Global Country Study Report

On

Leather Industry of Ukraine

Business Opportunities for Gujarat and Uttar Pradesh
Submitted to
Institute Code: 755
Sardar Patel College of Administration & Management

Under the Guidance of

Dr. K.C.DWIVEDI
Assistant Professor
In partial Fulfillment of the Requirement of the award of the
degree of
Master of Business Administration (MBA)
Offered By
Gujarat Technological University
Ahmedabad
Prepared by:
Students of
MBA (Semester - III / IV)
Group No. 2
April, 2016

STUDENTS DECLARATION

We, following students, hereby declare that the Global/ Country Study Report titled
Leather Industry in Ukraine & Uttar Pradesh is a result of our own work and our
indebtedness to other work publications, references, if any, have been duly
acknowledged. If we are found guilty of copying any other report or published
information and showing as our original work, or extending plagiarism limit I
understand that we shall be liable and punishable by GTU, which may include Fail
in examination, Repeat study & re-submission of the report or any other punishment
that GTU may decide.

Enrollment No.

Name

147550592007

DHRUTIKA PARMAR

147550592009

ANKIT JAIN

147550592010

JAYKUMAR PATEL

147550592012

SARFRAJ MALEK

147550592014

NRIJAL PANCHAL

147550592015

ARPAN PARMAR

Place :SPCAM, Bakrol.

Signature

Date : ___/___/20__

Institute Certificate

It is certified that this Global Country Study Report Titled Leather Industry in
Ukraine & Uttar Pradesh is the bona fide work of attached student list with
enrollment numbers, who have carried out their research under our supervision. We
also certify further, that to the best of my knowledge the work reported herein does
not form part of any other project report or dissertation on the basis of which a
degree or award was conferred on an earlier occasion on this or any other
candidate. I/we have also checked the plagiarism extent of this report which is -----and the separate plagiarism report in the form of pdf file is enclosed with this.

Enrollment No.

Name

147550592007

DHRUTIKA PARMAR

147550592009

ANKIT JAIN

147550592010

JAYKUMAR PATEL

147550592012

SARFRAJ MALEK

147550592014

NRIJAL PANCHAL

147550592015

ARPAN PARMAR

Signature of the Faculty Guide

Signature of Director

Mr. dr. k.c.dwivedi

Dr. V.J.Dwivedi
Asst. Prof. SPCAM, ANAND.

Director SPCAM, ANAND.

PREFACE

The Global Country Study Report reveals in-depth analysis of various sectors of
Ukraine. The study is based on secondary data from authentic sources and the
findings of the present study show the possibilities of opportunities to improve
bilateral trade between Ukraine and Uttarpradesh. The present study covers the
research work done by group of six students of MBA Semester III of Sardar Patel
College of Administration & Management under the guidance of Assistant Professor
Mr. Umesh Singh for studying various aspects of different sectors as compare to
India (Uttarpradesh and Gujarat). This report is prepared as per the curriculum and
guidelines of Gujarat Technological University (GTU), Ahmadabad to get the
exposure of International market scope and opportunities.
We are deeply indebted to all authors, researchers and scholars and their
publications, government, non-governmental organizations and other publications
from which the data and information have been taken and therefore we as a group
are not claiming any originality so far. We here by acknowledge the valuable support
and guidance from our very respectful Director and our respective guides for their
valuable inputs and guidance for making this report more specific.
Sincere efforts are made to ensure the accuracy and authenticity of the secondary
data taken for preparing this global country report.

There is a famous saying The theory without practical is lame and practical without
theory is blind.

ACKNOWLEDGEMENT

I would like to acknowledge Vice chancellor of Gujarat Technological University Mr.

Akshay Agrawal for giving us an opportunity to get exposure and knowledge of
International market and global business through this Global Country Study Report.
We are also heartily thankful to GCR Co-coordinator Mr. Keyur Darji for his all time
support.
we would like to acknowledge and extend my heartly gratitude to our respective
faculty

dr. k.c.dwivedi for providing his valuable input and giving us the specific

direction for our study and he has stand like pillars for concrete global country study
report.

We would also like to thank Dr. Vashishthdhar Dwivedi, Director of Sardar Patel
Education campus, for his valuable guidance and support.

In last, we are very thankful to all those who directly or indirectly contributed to this
GCSR report.

INDEX

Sr.No

Contents

Pg.No
1-17

Summary of part-I
18-26

Description of Superhouse Group.

Swot analysis of Superhouse Group.

Description of Foot ware

Products/Services

27-28
28-32
32-39

Market segmentation
40-43

4ps analysis
44-47

Porters five forces for footware industry of

48-78

Import/export policies & procedures

79-82

Projected financial statements

83

10

Break Even Analysis

84-86

11

Finding & suggestions

12

Conclusions

13

87-88
89

Bibliography
90-97

14

Annexure

SUMMARY OF 3RD SEM

1. Introduction of Ukraine
Ukraine ( ) transliterated Ukrayina, is a country in Eastern Europe. Ukraine is a unitary
republic under

a semi-presidential

system with separate

: legislative, executive,

and judicial branches. Its capital and largest city is Kiev. Since the dissolution of the Soviet
Union, Ukraine continues to maintain the second-largest military in Europe, after that of
Russian Federation, when reserves and paramilitary personnel are taken into account. Prime
Minister of Ukraine is

Arseniy Yatsenyuk. The estimated population in 2015 estimate

44,429,471 (32nd)

Geographical location : At 603,628 square kilometres (233,062 sq mi) and with a coastline of
2,782 kilometres (1,729 mi).

Languages : Ukrainian (official language)

: 18 Recognized regional languages

Currency of is Ukrainian hryvnia (UAH).

Religions : 62% people are irreligious, 27% are eastern orthodoxy, 6% are catholic, 1% are
protestant, 1% are Muslim, 3% are of other religions.

National flag of Ukraine :

National anthem : Shche ne vmerla Ukraina "(Ukraine has Not Yet Died)

Economic scenario :

Reforming institutions, strengthening the economy after the crisis

In Soviet times, the economy of Ukraine was the second largest in the Soviet Union, being an
important industrial and agricultural component of the country's planned economy.

Adapting to Shifting Geographies of Demand in the Global Economy

Fostering Higher Levels of Value Creation in the Ukrainian Economy

Political Stability :

Institute for presidency became the core of development, political decision-making and political
control over their implementation. 2012 will be a time of V. Yanukovychs personal political
influence against the background of some groups strengthening positions within the
redistribution of property.

The traditional practice of using pre-election populist proposals will adversely affect relations
with the IMF which in turn will shorten the field of opportunities to attract large amounts of
foreign investment.

On 21 February 2014 an agreement between President Viktor Yanukovych and opposition

leaders saw the country return to the 2004 Constitution.

2. Overview of Industries, Trade and Commerce in Ukraine

The economy of Ukraine is an emerging free market, with a gross domestic products. Ukraine
covers about 2 major industries, namely power generating, fuel, ferrous and non-ferrous
metallurgy, chemical and petrochemical and gas, machine-building and metal-working, forest,
wood-working and wood pulp and paper, construction materials, light, food and others.
More than 60% of the exports goes to other former Soviet Republics countries with Russia,
Kazkhstan and Belarus being the most important. Others include Turkey and China.
Exports in Ukraine decreased to 3087.10 USD Million in August from 3149.17 USD Million in
July of 2015. Exports in Ukraine averaged 3758.20 USD Million from 2001 until 2015, reaching
an all time high of 7616.80 USD Million in July of 2008 and a record low of 1215.20 USD Million
in January of 2002.

List of 23 Industries
Agriculture, Apparel, Automobiles and motorcycle, Chemicals, Construction, real estate,
Electrical equipment supplies, Food beverage, furniture furnishing
general industrial equipment, health medical, home garden, manufacturing
machinery, minerals metallurgy, packaging paper, steel, home

appliances, information

technology, fuel, infrastructure, tourism, financing, banking, aircraft.

Contribution of industries/sectors in national GDP

GDP (PPP)
GDP per capita
GDP (NOMINAL)
GDP per capita

$341.489 billion (2015 est.)

$7,989 (2015 est.)
$90.138 billion (2015 est.)
$2,199 (2015 est.)

Agriculture
Industry
Services

9.9%
29.6%
60.5%

& processing

Export Import statistics

IMPORT-EXPORT

Imports

Last

Reference

Previous

Highest

3879.50

Aug/15

2983.70

8822.90

Aug/15

3149.17

7616.80

USD Million
Exports

3087.10
USD Million

External Exports
Export partners

$71.14 billion

: EU 28.7%
Turkey 5.4%

Imports

Import partners

Russia 25.6%
Egypt 4.2%

$87.21 billion
EU 39.1%

Russia 32.4%

China 9.3%

Germany 8.0%

Belarus 6.0%

Poland 4.2%

3. Overview of leather industry in Ukraine

There are nearly thirty tanneries in Ukraine now. Also there are a lot of small and medium-size
enterprises consuming locally produced finished leather 50-70% of their production being
exported abroad. Almost a quarter of total soviet footwear output was produced in Ukraine
about 180-200 million pairs per year.
In 2013 Ukraine export Leather Footware to Russia 29%, Italy 26%, Romania 9.3%, Poland
4.6%, Belarus 3.9%, Austria 5.3%, Slovakia 1.9%, Denmark 5% and in Kazakhstan 5.4%.
These business operates in two direction : one is the production of its own models of shoes (the
firm purchases raw materials, manufactures and sells its products through intermediaries), the
second are give and take orders ( customer provides raw materials). Mainly medium and
upper-medium price niches are occupied by local footwear manufacturers.
The volume of the Ukrainian shoe market does not exceed $2 billion, according to the Ukrainian
League of Shoe Manufacturers, Leather Goods and Furs, with a 70 percent share taken up by
foreign suppliers.1,500 shoe factories across Ukraine.

