the relationship,financial
statement typically are an important items.

55
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 determine
wheather to provide a govt.backed loan agreement to a finically distressed firm.

12. Significance for Employess:-

They are the part of the orgnisation and feel that their effort contributed to the firm
profitthey would therefor prefers togive bonusesnas salary inceresesthis also increase
expensies 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 corpartionfor 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
seet the enchment of lawfor the industry and the provision of socialservice to the public.
The govet may also want to ensure that the firm complies with the law on for example
wages payments and employees benefit.

56
 Limitation of Financial Analysis :-

lthough 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.

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.

8.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.

9.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 labour relation, customer's satisfaction, management's skills and so on
which are also equally important for decision making.

10. Comparison not possible:-

The financial statements are based on historical data. Therefore comparativeanalysis of

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

57
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.labours and
overheads.

15. No analysis of losses:-

It does not provided the complete analysis of lossesdue to defective material ,idle
time,idle palnt and equipment. In other words no distinction is made between avoidable
and unavoidable wastage.

58
 .

PURPOSE OF FINANCIAL ANALYSIS

The purpose os 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.

59
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 ia an important financial statement. It is a statement of revenues earned and the

expenses incurred.

60
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.

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

profit and net profit with sales.

61
 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.

62
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 us 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 sumarise the impact of various transaction
on the cash position of the firm those transctions 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.inshort , 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 andoutflows
of cash by classigying them into three categories manely operating , investing and
financial activities.

1. Cash flow from Operating activitites :

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

such they include cash flows from those tranctions 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 royalities ,fees , commissions and other revenue,
• Cash payments to and on behlf of employees,

63
 • Cash receipts or refunds of income taxes unless they can be specifically
identified with financing and investing activities.
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 acrivites also include the
purchase and of sale investments which are not included in cash equivalants. 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 asets.
• Cash payments to acquire shaes 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 activites 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 shaes or other similar instruments,
• Cash receipts from issuing debentures , loans, notes and other short term or long
term borrowing.
• Cash repayents of amount borrowed buy back of equity shares redemption of
reference shaes, debentures notes ,bonds etc.
• Cash payment of interest and dividend.

64
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.

65
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 help 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 isof crucial
importance. Time series or trend analysis of ratios indicate the direction of change. This
kind of analysis is particularly applicable
to the items of profit and loss account. For the trend analysis, the useof index numbers is
generally advocated. The procedure followed is toassign 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 baseyear. This procedures may be called as “Trend Percentage Method”.

66
• 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.

• 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

67
68
 PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31TH
MARCH,2009
PARTICULAR SCHEDUL 31.03.2009 31.03.2008
ES
INCOME
Sales 2,47,52,66,4 2,57,89,34,907
80
Less:Excise Duty 7,08,28,579 10,04,27,026
Other income 14 2,40,44,37,9 2,47,85,07,881
01
Increase/decrease in 15 (11,78,78,96 2,30,06,38,4 5,07,11,294
stocks 6) 12
EXPENDITURE 6,98,57,067 2,59,90,76,242
Raw material 16 1,16,43,16,5 1,31,95,59,94,7
consumed and 11 64

69
finished goods
purchased
Manufacturing 17 18,08,68,348 18,95,59,879
expenses
Payments and 18 20,91,85,795 22,60,92,498
benefit to employees
Administration, 19 49,10,44,987 50,92,61,505
selling and
miscellaneous
expenses
Interest & financial 20 12,56,40,916
charges
Excise duty (92,32,509) (43,62,344)
Depreciation 6 6,59,45,826 2,22,77,69,8 6,37,96,894 2,43,74,00,141
74
Profit before tax 7,28,68,538 16,16,76,101
Provision for 1,21,95,260 1,85,89,712
taxation
Current tax (1,19,38,000 (1,83,17,902)
)
MAT Credit
Entitlement
Fringe benefit tax 27,44,967 30,49,250
Deffered tax (55,86,050) (21,58,570)
Profit after tax 7,54,52,361 16,05,13,611
Add/(less) : taxation (2,42,653) (52,84,920)
adjustment of
previous year (net) 43,87,989
Net profit for the 7,52,09,708 15,96,16,680
year
Add: opening 32,86,59,777 22,90,16,680
`balance
Net profit available 40,38,69,485 38,86,59,777
for appropreation
APPROPREIATION
S
Transfer to general 6,00,00,000 6,00,00,000
reserve Balance
carried over to
balance sheet

