The Hindu Business Line : Bata India to utilise Rs 86 cr from securities premium account

As part of its financial restructuring programme, Bata India Ltd on Thursday secured shareholders' approval to utilise an amount not exceeding Rs 86.09 crore from its securities premium account for "adjustment of the debit balance of the Profit and Loss account as at December 31, 2005, miscellaneous expenditure as at December 31, 2005, and accretions thereto during the period January 1, 2006, to December 31, 2006".

The financial restructuring programme also entails payment to debtors up to a maximum of Rs 1.7 crore against the securities premium account.

Addressing shareholders at the company's 73rd annual general meeting held here on Thursday, Mr P.M. Sinha, Chairman of Bata India Ltd, said the financial restructuring programme was required to "clean up the balance sheet and allow us to consider payment of dividend" in the years ahead. This would require the confirmation of the Calcutta High Court and the entire exercise was expected to be over "certainly by Q4" of the current calendar year.

Bata India's accumulated losses as on December 31, 2005, stood at Rs 50.25 crore. The company posted a net profit of Rs 12.49 crore in 2005 after a gap of three years.

The company had reduced its borrowings and, therefore, its interest burden would go down from this year.

According to him, the focus now was on growing the retail business by taking initiatives such as introducing new products, reducing the number of cash drain stores and reinforcing the merchandising team. Besides remodelling 150 existing stores, 40 new stores would be opened up during 2006. The "superstore" concept would be introduced during the year, even as Bata India was keen to be a part of the "new mall concept". Talks in this regard were being held with several mall owners.

Mr Sinha said work on the Rs 1,300-crore Batanagar project was expected to begin in October this year and returns from the same would accrue to the company by 2008-09.

Spread over 262 acres of land, the project envisages building of residential blocks, modern housing for the company's employees, a hospital and a school.

During the year ended December 31, 2005, Bata India recorded a total income of Rs 752.87 crore against Rs 728.99 crore during the previous year. It recorded a net profit of Rs 12.49 crore in 2005 against a loss of Rs 62.74 crore in 2004.

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