Justification for leather industries

India/Gujarat

in terms of bilateral trade opportunities with

The leather industry occupies a place of prominence in the Indian economy in view of its
massive potential for employment, growth and exports. There has been an increasing emphasis
on its planned development, aimed at optimum utilisation of available raw materials for
maximizing the returns, particularly from exports. The exports of leather and leather products
gained momentum during the past two decades.

Details of leather industries w.r.t. Gujarat

The leather industry has very good potential because Gujarat has the second highest population
of cattle. We have not been able to exploit this potential due to lack of intermediary processing
facilities. To streamline the leather activities, various programs like upgradation of tanneries,
5

providing training to unemployed youth for skill development and upgradation, and marketing
facilities have been chalked out.

Sub segments of the leather industry

The leather industry is spread in different segments. Namely, tanning & finishing,
footwear & footwear components, leather garments, leather goods including saddler and
harness etc.

Major players of leather industry and sub segments

1. ANUJ ENTERPRISES , BARODA
2. WELTERMAN INTERNATIONAL LTD , MANJUSAR
3. ROTO SCREENTECH PVT LTD , RAJKOT
4. CONDOR FOOTWARE INDIA LTD , SURAT
5. HETAL IACE TRADING COMPANY , SURAT
6. HIGH TECH SHOES PVT LTD , VADODARA
7. KHUSHI ENTERPRISE , AHEMDABAD

Local taxes and duties applicable in leather industry

1. Customs Duty 10%
2. Central Excise Duty 10-12%

Social benefits given by state govt. to the leather industry

The scheme is aimed at enabling existing tanneries, footwear, footwear components and leather
products units to upgrade leading to productivity gains, right-sizing of capacity, cost cutting,

design and development simultaneously encouraging entrepreneurs to diversify and set up new
units.

STEEPLED Analysis of Leather Industry in Ukraine & Gujarat

SOCIAL

Technology

UKRAINE

GUJARAT

As a Volunteer in Ukraine, you will

receive three types of allowances.
The first, a monthly living
allowance, is intended to cover
your basic living expenses; that is,
food, household supplies, clothing,
official travel, recreation and
entertainment,
transportation,
reading material, and other
incidentals

Create
a
leather-shoe
producing social business
to train and Employ people
with disabilities.

Utilizing
the
most
modern
technology and latest machinery,
we have emerged as the foremost
Leather Cloth Manufacturers and
Suppliers of a wide assortment.
We are blessed with a team of
trained
researchers
who
researches on latest technologies
to make the quality products.

Development of a practical
database
of
clean
technologies for the leather
industry. Development of
networks of experts on
clean technology for the
leather industry.

G D P real growth rate:0.4%.

GDP - per capital (PPP)- Per capita $7,989

Gujarat leather industry has

witnessed robust growth,
transforming from a mere
raw material supplier to a
value-added
product
exporter. In fact, today,
almost 50 per cent of
India's leather business
comes from international
trade.

ECONOMICAL

ETHICAL

POLITICAL

This has been pressurelized by

enactment of some laws aimed at
ensuring that businesses operate
within some ethical principle which
defines the limits of their operation.
In broader description, business
ethics can be normative or
descriptive.

H&M does not accept rabbit

hair, including angora rabbit
hair. H&M only accept hair
from living and domesticated
animals including but not
limited to goat, alpaca, llama,
camel, cow, buffalo, yak,
horse and pig.

Ukraine is a republic under a mixed

semi-parliamentary
semipresidential system with separate
legislative, executive, andjudicial
branches.

This paper analyses the far

reaching impact of these
environmental regulations on
export sector of Indian
Leather Industry.

Legal system: civil law system;

judicial review of legislative act.

Inherited most of its principles from

the court system of the Soviet
Union and the Ukrainian SSR, the
court system of Ukraine is slowly
being restructured. Although judicial
independence exist in principle, in
practice there is little separation of
juridical and political powers.

Leather
may disclose
information when legally
compelled to do so; in other
words, when we, in good
faith, believe that the law
requires it or for the
protection of our legal rights.

In leather manufacturing, one of the

first steps is the removal of hair
from the hides using a
disintegration agent such as sulfide.
This organic waste accumulates in
the wastewater sent to the local
purification plant.
ENVIRONMENTAL
Science has developed a new
process that reduces the residue
from unhearing by 50%.

Leather
Industrial
Cooperative
societies
are
eligible.
Having
own
land
for
construction of tannery &
flaying centers.
Must
get
Environment
Clearance Certificate as per
notification
dt.14-9-2006
from Ministry of Forest &
Environment
Department,
New Delhi & No Objection
Certificate from Pollution
Control Board.

LEGALITY

Population of Ukraine is decreasing

continuously
from
(2004
to
2014).The total population in
Ukraine was last recorded at
DEMOGRAPHICAL
42545059 (42.5 million) people in
2013 from 42.8 million in 1960 and
sex ratio is 101 males to 100
females.

Population of Gujarat is As
per 2015 census 65,105,237
and the male population is
31,482,282
and
female
population is 28,901,346 and
sex ratio is 100 males to 92
females.

SWOT Analysis of Ukraine & Gujarat

Ukraine
Strengths

Weaknesses

Gujarat

Established manufacturing
base
Extensive
industry
experience
Low
maturity
of
-poor quality of wool and
manufacturing
hides
-low
level
of
Slow adaption to global
competitiveness -lack of
fashion trends
investments into industry
availability of transport and
energy infrastructure

Opportunities

-development of industries
of raw materials processing
(cotton, wool, leather)
-development of tolling
manufacture

Threats

-lack of investments into the

sector
-strengthening
of
the
expansion of smuggling and
counterfeit goods
-high competition with the
world leaders

Shift in global manufacturing

base, from developed to
developing countries
-Capability to move up the
value chain
Potential threat of
companies from competing
nations such as China,
setting up manufacturing
facilities in India, negating
the value-proposition of
Indian players

OVERVIEW OF UTTAR PRADESH

The

state

is

bordered

by Rajasthan to

the

west, Haryana and Delhi to

the

northwest, Uttarakhand and the country of Nepal to the north, Bihar to the east, Jharkhand to
the southeast, Chhattisgarh to the south and Madhya Pradesh to the southwest. It covers
93,933 square miles (243,290 km2), equal to 6.88% of the total area of India, and is the fourth
largest Indian state by area. With over 200 million inhabitants in 2011, it is the most populous
state in the country as well as the most populous country subdivision in the world. Hindi is the
official and most widely spoken language in its 75 districts. Uttar Pradesh is the fourth largest
Indian state by economy, with a GDP of 7080 billion (US$110 billion). Agriculture and service
industries are the largest parts of the state's economy. The service sector comprises travel and
tourism, hotel industry, real estate, insurance and financial consultancies.
Transportation : Highways in Uttar Pradesh, airports in Uttar Pradesh and Uttar Pradesh State
Road Transport Corporation, railway transportation

Industries : Information technology, agro processing, tourism, mineral-based industries,

textiles, handloom and handicrafts, food processing and sports goods.

Economy of Uttar Pradesh

Contribution in GDP
In below table of states and union territories of India by their nominal GDP for the financial
years 2005-06 to 2013-14, released by Planning Commission of India, in local currency.
Revised data for the past years differ from the tables below. Due to the slide in INR/US
Exchange from 2011-2013, GDSP has grown in local currency terms but often roughly flat in
USD terms. INR rates have varied over the years; as of Jan 1, 2014 it has temporarily stabilized
at roughly 62 Indian rupees per USD.

10

Particulars

UP

India

Net domestic Product (at factor cost) (Rs

316905

4493743

Contribution of Agriculture to GDP(%)

25.01

14.62

Contribution of Industry to GDP(%)

14.66

20.16

Contribution of services to GDP(%)

60.34

65.22

crores) (For state)

Major Players of Leather Industry:

-

Khadims

Bhartiya Group

Crew B.O.S. Products Limited

Kings International Ltd

Acknit Industries Limited

Aliza Exports Private Ltd

Calico Trends

Drish Shoes Ltd

Hidesign

Super Tannery Ltd

Taxes and duties-

Customs Duty will remain at 10%.

Excise duty is 10-12%.

11

Findings in terms of comparative analysis of Leather industry in Gujarat,

Ukraine and Uttar Pradesh
Parameter

Ukraine

Uttar Pradesh

Gujarat

42,813,557

199,581,477

60,383,628

177.4 billion USD

8,62,746 USD

11832.85 USD

Currency

Ukrainian Hryvnya

Rupees

Rupees

Exchange

0.047 USD

0.02 USD

0.02 USD

Coal, Electric Power,

IT, Agro processing,

Gas &Petroleum,

Machinery, Chemicals,

Tourism, Minerals

Tourism, Minerals &

Pharmaceuticals,

based Textiles,

Minings, Port

Tourism, Agriculture, IT

Handloom &

Infrastructure,

and Infrastructure.

handicrafts and Sports Biotechnology &

Population
GDP
(Nominal)

rate
Major
Industries

Goods.

Pharmaceuticals,
Textiles and IT.

Strengths

Availability of

Elevated

Established

raw materials

growth readily

manufacturing

Proximity to

available,

base.

major markets

highly skilled,

(Russia, China,

and cheap

industry

India)

labor force

experience

Increasing

Significant

Extensive

Availability of

demand on

raw material

labor at

domestic and

availability

competitive rates.

international

The initiatives

Governments

markets

taken by the

initiatives to

Availability of

Government

facilitate growth

transport and

for the change

12

energy
infrastructure

in the Policies

Capability to

Availability of

incorporate

production

new

capabilities

technologies

relatively cheap

required and

labour force

to handle large

(south)

projects

Emphasis is
given to
continuous
design up
gradation &
product
development

Weaknesses

Poor quality of

Low maturity of

support from

manufacturing

Low level of

the

and business

competitiveness.

government in

processes.

Lack of

terms of

investments into

warehousing.

global fashion

The

trends.

Slow adaption to

High share of

fluctuation in

exports of goods

International

economies of

with low added

pricing.

scale due to

The large size

fragmented

Lack of domestic

of work force

structure.

brands.

is resulting in

Lack of qualified

increased

personnel

wages.

value.