Earing per share of 343869485 32.86,59,7777

Rs. 10/- each
Basic 7 diluted 4.43 9.42
Basic & diluted 4.44 7.95
Basic & dulited 4.41 9.37
(considering taxation

70
for previous years)

BALANCE SHEET AS ON 31TH MARCH ,2009

PARTICULAR 31.03.2009 31.03.2008

SOURCES OF
FUNDS
Share holders
Funds
Share capital 17,04,00,000
Reserve & 1,05,29,98,993 1,22,33,98,993 97,77,89,285 1,14,81,89,285
surplus
Loan Funds
Secured Loans 82,65,32,740 1,03,31,65,87
3
Unsecured 19,03,29,914 1,01,68,62,654 17,49,91,716 1,20,81,57,589
Loans
Deffered Tax

71
Deffered Tax 6,52,89,687 7,08,75,737
Liability
Total 2,30,55,51,334 2,42,72,22,611
APPLICAION
OF FUNDS
Fixed Assets
Gross block 1,31,72,96,575 1,26,0640,151
Less: 47,08,47,571 40,60,66,799
Depreciation
Net Block 84,64,49,004 85,45,73,352
Add: Capital 12,92,181 84,77,41,185 1,54,92,360,8
Work in 7,00,65,712
progress
Investment 20,33,98,812 20,33,98,812
Currenent
Assets,Loan &
advance
Inventories 67,27,25,412 76,18,73,108
Sundry Debtors 70,43,22,494 72,41,47,983
Cash & Bank 5,14,67,849 4,49,26,777
Balances
Loans& 28,16,65,313 27,49,86,325
Advances
1,71,01,81,068 1,80,59,34,19
3
Less: current 44,25,19,417 42,93,74,450
liability 1,32,50,314 2,28,01,656
provision
Net current 1,25,44,11,337 1,35,37,58,087
assets
Total 2,30,55,51,334 2,42,72,22,611

COMPARATIVE INCOME STATEMENT

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

31-Mar- 31-Mar- 31-Mar-
09(12) 08(12) 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 905.59 37.66 1107.36 44.68 1116.30 50.25
Inventories
Personnel
447.72 18.62 220.38 8.89 -29.34 -1.32
Expenses
Manufacturing 209.19 8.70 226.09 9.12 212.33 9.56

72
Expenses
Gross Profit 254.89 10.60 270.45 10.91 296.39 13.34
Administration
Selling and
587.06 24.42 654.23 26.40 625.84 28.17
Distribution
Expenses
EBITDA 336.68 14.00 346.01 13.96 312.89 14.08
Depreciation
Depletion and 250.38 10.41 308.22 12.44 312.95 14.09
Amortization
EBIT 65.95 2.74 63.80 2.57 46.33 2.09
Interest
184.43 7.67 244.42 9.86 266.62 12.00
Expense
Other Income 125.64 5.23 133.46 5.38 88.17 3.97
Pretax Income 14.08 0.59 50.71 2.05 16.67 0.75
Provision for
72.87 3.03 161.67 6.52 195.12 8.78
Tax
Extra Ordinary
and Prior Period -2.34 -0.10 6.45 0.26 24.02 1.08
Items Net
Net Profit 0.00 0.00 4.39 0.18 0.74 0.03
Adjusted Net
75.21 3.13 159.62 6.44 171.83 7.73
Profit
Dividend -
75.21 3.13 159.62 6.44 171.83 7.73
Preference

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 - - - - -

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 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05
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 - - - - -
Total 221.44 233.19 224.91 151.94 115.76

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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.

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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.

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 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.

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SUGGESTIONS

Suggestion are also very important after two month experience in any company or
organization. Appended below are few suggestion.

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

2. Company should makes 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 persons 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 respondents

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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GALLOSARY

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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