Lacking

wool and hides.

industry.

significant

13

Lacking

Lack of

depreciation of

strong

fixed assets.

presence in the
global fashion
market.

Unaware of
International
standards.

Opportunities

Expansion of the

Shift in global

accelerate in

manufacturing

entry into the

the domestic

base, from

EurAsEC.

market.

developed to

Cultivating

developing

industries of raw

fashion

countries.

materials

awareness

processing

globally.

move up the

Using decision

value chain.

Development of

Capability to

leather).

support

Development of

software(DSS)

viable alternative

Software

to China.

tolling

Potential to

market due to

(cotton, wool,

Considered as a

manufacture.

Asset

Transfer of

Management

anti-dumping

technologies

(SAM) &

duty on

through the

information

competing

organization of

technology

nations.

manufacturing

would help in

using the

eradicate the

experience of the

length of the

technological

production

leaders.

cycle required
for different
products.
14

Imposition of

Threats

The level of

Industry is

Mounting

manufacturing

unorganized in

competition from

domestic.

major parts.

South East Asian

The scope is

countries in the

below the

limited for

low-mid

threshold level of

mobilizing

segment, and

economic

funds through

from Europe in

security.

public issues

high end

Lack of

& private

segments.

investments into

placements

the sector.

(many of the

companies from

Strengthening of

businesses are

competing

the expansion of

owned by

nations such as

smuggling and

family).

China, setting up

The difficulty

manufacturing

goods.

of retrieving

facilities in India,

High competition

bank loans is

negating the

with the world

resulting in

value-proposition

leaders.

costly private

of Indian players.

Products are

counterfeit

borrowing.

15

Potential threat of

Comparative Analysis of Bilateral Trade Opportunities in Leather

Industry in Ukraine, Uttar Pradesh, and Gujarat
Ukraine

Uttar Pradesh

Gujarat

The leather tanneries can do There is big demand for raw It

export their finished leather leather
to Ukraine buyers.

to

produce

has

second

largest

the population of cattle, so it

leather products.

has wider scope to export to

Ukraine.

BADER name stands for There is opportunity to The requirement of raw

premium quality of leather export better quality of leather can be fulfilled by
in the Automobile industry. leather to Ukraine buyers.

Gujarat and can import the

They have requirement of

premium Kollamat leather

premium quality of raw

for

leather.

manufacturer.

Ukraine requires advanced Machineries

can

Automobile

be Development of a practical

technology and machineries produced in UP and export database

of

clean

for cleaning, processing and it to the leather tanneries of technologies for the leather
waste water control.

Ukraine.

industry. Development of
networks

of

experts

on

clean technology for the

leather industry.
There is a big demand for The major shoes brands of Leather
branded leather shoes and India
accessories.

can

tanneries

made

in

capture

the Gujarat like Bharwadi and

Ukraine

market.i.e.

Red Desijoda which is made by

Tape,

Bata,

Khadims, lakhani
Ukraine

shoes

Liberty, vegetable leather can be

exported to Ukraine.

are The raw leather can be Gujarat is capable to fulfill

16

suffering from shortage of processed and cleaned in the

raw leather.

requirement

tanneries and then sell it to leather.

the buyers.

17

of

raw

Super House group

Superhouse Group is a conglomeration of several companies engaged in manufacturing and
export of finished leather, leather products and textile garments. The parent company,
Aminsons Leather Finishers Pvt., was incorporated as private limited company on January 14,
1980. It was converted into a public limited company on December 22, 1984 and its name
changed to Aminsons Limited on February 21,1989. In addition, five group companies - Super
House Limited, Super Garments Limited, Sharp Leathers Limited, Super Footwear Limited and
Allen Shoes Limited - were merged with Aminsons Limited in 1994, 1995 and 1996 as per the
orders of the Honble High Court of Judicature, Allahabad. The name of the company was
changed to Superhouse Leathers Limited on March 4,1996 and finally Superhouse Limited on
November10, 2006 with the approval of the Registrar of Companies, Kanpur (U.P.).

From a single tannery in the 1980s producing finished leather, Superhouse Group has emerged
as one of the largest players in the industry. We started with a commitment to excel, achieve
and deliver the very best. Towards this end, we engineer, optimize and control every phase of
the manufacturing process from raw material to finished products to ensure that end products
are of the highest quality and also the best value for money for our clients.

The Group have four overseas companies in the UK, the U.S.A., the U.A.E. and Romania
primarily engaged in marketing and distribution of leather, leather products and textile garments.
The group has crossed an annual turnover of Rs. 4,000 million.
The Group has 15 manufacturing units located in Kanpur, Unnao, Agra and Noida
The turnover of Superhouse Group is more than USD 200 million for the financial year ending
as on 31stMarch 2015, under the efficient leadership of Mr.Mukhtarul Amin.
Mr.Mukhtarul Amin was the Vice Chairman of Council for Leather Exports for 2 years i.e. 2003
to 2005 and Chairman of the Council from 2007 to 2009. Council for Leather Exports is an

18

export promotional body under the Ministry of Commerce and Industry, Government of India.
During the tenure as Chairman of Council for Leather Exports, Mr. Amin had an ambition to see
the growth of leather industry of India. Exports had touched a level of USD 3.05 billion,
recording a growth of 11.15 percent over the previous year 2005-06. Exports went on increasing
to USD 3.54 million during his tenure.
Mr.Mukhtarul Amin was appointed as the Chairman of Footwear Design & Development Institute
(FDDI), Noida in the year 2003 for a period of three years. FDDI is the largest footwear-training
institute in the world having 7 campuses located in Kolkata / Fursatganj / Chennai / Chindwara /
Rohtak / Noida and Jodhpur. It was during his tenure that the FDDI Jodhpur centre was
established. During the same period he took approvals for centres in Patna and Hyderabad and
got the construction work initiated.
Mr. Amins aim to help the leather industry in Unnao and Kanpur took him to establish a world
class Testing Laboratory and Training Centre. To achieve this, he established a company
backed by leather industry of Kanpur and Unnao, which is known as Kanpur Unnao Leather
Cluster Development Company Limited. This company has taken up establishment of world
class Testing Laboratory and Multi Skill Development Centre in Kanpur under ASIDE Scheme.

19

INTRODUCTION ABOUT SUPER HOUSE

Superhouse Group is a conglomeration of several companies engaged in manufacturing and
export of finished leather, leather products and textile garments. The parent company,
Aminsons Leather Finishers Pvt., was incorporated as private limited company on January 14,
1980. It was converted into a public limited company on December 22, 1984 and its name
changed to Aminsons Limited on February 21, 1989. In addition, five group companies Super
House Limited, Super Garments Limited, Sharp Leathers Limited, Super Footwear Limited and
Allen Shoes Limited were merged with Aminsons Limited in 1994, 1995 and 1996 as per the
orders of the Honble High Court of Judicature, Allahabad.
The name of the company was changed to Superhouse Leathers Limited on March 4, 1996 and
finally Superhouse Limited on November 10, 2006 with the approval of the Registrar of
Companies, Kanpur (U.P). From a single tannery in the 1980s producing finished leather,
Superhouse Group has emerged as one of the largest players in the industry. We started with a
commitment to excel, achieve and deliver the very best. Towards this end, we engineer,
optimize and control every phase of the manufacturing process from raw material to finished
products to ensure that end products are of the highest quality and also the best value for
money for our clients.
The thirst for ambition to see Superhouse Group to acquire the multinational entity continued
and he established subsidiary companies and depots in overseas countries. The company has
incorporated a wholly owned subsidiary in United Kingdom in the name of Superhouse (U.K.)
Ltd. in March98 having its registered office in London, which is primarily engaged in the
marketing and distribution of leather and leather products. The group also has two more foreign
subsidiaries, involved in trading of leather products primarily of parent company, namely
Superhouse (USA) International Inc., USA and Superhouse Middle East F.Z.C., in U.A.E. In
May 2011, the group acquired Briggs Industrial Footwear Limited, a U.K. based company
incorporated in 1944. One more company named Linea de seguridadsl in Spain was acquired in
Aug 2012. Both these companies are engaged in the marketing/production of safety footwear.

20

OVERVIEW
SuperhouseGroup, is a multi-unit and multi-product conglomerate with brand leadership in the
field of footwear manufacturing and exports. The Group is well equipped with the most modern
machineries and a specialized workforce and produces all types of quality leather, leather goods
and textile garments that are appreciated all over the world.
A US $200 million group, Superhouse Group has 18 units, with a workforce of over 5000 and a
presence in more than 35 countries. Our commitment to quality is reaffirmed by our ISO 9002
certification. Stringent EN 345-norms make us one of the most respected manufacturers
amongst importers from European countries. Being equipped with requisite infrastructure and
strict adherence to high standards of quality, we are able meet CSA, ANZ & and SABS
standards.
A perfect blend of highly technical, skilled and semi-skilled workforce and competent managers
has helped us in carving out an enviable position for ourselves in the global market.
Nine state-of-the-art units involved in manufacturing footwear and Shoe accessories.
Four modern tanneries provide us with the finest quality leather for our footwear production. To
meet the exacting demand of clients we also import leather from Brazil, Italy and Columbia.
The Group has two leather goods manufacturing units for Leather Accessories and Garments
The Group is also engaged in the manufacturing and export of Readymade Garments, Riding
Products and Pet Products
All of our manufacturing units are ably backed by our marketing offices strategically located in
the USA, the UK, the UAE, Spain, Germany and Romania.
In addition, we are approved vendors for global brands such as Wal-Mart, Filanto, Auchan,
Andre, Shoe Fayre, Hudson Bay, HeckelSecurite, Secura and many more.
Our existence in the trade for over three decades has given us a wealth of knowledge, which
allows us to offer our customers the maximum in choice, value and quality.
In the last decade the group spread its wings in the field of Education, Real Estate and Retail.
21

VISION & MISSION

TO BE A LEADER THROUGH EXEMPLARY COMMITMENT
Superhouse stands firm in its resolve to be a leader- a name to reckon with, in the international
arena. We also stand committed to meet our customers expectations in terms cost and quality.
Again, this commitment continues to be our credo, but we still have a long way to go, true to the
saying.
The last four decades have been dedicated to building strong foundations for Superhouse brick
by brick: from infrastructure to technology, from solid relationships with employees to market
acceptance.
We are now poised to take the next giant leap to establish ourselves as the undisputed leader
in leather products be it footwear or finished leather or leather accessories.
Retaining our leadership through growth as a consequence of customer satisfaction is of
paramount important to us.
To achieve our vision, the framework for quality inputs and , processes is in place, and is
constantly monitored and upgraded.
Superhouse Group aims to constantly improve the quality of its products by fulfilling its
Customers Expectations.

22

SOCIAL RESPONSIBILITY
Besides business development which is an ongoing process, Superhouse is also way ahead in
fulfilling its social obligations towards nation building.
Also, as a step towards creating a better tomorrow, the group promoted the first COMMON
EFFLUENT TREATMENT PLANT in the state of Uttar Pradesh in the year 1993 with the
assistance of the World Bank and the Government of Uttar Pradesh. This initiative was a major
step towards maintaining the ecological balance.
The Group promoted a Common Effluent Treatment Plant in the state of Uttar Pradesh in 1993
for the treatment of effluent generated by leather industries at the secondary stage with the
assistance of the World Bank and the government of Uttar Pradesh.
All four Group tanneries have primary Effluent Treatment Plants.
An Environmental Management System has been implemented at the tanneries and shoe units.
The units has been certified as ISO 14001:2004.
The Group is implementing the Social Audit in every manufacturing unit and the leather
garments unit of the Group has already received the SA8000 Certification. Continuous efforts
are made to create awareness about environmental conservation among inhabiants of
towns/cities where our units are located.
The Group is committed to the Health and Safety of its workforce. The tanneries and shoe units
have been awarded with the certificate of OHSAS 18001:1999 for Occupational Health and
Safety Management System Standard.
The Group has also entered the field of education in collaboration with a leading Educational
Society Delhi Public School (DPS) and has opened several branches:
DPS Kalyanpur, Kanpur
DPS Indiranagar, Lucknow
DPS Eldeco, RaiBareily Rd, Lucknow

23

 DPS Jankipuram, Lucknow

DPS, Bareilly
DPS, Saharanpur
The Group has taken several steps forward in this direction and established Allenhouse Public
School, Allenhouse Group of Colleges and Allen Kids pre-school at different locations across
the region:
Allenhouse Public School, Civil Lines, Kanpur
Allenhouse Public School, Rooma, Kanpur
Allenhouse Institute of Technology, Rooma, Kanpur
Allenhouse Public School, Vasundhra, Ghaziabad.
Allenhouse Public School, VrindavanYojna, Lucknow
AllenKids, Kakdeo Kanpur
Allenhouse Public School, B-Block, Panki, Kanpur
All national events such as Republic Day and Independence Day and other days such as May
Day and, Vishwa Karma Day are celebrated at the units.

SWOT ANALYSIS
Strengths
High Growth
Ready availability of highly skilled and cheap manpower
Large raw material base
Policy initiatives taken by the Government
24

 Capability to assimilate new technologies and handle large projects

Continuous emphasis on product development and design up gradation
Weaknesses
International price fluctuation
Huge labour force resulting in high labour charges
Lack of strong presence in the global fashion market
Unawareness of international standards by many players
Opportunities
Rising potential in the domestic market
Growing fashion consciousness globally
Use of information technology and decision support software to help eliminate the length of the
production cycle for different products
Use of e-commerce in direct marketing
Threats
Major part of the industry is unorganized
Limited scope for mobilizing funds through private placements and public issues (many
businesses are family-owned)
Difficulty in obtaining bank loans resulting in high cost of private borrowing
Stricter international standards
High competition from East European countries and other Asian countries
Lack of communication facilities and skills
Lack of warehousing support from the government.
25

RESEARCH & DEVELOPMENT

POWER OF KNOWLEDGE
The Research and Development facilities of the Group:
Separate Research and Development Departments for every factory.
Separate Design Centers for Shoes, Bags, and Garments.
Renowned designers from various countries.
Specialized design center in China.
CAD-CAM facilities at shoe factories.
CAD-CAM facilities at fashion garment units.
State-of-the-art laboratories at the tanneries.
R & D and design centers.
Innovations and upgrading technologies are a regular feature of our R & D programme. This has
played a key role in competing with major players in the leather and textile industry, both in
Indian and overseas markets.
Our design and product development personnel frequently visit international events and fairs to
have firsthand knowledge and feel of the latest in the overseas markets. Each business unit has
its own dedicated lab/design centre. Apart from this, we have exclusive design centres in China
and England too.

26

PART 2
Products of Super House

Safety Footwear

Finished Leather

Footwear

Military Boot

Textile / Garments

Leather Accessories

27

SAFETY FOOTWEAR
Having entered safety footwear segment in 1998, currently we are producing Injection Moulded
safety shoes with four DESMA plants installed in Kanpur and Unnao.
Our Double Duty and Allen Cooper brands are in existence for the last ten years. These
brands have carved a niche for themselves in international markets.
Our premium range consists of water proof footwear, non metallic footwear and forest footwear.
A special product range of safety footwear for executives and ladies is also produced.
We offer safety shoes with Double Density PU/PU soles, Mono Density PU soles, Double
Density PU/TPU soles, Double Density PU/Rubber soles, Direct Rubber Vulcanized soles and
Genuine Goodyear Welted soles.
Capacity: 4,000 pairs per day
QualityStandard:
CSA/ANSI, EN20345, AS/NZS
With more than a decades experience in the area under its belt, Superhouse produces safety
footwear on different constructions such as Direct Injection pu/pu, pu/tpu, pu/rubber (made on
most sophisticated machines from Desma Germany andCIC Ralph vulcanized machines from
the UK) and Goodyear welted footwear with a traditional construction on rubber and leather
soles.
Combat Boots
Superhouse combat boots the ultimate in toughness are made to withstand the vagaries of
weather, rocky mountains, desert, extreme cold, snow and slush. These products are classified
as Combat boots, Desert boots , Jungle boots and Officers shoes, conforming to appropriate
military standards of Europe and other continents, and are subjected to rigoros testing
specifications through accredited laboratories.

28

Products

Direct Injection PU/PU , PU/TPU and PU /Rubber

Direct Vulcanized Rubber

Genuine Goodyear Welted.

Cement Construction.
Manpower
We have 2,000 experience workers who are supervised and managed by highly skilled and
qualified and professional managers.

29

FINISHED LEATHER

Our tanneries, are equipped with state-of-the-art-technology and produce high quality leather,
catering to the requirements of the footwear, leather goods and furniture industries. Serving to
the ever changing and highly fashion oriented needs of our clients, spread all over Western
Europe, Eastern Europe, China, the Far East, South Korea, South Africa, Mexico, etc., we are
well prepared to deliver a vast variety of colours and finishes to our valued clients in the shortest
possible time.

We produce a full range of quality leather including:

All kind of Buffalo leather including Full Grain, C.G., Print leather and linings.

Upholstery leather of all finishes.

Cow softy, Oil pull up, suede and other premium ranges.

Goat leather such as Shoe Nappa, Milled Nappa, Glazed, Milled Glazed, Shrunken, Foil,
Pearlized and linings.

Sheep Leathers such as Cabretta, Nappa, Garment nappa, Linings, etc

30

Harness, Belting Leather, leather for Eshestarian products.

QualityStandards
Manufacturing Units are having ISO 9000-2000, ISO 140012004, OHSAS 18001-2008
certification and products are compliant Din, Non-Din and EN345 specification.

MILITARY BOOT
Super house Military & Combat boots the ultimate in toughness are made to withstand the
vagaries of weather, rocky mountains, deserts, extreme cold, snow and slush. These products
are classified as Combat boots, Desert boots. Jungle boots and Officers shoes, conforming to
appropriate military standards of Europe and other continents, and are subjected to rigoros
testing specifications through accredited laboratories

31

32

MARKET SEGMENTATION

Segmentation can be very useful in the EU market as there is a wide range of shoe-types,
styles, colors that can be linked to differ rent types of consumers. Along with differences in
consumption between countries, there are also differences in consumption by market segments.
The most common segmentation methods for all EU countries is by user, by lifestyle or by
price/quality.
MARKET SEGMENTATION
Segmentation can be useful in the European market as there is a wide range of shoe-types,
styles, colours that can be linked to different types of consumers. Along with differences in
consumption between countries, there are also differences in consumption by market segments.
The most common segmentation methods for all European countries is by user, by lifestyle or
by price and quality.
Women:
Womens footwear is consistently the largest sector of the market, with women typically more
fashion-conscious than men in the other country. In this sense, there is strong demand for
footwear from luxury, designer fashion brands, as footwear is a key component of the fashion
industry. Meanwhile, this sector is largely made up of fast-fashion footwear, so that fashionconscious consumers can purchase high volumes of low-cost trend-led footwear and update
their image at low costs. The fashion industry provides a broader range of womens footwear
styles

than

is

available

to

the

mens

footwear

market,

including

heels,ourtshoes,wedges,and,ballet,pumps.
Womens footwear is consistently the largest sector of the market, 57% of footwear value sales
in EU markets in 2008..with women typically more fashion-conscious than men in the UK. In this
sense, there is strong demand for footwear from luxury, designer fashion brands, as footwear is
a key component of the fashion industry. Meanwhile, this sector is largely made up of fastfashion footwear, so that fashion-conscious consumers can purchase high volumes of low-cost
trend-led footwear and update their image at low costs. The fashion industry provides a broader
33

range of womens footwear styles than is available to the mens footwear market, including
heels, court shoes, wedges and ballet pumps.
Housewives buy a wide range of foot ware, from cheap to expensive shoes.
Younger housewives tend to follow trends and in some countries do not object to buying copies
of branded or designer footwear.
Women generally spend more on footwear and usually have various pairs of shoes for different
occasions. Working women in most of the countries tend to spend much on their outfit and
related fashionable footware.
For womens shoes, boots, ballerinas, loafers, sneakers, flip-flops, healthy sandals and
increasingly more high upper styles are popular. These sandals come either as ultra-flat
gladiator and/or Roman sandals with straps and beaded decorations, or as leather sandals with
a wooden/cork sole and a high heel. Platform Sandals or boots reveal either the heel or toes.
Other key styling elements in Sandals are T-straps and crisscross ties across the instep.
Men :
Mens are typically less driven by fashion trends, with a stronger affinity for functional designs,
and are therefore the main consumers of sports footwear. In terms of smart footwear, men are
often willing to invest substantial amounts in luxury shoes, with the UK footwear manufacturing
industry having a heritage for quality leather mens shoes.
The share of mens footwear averages around 26% in the major EU markets with higher shares
in the UK, Italy, Spain and France. Mens footwear tends to be more expensive than womens
footwear, and they buy less pairs than women.
This segment can be sub-divided into younger men, who are more fashion and brand conscious
and older men. Older men usually have footwear to wear at the office, one formal and one
casual pair, as well as a pair of sports footwear. They tend to look for practical footwear that
they can use for a long time. Many men regard comfort, style and quality more important than
fashion. Recent designs in mens shoes varies from round to elegant, tapered or pointed

34

footwear, particularly in ankle-loafers and classic oxford shoes. In sneakers, there is a sustained
attention to retro models, vintage colours (brownish mixed with bright colors) and white soles.
For men shoes ankle-high boots with slim lasts, sturdy lace-up boots, rounded Chelsea and
robust biker boots were hot items. For summer 2010, Chelsea boots, sneakers (in bright colors),
slip-ons and flip-flops remain popular. In addition, classic models are expected to make a
comeback in 2010 including Oxford shoes, the suede Desert Boot and top-sliders.
In some mens footwear, the welts are emphasized and some shoes feature contrasting
stitching and treaded soles that provide a rustic look. Rustic shoes have pale, flexible soles not
well-finished which contrasts to the sporty modern flair in new sneakers.
ChildrensFootwear
This sector includes footwear for children aged between 5 and 15 years old, as well as for
infants up to the age of 5. Childrens footwear often replicates that of adults; this is especially
true in recent years as the mini-me craze is seeing parents dressing their children in a similar
style to themselves. With childrens footwear often having lower price tags than adult footwear,
this is the smallest sector of the market. There is also ongoing demand for school footwear
ranges, while, with children growing rapidly and having quick growth spurts, there is a strong
need to replace childrens footwear on a regular basis. As a result, there is strong demand for
low-cost, disposable footwear for this demographic. It is worth noting that the primary
consumers of childrens footwear are adult parents and, thus, the expense, brands and styles
favoured are largely the choice of adults and not the child wearers.

Children and teens

This sector includes footwear for children aged between 5 and 15 years old, as well as for
infants up to the age of 5. Childrens footwear often replicates that of adults; this is especially
true in recent years as the mini-me craze is seeing parents dressing their children in a similar
style to themselves. With childrens footwear often having lower price tags than adult footwear,
this is the least sector of the market. There is also ongoing demand for school footwear range,
while, with children growing rapidly & having quick growth spurts, there is a strong need to put
back childrens footwear on a regular basis. As a result, there is strong demand for low-cost,
disposable footwear for this demographic. It is worth noting that the primary consumers of
35

childrens footwear are adult parents and, thus, the expense, brands and styles favoured are
largely the choice of adults & not the child wearers.
Looking more closely at childrens footwear, their share averages around 17% in the major
markets with lower shares in Germany & Belgium and higher shares in the UK and France. In
this segment, there are differences in who buys footwear and the criteria used when buying
footwear:

Children aged between 0 and 3 years old

Parents buy the shoes and regard shape, flexibility and soles as important. They are willing to
pay for good quality to prevent problems with their childs feet.

Children aged between 3 and 7 years old

These children are similar to the above group, but family income and childs preference starts to
play a role. Particularly clothing retailers come with complete outfits, including shoes. Children
nowadays have more spending power as families are smaller. Girls now wear more fashionable
footwear at a younger age than previously. This is recognized by the chain stores (clothing and
footwear) as the kids getting older younger (KGOY) trend. Decorations (beads) and bright
colors are dominant themes for childrens footwear. Special footwear collections for children
sometimes relate to films (Disney or Muppet characters) or video games heroes.

Children aged between 7 and 15 years old

Although parents still buy the shoes they are increasingly influenced by what the child wants.
These children are heavily influenced by the media (music video clips) and the Internet (blogs)
Differences in tastes between boys and girls become important in footwear choice.
These children referred to as pre-teens spend around 2-3 hours hours per day with the media
(TV, video games and Internet).
36

Teens aged between 15 and 19 years old

They are influenced by TV and magazines and are aware of the latest fashion trends and
brands. Depending on the EU country, teens have quite a lot of money to spend, as pocket
money is high. They are attracted to adult footwear and international fashion styles, especially
sneakers (with Velcro fasteners), basketball shoes, ballerinas, (lambskin) boots, Mary Janes,
(wedged) pumps, espadrilles, sandals, crogs or flip-flops. They also are well-informed by the
Internet (blogs), online sellers and retailers sites advising them what sort of footwear matches
well with different outfits.

37

 Segmentation by price/quality

The footwear market can be also segmented by price level being related to the footwear quality,
comfort, trendiness, design and brands.

Luxury segment

This segment comprises designer footwear being close to perfection. Its design is often refined
and elegant and is mainly worn on special occasions or when going out. Based on figures from
the survey Bain & Company, the EU luxury footwear segment was estimated at 18% of total EU
footwear sales in 2008 (in value) and has not been affected by the recession as the other
segments. Luxury footwear is sold by a few exclusive footwear specialists, designer shops, and
fashion boutiques otherwise by the high-end department stores.

Among affluent consumers, there is a growing interest in excellence (material, comfort,

durability) and craftsmanship. In addition, they tend to be more critical about social and
environmental issues. They tend to move away from conspicuous consumption in more
constrained economic times.

Fine segment

In many EU countries, few people can afford luxury footwear, particularly in Eastern EU
countries. For example, in Poland the ratio varies between 10-15% of the population. Because
more affluent EU consumers have become careful in their expenditure, fashion houses and
luxury footwear importers increasingly depend heavily on the near-luxury market. This market
38

is referred here as the fine segment. It comprises well-designed branded footwear that is
accessible to a wider consumer group at affordable prices (between 100 and 300).
Consumers in this segment are prepared to pay for quality footwear, but buy less frequent than
consumers in the other segments.

In the fine segment, footwear remains exclusive but is made in larger quantities and varieties
than the collections in the luxury segment. Brands are important, and this footwear is sold by
independent footwear specialists, single brand stores, fashion boutiques, exclusive clothing
stores or by department stores.
The fine segment suffers currently from consumers moving away to the medium segment as
prices are lower. Another problem is the rising sales of cheap imitations (counterfeit shoes),
especially in Eastern EU countries. Between 2007 and 2008, sales fell from 9.4 to 9.1 billion
(19% share).

Figure 1.1 Segmentation of EU footwear market by price and quality, 2008 % value and positioning
by major brands

39

4Ps ANALYSIS
MARKETING MIX OF FOOTWEAR RETAIL UNITS:The 'marketing mix' is a set of controllable, tactical marketing tools that work together to attain
company's objectives. The marketing mix is generally conventional as the use and specification
of the 'four Ps' describing the strategy place of a product in the marketplace. One version of the
marketing mix originated in 1948 when James a marketing decision should be a result of
something similar to a recipe. This version was used in 1953 when Neil Borden, in his American
Marketing Association presidential address, took the recipe idea one step further & coined the
term "marketing-mix". A famous marketer, E. Jerome McCarthy, proposed a 4 P classification in
1960, which has seen wide use. The four Ps concepts are explained in most of the marketing
textbook & classes.
PRODUCT:Marketing decision related to product is concerned with shape, design, characteristics, style,
brand, package and utility. A product line is a group of products that are closely related because
they function in a similar manner, sold to the same customers groups and are marketed through
the same type of outlets or fall within given price ranges. Retail outlets to provide quality
footwear products need tointroduce the product by identifying the needs of present & future
customers and alsonecessary infrastructure should be acquired before offering a product to the
customers. Developing a product and service or idea is not an end of product management, it's
only a beginning, the other things to be considered are branding, building brand image &
promoting. In retail advertising branding, brand name, brand images are all important. Brands
are intended to carry the beliefs, values and benefits of tangible products.
PRICE:Pricing is one of the four Ps of the mix. It is also a key variable in microeconomic price allocation
theory. Price is the only revenue generating element amongst the 4ps, the rest being cost
centres. Pricing is the manual or automatic process of applying prices to purchase and sales
orders, based on factors such as: a fixed amount, quantity break, promotion or sales campaign,
40

specific vendor quote, price prevailing on entry, shipment or invoice date, combination of
multiple orders or lines, and many others. Automated systems require more setup and
maintenance but may prevent pricing errors. Retail outlets need to invest crores of rupees on
the variety of brands, qualified professional and a modern infra structural facilities to improve
quality of retailing.
Increasing cost on inputs is fixation which makes possible a fair synchronization of users & retail
outlets interest. A retailer's prices influences the quantities of various items that consumers will
buy, which in turn affects total revenue and profit. Hence, correct pricing decisions are a key to
successful retail management. The pricing technique used by most retailers is cost plus pricing.
This involves adding a markup amount to the retailers cost. Another common technique
suggested is retail pricing. This simply involves charging the amount suggested by the
manufacturer and usually printed on the product by the manufacturer.
A major step towards making a profit in retailing is selling merchandise for more than it costs to
you. This difference between cost of merchandise & retail price is called mark up. A well chosen
price should achieve the financial goals of the company (e.g., profitability), fit the realities of the
marketplace (Will customers buy at that price?), support a product's positioning and be
consistent with the other variables in the marketing mix. Price is influenced by the type of
distribution channel used, the type of promotions used, and the quality of the product.
PLACE:Place is also known as channel, distribution, or intermediary. It is the mechanism through which
goods and/or services are moved from the manufacturer/ service provider to the user or
consumer. Retail outlets should focus on place where products are made available to customers
to achieve customer satisfaction. Chain of intermediaries, each passing the product down the
chain to the next organisation, before it finally reaches the consumer or end-user. This process
is known as the 'distribution chain' or the 'channel. Each of the elements in these chains will
have their own specific needs, which the producer must take into account, along with those of
the all-important end-user 28, A number of alternate 'channels' of distribution may be available:
Distributor, who sells to retailers Retailer (also called dealer or reseller), who sells to end

41

customers, advertisement typically used for consumption goods. There have also been some
innovations in the distribution of services.
In large markets (such as larger countries) a second level; a wholesaler for example, is now
mainly used to extend distribution to the large number of small, neighbourhood retailers or
dealers. Many of the marketing principles & techniques which are applied to the external
customers of an organisation can be just as effectively applied to each subsidiary's, or each
departments, 'internal' customers. In some parts of certain organisations these may in fact be
formalised, as goods are transferred among separate parts of the organisation at a transfer
price'. To all intents & purposes, with the possible exception of the pricing mechanism itself, this
process can and should be viewed as a normal buyer-seller relationship. The fact that these are
a captive market, resulting in a monopoly price', should not discourage the participants from
employing marketing techniques.
PROMOTION:It involves disseminating information about a product, product line, brand, or company. It is one
of the four key aspects of the marketing mix. Promotion is an act of communicating product and
its qualities to customers and persuading or influencing them to purchase. Communication is an
important tool in promoting the company products before services. Marketers need to select
appropriate

ingredients

for

communications

programme.

Public

relations,

publication,

advertising, educational programmes, endorsement of option leaders etc., are the appropriate
devices for promoting products promotional or informational activities at the point of delivery of
products can also have an important role in communication. The purpose of likely
communication or promotion budget and their distribution over target markets will influence the
selection of communication mix, communication can be used to influence.
The various promotional tools which public relations can use for promoting retail outlets are
leather fairs, camps, exhibitions, seminars & news release etc. Promotion is generally sub
divided into two parts: Above the line promotion: Promotion in the media (e.g. TV, radio,
newspapers, Internet and Mobile Phones) in which the advertiser pays an advertising agency to
place the Ad. Below the line promotion: All other promotion. Much of this is intended to be subtle
enough for the consumer to be unaware that promotion is taking place. E.g. Sponsorship,
42

Product placement, Endorsements, Sales promotion, merchandising, direct mail, personal

selling, public relations, and trade shows. The specification of these four variables create a
promotional mix or promotional plan. A promotional mix specifies how much attention to pay to
each of the four subcategories, & how much money to budget for each. A promotional plan can
has a wide range of objectives, including: sales increases, innovative product acceptance,

43

PART 3&4
COMPETITIVE ENVIRONMENT
Porters five forces analysis for Leather industry
Whether you are starting a new business otherwise looking for more insight into your existing
company's prospects, you probably have questions about the competition. One way to answer
those questions is by using Porter's Five Forces model.
Originally developed by Harvard Business School's Michael E. Porter in 1979, the five forces
model looks at five specific factors that help determine whether or not a business can be
profitable, based on other businesses in the industry.
1. BARGAINING POWER OF SUPPLIER
In the case of

products, and certainly

leather goods, the quality of raw material is of the

utmost importance as it has an impact in the feel of the final product. Given this, luxury brands
has always recognized the importance of establishing long-term relationships with reliable
suppliers offering the highest quality materials. These relationships are managed in such a way
that suppliers are generally locked-in to the relationships by having high switching costs &
setting up their own farms for leather production, specially in the case of exotic leathers which
are scarce. Additionally, leather suppliers are generally not organized to reach final consumers in
terms of final product, branding and distribution, thus, they depend on

brands buying their

leather hides. Although scarcity has perhaps increased suppliers bargaining power, overall there
is a low supplier power in the leather goods market.

2. BARGAINING POWER OF BUYERS

When considering the bar gaining power of buyers, the brand loyalty individual consumers
have towards the specific brands is key to determine which party have the most influence. Since
most up scale department stores and e-stores, such as Saks Fifth Avenue, Neiman
Marcus, Barneys Harrods, Selfridges, Net-A-Porter, etc. are quite known on their own they are
44

powerful channels for up-and-coming designers to display their products supported by stores
customers recognize as luxurious and fashionable. However, in the case of established brands,
such as the ones mentioned in the key players section, loyalty tends to be towards the brand and
not the store, allocating the bargaining power with the brands. Furthermore, not carring certain
brands customers expect weakens the stores image Additionally, brands have become for the
most part expert retailers themselves with flagship stores and directly-operated boutiques
worldwide meaning they do not rely solely on wholesalers to distribute and sell their
products. However, department stores in emerging markets where brands be still to set their own
operations may hold a higher bargaining power, but overall buyers bargaining power is
moderate. Finally,

when

talking

about

directly-operated

stores

we

must

talk

about

individual consumers as the buyers. In this case, bargaining power is also reasonable as most
clients have emotional attachments to their preferred brands. Moreover, although customers do
not incur in switch costs from buying different brands, designs and brand positioning are
differentiate enough that customers may find it difficult to switch brands. Therefore, as a
whole customers always hold some bargaining power since they drive demand, but as no
individual customer represents a considerable wallet-share the bargaining power on individual
customers is moderate.

3. THREAT OF SUBSTITUTE GOODS

Leather goods expenditure is driven by self-indulgence, meaning that potentially any good and
service may pose as a substitute as long as it covers this need for self-gratification & pampering.
Therefore, some of the most obvious substitutes are other products from the accessories
category, but substitutes may also come from categories such as jewellery & watches, perfumes
&

apparel

amongst

other

categories.

Additionally,

leather

goods,

although mainly

purchased for their brand & aesthetics, also have a functionality element & therefore may be
substituted by products which meet this requirement. Specially after the crisis, some
potential customers remain price-sensitive and therefore may opt to replacement leather goods
for their more affordable counterparts. However, it is important to mention that generally leather
goods are considered durable goods, as opposed to their inexpensive counter parts which
are considered non-durable goods.
On the other hand, there are also customers who are unwilling to give-up brands but opt to
45

consume or purchase them in an different way. Vintage and second-hand products, typically sold
by specialty stores or by individual owners through sites such as eBay pose a threat due to their
lower cost. Another threat is the rental of handbags, which allows consumers to access the
dream and prestige of wearing a handbag without having to purchase it. Finally, counterfeit
represents the biggest threat for all of the

sector, of which leather goods is the most

affected since handbags and wallets are amongst the most reproduced products. In products
scarcity and quality are indispensable to achieve the desired brand image and counterfeit
products, specially the higher-end copies, deteriorate brand name image since customers
might confuse them with the real products. Overall, the threat of substitutes is high due to
counterfeit, since the beforehand mentioned substitutes only pose a restrained threat.

4. THREAT OF NEW ENTRANTS

In the luxury leather goods industry, new designer are all the time entering the scene since all it
takes is a popular design paired with a celebrity endorsement for customers to desire
the product. Moreover, it is possible for new designers to enter the industry on a small scale
with are latively

small

capital

speculation. On

the

other

hand,

heritage

and

brand

positioning serve as entry barriers since achieving a brand image comparable to that of
established

brands require extensive investments on communication and media planning,

as well as time for accept the brand and form emotional attachments to it. Additionally, the
element of clientele to heritage is impossible to duplicate in the short-term. Additionally, the
industries consolidation trend leads

groups to buy independent brands which they consider

to have potential and therefore pose a future threat. Consolidation has also

lead to

the

formation of additional entry barriers derived from scale and bargaining power such as
economies of scale as some of the cost can be shared amongst firms and a fortunate
position in terms of supply of raw materials and in distribution channels. Overall, although it is
easy for new entrants to enter the market, the threat of new entrant is considered low since
it takes a noticeably long period of time for brands to position themselves as brands and truly
struggle at the level of the key players in the industry.

46

5.RIVALRY AMONG EXISTITNG COMPETITIORS

The

leather goods market is highly consolidate at company level, however, at level it is

disjointed as there exists a wide array of brands ranging in size, design, heritage brand and
positioning. Brands are typically managed as self-determining companies to maintain their
creative control and brand DNA, therefore, brands tend to target explicit clients. Furthermore
brand loyalty tends to be strong despite the low switching costs for clients, which is why
luxury groups tend to focus on having an extensive brand portfolio covering different client
segments. Overall, there is many brands in the luxury leather goods market yet the level of rivalry
is sensible since brands are, in a way, measured niche and therefore compete for
different client.

47

IMPORT/EXPORT NORMS (INDIA)

The Leather Industry holds a high up place in the Indian economy. This sector is known for its
reliability in high export earnings and it is among the top ten foreign exchange earners for the
country. The overall size of Indias leather sector is estimated to be Rs.25,000 crore. With an
annual turnover of over US$ 10 billion, the export of leather & leather products increased
multiple over the past decades and touched US$ 5.91 billion in 2013-14, recording a cumulative
annual growth rate of about 14.77 % (5 years).
Domestic market for leather, leather products & footwear has also increased from US $ 2.2
billion to US $ 5 billion in 2013-14. The per capita consumption of footwear which was less than
1 pair a decade ago, has increased to 1.8 pairs per annum in 2011 & about 2 pairs at present.
The Government of India have identified the Leather Sector as a Focus Sector in the Foreign
Trade Policy in view of its immense potential for export growth prospects & employment
generation. Planning Commission have also identified the Leather Sector as Employment
incentive sector for 12th Plan period. National Manufacturing Policy has further identified leather
& footwear as special focus sector. Accordingly, the Government are providing various
incentives to the Leather Industry in Foreign Trade Policy and allowing concessional Duty for
import of Machinery. Department of Industrial Policy and Promotion (DIPP) is implementing
Indian Leather Development Programme (ILDP) consisting of six sub-schemes viz. (Human
Resource Development, Support to Artisan, Mega Leather Cluster, Integrated Development of
Leather Sector, Leather Technology-Innovation & Environmental Issues and Establishment of
Institutional Facilities) for the overall development of leather sector. Financial assistance is
being provided to organize overseas marketing activities to promote exports from the country
under Marketing Development Assistance (MDA) scheme & for enhancement of export through
accessing new markets and through increasing the share in existing markets under Market
Access initiative Scheme (MAIS).
India holds a share of 3.05% in global leather trade of US$ 159.89 billion as per information
available for the year 2011.

48

The incentives and facilities to leather based industries are made available as per details in
enclosed Annexure.

Incentives and facilities to leather based industries

(i)
a)

Foreign Trade Policy (FTP) 2009-14

Under the Focus Product scheme, Duty Credit Scrip @ 4% on FOB value of exports for notify
leather products & footwear under Appendix 37 D of Handbook of Procedures- Vol. 1 being
provided. Also, 2% duty credit scrip is being provided for finished leather under Focus Product
Scheme. These scrips are transferable.

b)

Under the Focus Market Scheme, the exporters are currently given a duty credit scrip of 3%
for exports to notified countries (notified in Appendix 37 C of Handbook of Procedures Vol. 1)
in Latin American, African and Commonwealth of Independent States (CIS), Eastern Europe
and Asia-Oceania regions. These scrips are transferable.

c)

The Special Focus Market Scheme provides 4% duty credit scrips on FOB value for exports
made to Latin American, African and CIS regions. This scheme is being implemented from
1.4.2011 onwards. These scrips are transferable. The aforesaid duty credit scrips can be used
for payment of import duties or for payment of Excise Duty on domestic procurement of such
items as permitted to be imported under individual scheme.

d)

Zero Duty Export endorsement Capital Goods Scheme (EPCG) has been notify for positive
sectors including leather and leather products, which enables import of Capital Goods without
any duty, subject to fulfilment of Export responsibility.

e)

Kanpur, Agra and Ambur recognized as Towns of Export Excellence (TOEE) for leather
products in FTP. For up gradation of export sector infrastructure, Towns of Export Excellence
and units located therein would be granted added focused support and incentives.
49

f)

Leather sector have been allowed re-export of unsold imported raw hides and skins and semi
finished leather from public bonded ware houses, with no payment export duty. This measure
was announced in the Annual Supplement 2010-11.

g)

Duty free import of notified inputs @ 3% of FOB value of export comprehension during
previous year for manufacturer-exporters & merchant exporters tied-up with supporting
manufacturers in respect of leather garments and for manufacturer-exporters in respect of other
leather products. This scheme is being implemented by Council for Leather Exports (CLE).

h)

Machinery & equipment for Effluent Treatment Plants are exempted from basic customs duty.

i)

CVD exempted on raw, tanned & dressed fur skins falling under Chapter 43 of ITC (HS).

j)

Under the Incremental Exports Incentivisation Scheme, the exporters are eligible for 2% duty
credit scrip on the FOB value of exports to USA, Europe & Asia (excluding Singapore, UAE and
Hong Kong) on the incremental growth during the period 01.01.2013 to 31.3.2013 compared to
the period from 01.01.2012 to 31.3.2012. This scheme were subsequently extended for the year
2013-14 on annual basis. Also, exports to 53 notified countries Latin America & Africa have also
been added under this scheme during 2013-14. The 2% incremental scrip will be only for
incremental exports achieved during 2013-14 as compared to the year 2012-13 for notified
countries. This scrip is transferable and can be used for domestic sourcing and for payment of
Service Tax. Certain Latin American and African countries have been included under
Incremental Exports Incentivization Scheme.

(ii) Concessional Duty for import of Machinery

(a)

As per Serial No. 300 of Customs Notification No. 12/2012 dated 17.3.2012, as amended from
time to time, machinery notified under list 29 of the said Customs Notification falling under
Chapter Nos. 84, 85 or 90, are allowed for import with a concessional 5% Basic Customs Duty
(BCD) as against the normal BCD of 10%.
50

(iii) Implementation of Indian Leather Development Programme (ILDP):

Department of Industrial Policy and Promotion, Ministry of Commerce & Industry is
implementing Indian Leather Development Programme (ILDP) for the 12 th Plan period with total
outlay of Rs.990.36 crore comprising of the following components:
a)

Integrated Development of Leather Sector (IDLS) : This sub-scheme is aimed at enabling

tanneries, footwear, footwear components, leather goods and accessories, leather garments,
harness &saddlery manufacturing units to improve themselves leading to industrious gains,
right-sizing of capacity, cost cutting, design and development including simultaneously
encouraging entrepreneurs to diversify and set up new units.

b)

Support to Artisan (STA): There are various clusters in the India making traditional footwear
and other leather goods. The aim of the component is to promote the clusters at various forums
as they are an integral part of Indian economy and have potential for generating local
employment and export. The artisan clusters are supported for providing Common Facility
Centers, product development, promotion linkages and capacity building etc.

c)

Human Resource Development (HRD): This sub-scheme targets potential work force all
over India. Assistance is provided for placement linked skill advance training to unemployed
persons, for skill up gradation training to employed workers and training of trainers. The
placement of 75% of trained persons is mandatory for availing assistance related to skill
development training component.

d)

Establishment of Institutional Facilities: The objective of this sub-scheme is to provide

transportation by way of establish two new branches of FDDI to meet the mounting demand of
the Leather Industry for footwear technologists, designer, supervisors and technicalities.

51

e)

Leather Technology, Innovation and Environmental Issues: Leather industry and tanning
activity in particular is linked to environmental concerns and this sub-scheme envisage
measures which are required to be put in place for industries to cope with the inflexible norms.

Projects for installation/upgrading Common Effluent Treatment Plants are assisted under this
component. Assistance is also provided for Pilot Projects under Technology Benchmarking and
environmental management for leather units, for organizing Environment Related Workshops
and for Pilot projects for Solid Waste Management.

f)

Mega Leather Cluster (MLC): This sub-scheme aims at providing infrastructure support to
the Leather Industry by establishment of Mega Leather Clusters (MLC) which would assist the
entrepreneurs to set up units with modern transportation, latest technology and passable
training and HRD inputs.

(iv)

Assistance is also provided by Department of Commerce, Ministry of Commerce & Industry

for establishment of two new branches of FDDIs at Bihar and Andhra Pradesh during 12 th Plan.

(v)
(a)

MDA and MAI Schemes:

Under MDA scheme, financial assistance is provided to the Export Promotion Councils (EPCs)

to organize overseas marketing activities to promote exports from the country, both in traditional
markets as well as potential markets. Similarly, financial support is also provided to individual
units through EPCs for their participation in overseas business events organized by the EPCs.
(b) The Government of India is also implement the Market Access Initiative Scheme (MAIS) for
enhancement of export through accessing new markets or through increasing the share in the
existing markets. Under MAI Scheme, financial assistance is provided for marketing projects
abroad, capacity building, Market studies/survey for evolving proper marketing strategies etc.

52

Documents Required

Export procedure describes the documents required for exporting from India. Special documents
may be required depending on the type of product or destination. Certain export products may
require

a quality

control

inspection certificate

from

the

Export

Inspection

Agency..

Shipping Bill/ Bill of Export is the main document requisite by the Customs Authority for allowing
shipment. Usually the Shipping Bill is of four types and the major distinction lies with regard to
the goods being subject to certain surroundings which are mentioned below:

Export duty/ cess

Free of duty/ cess

Entitlement of duty drawback

Entitlement of credit of duty under DEPB Scheme

Re-export of imported goods

The following are the export documents required for the processing of the Shipping Bill:

GR forms (in duplicate) for consignment to all the countries.

4 copies of the packing list mentioning the contents, quantity, gross and net weight of each
package.

4 copies of invoices which contains all relevant particulars like number of packages, quantity,
unit rate, total f.o.b./ c.i.f. value, correct & full explanation of goods etc.

Contract, L/ C, Purchase Order of the overseas buyer.

AR4 (both original and duplicate) and invoice.

Examination/ Examination Certificate.

The formats presented for the Shipping Bill are as given below

White Shipping Bill in triplicate for export of duty free of goods.

Green Shipping Bill in quadruplicate for the export of goods which are under claim for duty
drawback.

53

Yellow Shipping Bill in triplicate for the export of dutiable goods.

Blue Shipping Bill in 7 copies for exports under the DEPB scheme
Documents Required for Post Parcel Customs Clearance
In case of Post Parcel, no Shipping Bill is required. The relevant documents are mentioned
below:

Customs Declaration Form - It is prescribed by the Universal Postal Union (UPU) and
international apex body coordinating activities of national postal administration. It is known by
the code number CP2/ CP3 and to be prepared in quadruplicate, signed by the sender.

Despatch Note, also known as CP2. It is filled by the sender to specify the action to be taken by
the postal department at the destination in case the address is non-traceable or the parcel is
refused to be accepted.

Prescriptions regarding the minimum and maximum sizes of the parcel with its maximum weight
:

Minimum

size:

Total

surface

area

not

less

than

140

mm

90

mm.

Maximum size: Lengthwise not over 1.05 m. Measurement of any other side of circumference
0.9

m./

2.00

m.

Maximum weight: 10 kg usually, 20 kg for some destinations.

Commercial invoice - Issued by the seller for the full realisable amount of goods as per trade
term.

Consular Invoice - Mainly needed for the countries like Kenya, Uganda, Tanzania, Mauritius,
New Zealand, Burma, Iraq, Ausatralia, Fiji, Cyprus, Nigeria, Ghana, Zanzibar etc. It is prepared
in the prescribed format and is signed/ certified by the counsel of the importing country located
in the country of export.

Customs Invoice - Mainly needed for the countries like USA, Canada, etc. It is prepared on a
special form being presented by the Customs authorities of the importing country. It facilitates
entry of goods in the importing country at preferential tariff rate.

Legalised/Visaed Invoice - This shows the seller's genuineness before the appropriate
consulate/ chamber of commerce/ embassy. It do not have any prescribed form.
54

Certified Invoice - It is required when the exporter needs to certify on the invoice that the goods
are of a particular origin or manufactured/ packed at a particular place and in accordance with
specific contract. Sight Draft and Usance Draft are available for this. Sight Draft is required
when the exporter expects immediate payment and Usance Draft is required for credit delivery.

Packing List - It shows the details of goods contained in each parcel/ shipment.

Certificate of Inspection - It shows that goods have been inspected before shipment.

Black List Certificate - It is required for countries which have strained political relation. It
certifies that the ship or the aircraft carrying the goods has not touched those country(s).

Weight Note - Required to confirm the packets or bales or other form are of a stipulated weight.

Manufacturer's/ Supplier's Quality/ Inspection Certificate.

Manufacturer's Certificate - It is required in addition to the Certificate of Origin for few

countries to show that the goods shipped have actually been manufactured and are available.

Certificate of Chemical Analysis - It is required to ensure the quality and grade of certain
items such as metallic ores, pigments, etc.

Certificate of Shipment - It signifies that a certain lot of goods have been shipped.

Health/ Veterinary/ Sanitary Certification - Required for export of foodstuffs, marine products,
hides, livestock etc.

Certificate of Conditioning - It is issued by the competent office to certify compliance of

humidity factor, dry weight, etc.

Antiquity Measurement - Issued by Archaeological Survey of India in case of antiques.

Transhipment Bill - It is used for goods imported into a customs port/ airport intended for
transhipment.

Shipping Order - Issued by the Shipping (Conference) Line which intimates the exporter about
the reservation of space of shipment of cargo through the specific vessel from a specified port
and on a specified date.
55

Cart/ Lorry Ticket - It is prepared for admittance of the cargo through the port gate and
includes the shipper's name, cart/ lorry No., marks on packages, quantity, etc.

Shut Out Advice - It is a statement of packages which are shut out by a ship and is prepared
by the concerned shed and is sent to the exporter.

Short Shipment Form - It is an application to the customs authorities at port which advises
short shipment of goods and required for claiming the return.

Shipping Advice - It is prepared in aligned document to be used to inform the overseas

customer about the shipment of goods.
Leather and Footwear

a. Duty free import entitlement of specified items shall be 5% of FOB value of exports during
preceding financial year.
b. Duty free entitlement for import of trimmings, embellishments and footwear components for
footwear (leather as well as synthetic), gloves, travel bags and handbags shall be 3% of FOB
value of exports of previous financial year. Such entitlement shall also cover packing material,
such as printed and non printed shoeboxes, small cartons made of wood, tin or plastic materials
for packing footwear.
c. Machinery and equipment for Effluent Treatment Plants shall be exempt from basic customs
duty.
d. Re-export of unsuitable imported materials such as raw hides & skins and wet blue leathers is
permitted.
e. CVD is exempted on lining and interlining material notified at S.No 168 of Customs Notification
No 21/2002 dated 01.03.2002.
f. CVD is exempted on raw, tanned and dressed fur skins falling under Chapter 43 of ITC (HS).

56

Documentation in India

Invoice

Shipper

Invoice No. & Date

Exporter Ref.

Buyer's Order No. & Date

Other reference(s)
ctc person
Tel.No.s
Consignee

Buyer ( if other than consignee

ctc person

Country of origin of goods

Tel No.s
Pre-Carriage by

Place of Receipt by pre-carrier

Vessel / Flight No.

Port of Loading

Port of Discharge

Final Destination

Marks & Numbers.

Container No.

No. & kind of

Packages

Country of final destination

Terms of Delivery & payment

C I F / C&F / FOB

Payment Terms:
D P / DA / AP /
Description of Goods

Quantity

Amount chargeable :
( in words / currency )

Rate

Total

Declaration:
We declaration that invoice shows the actual price of goods
described and that all particularss are true & correct.

Signature / Date / Co stamp.

57

Amount
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0.00

Shipping
Exporter

Invoice No. & Date

Exporter Ref.

Buyer's Order No. & Date

Other reference(s)

Buyer ( if other than consignee )

Consignee

Country of origin of goods

Country of final destination

Handling information if any:

Pre-Carriage by

Place of Receipt by pre-carrier

Vessel / Flight No.

Port of Loading

Port of Discharge

Final Destination

Marks & Numbers.

No. & kind of

Container No.

Packages

Net weight:

Gross weight :

Description of Goods

Quantity

Remarks

Carton No.
Box No.

**
L ( cms )

B ( cm X

L X B X H cms3 / 6000 =

H ( cms )

1)
2)

Volumetric weight:

Kgs

Actual weight:

Kgs

Total Net weight

Kgs

Total Gross weight

Kgs

3)
4)
5)
6)
7)
8)
9)
10)
Signature / Date / Co stamp.

58

SHIPPERS LETTER

SHIPPER' S LETTER OF INSTRUCTIONS

Shipper Name:
Consignee Name:

Date:
Invoice No.

IE CODE NO (10 DIGIT) :

BANK AD CODE # (PART I & II) :
CURRENCY OF INVOICE
INCOTERMS : F O B / C & F / C & I / C I F :
NATURE OF PAYMENT * : D P / D A / A P / OTHERS
Details to be declared for preparation of Shipping Bill
FOB VALUE
:
FREIGHT (IF ANY)
:
INSURANCE (IF ANY)
:
COMMISSION (IF ANY)
:
DISCOUNT (IF ANY)
:
Description of Goods to be declared on Shipping Bill

NO. OF PKGS. :
NET WT. :
GROSS WT. :
VOLUME WT. :
DIMENSION (IN CMS) of each pkg.

Description of Goods to be declared on AWB

Special Instructon, If any

TYPE OF SHIPPING BILL ( CIRCLE YES or NO

a) FREE TRADE SAMPLE (NON-COMM) YES / NO
b) DUTY FREE COMMERCIAL
YES / NO
c) EOU SHIPPING BILL
YES / NO
d) DUTY DRAWBACK
YES / NO
e) DUTIABLE SHIPPING BILL
YES / NO
f) DEPB SHIPPING BILL
YES / NO
g) DFIA
YES / NO
h) EPCG SHIPPING BILL
YES / NO

k) DUTY DRAWBACK (SECTION 74)

BELOW DOCUMENTS REQUIRED WITH SHIPMENT

FREE
NOTH
ANNE
DBK
RATE
DEPB
DFIA
REGN
REGN
YES / NO NO. &
ORGI
YES / NO NAL
ORIGI
YES / NO NAL

1. INVOICE (4 COPIES)
2. PACKING LIST (4 COPIES)
3. SDF FORM IN DUPLICATE

7. ARE-1 FORM IN DUPLICATE

8. VISA/AEPC ENDORSEMENT
9. LAB ANALYSIS REPORT

4. NON-DG DECLARATIONS
5. PURCHASE ORDER COPY
6. GR FORM/GR WAIVER

10. MSDS
11. PHYTOSANITARY CERT
12. GSP CERTIFICATE

i) ADVANCE LICENCE SHIPPING BILL

j) REPAIR & RETURN

13 ___________________________
14 ___________________________
15 ___________________________
1
6 ___________________________
17 ___________________________
18 ___________________________

Please indicate API (As per Invoice) if any detail is mentioned in the Invoice.
We hereby confirm that the above details declared are true and correct.
We confirm that our company's IEC & Bank AD Code Details
are registered with EDI System of Air Cargo - Delhi
SIGNATURE OF EXPORTER/STAMP

59

Shipping Bill

APPENDIX I
FORM SDF
Shipping Bill No. ___________________ Date :____________
Declaration under Foreign Exchange Regulation Act, 1973 :
*SELLER/CONSIGNOR of the goods in respect of which
this declaration is made and that the particulars given in the Shipping Bill no ______________ dated
________________are true and that,

A)*The value as contracted with the buyer is same as the full export value in the above shipping bills.
that which I/We, having regard to the prevailing market conditions, accept to receive on the sale of
goods in the overseas market.

A. I/We undertake that I/We will deliver to the bank named herein _______________ the
foreign exchange representing the full export value of the goods on or before @
___________________ in the manner prescribed in Rule 9 of the Foreign Exchange Regulation
B. I/We further declares that I/We am/are resident in India and I/We have place of Business in
C. I./We am/are Or am/are not in Caution list of the Reserve Bank of India.
Date : (Signature of Exporter)
Name:

60

MODE OF ENTRY TO FOREIGN MARKETS

1. Indirect Exporting:
Companies can, while going international, use domestically based
agents who operate on a commission basis without taking title to goods,
or merchants who sell the products of the company in international
markets (after taking title to the goods). They can also use the distribution
facilities of other firms in the international markets.
Small firms that find it difficult to use any of the above means can sell their
products via other organizations that export products on behalf of several
small firms collectively. These are generally large trading concerns and
export management companies that negotiate contracts on behalf of
smaller exporters. Such companies can take up several activities such as
market

assessment,

channel

selection

financing

arrangements,

documentation, etc., for the smaller exporters.

The scale of operations of the smaller exporters does not consent these
firms to be able to direct such activities. Moreover, the larger companies
have better access to information about international markets. The firms
involvement level with the foreign markets is lowest in this case. It may be
evaluating the pleasant appearance of the foreign market before
increasing its stake. The investment involved in this effort is the least
among all the other alternative for expansion.
2. Direct Exporting:
A company may decide to export its products itself. The company
develops overseas contacts, undertakes marketing research, handles
documentation and transportation and decides the marketing mix
Companies can use foreign-based agents or distributors. An agent may
agree to handle the companys product completely, or may handle
products of other companies too. An agent does not take title to the
products & works on commission.

61

The salesperson will pay attention to the development of the market. The
possibilities for feedback and other information from the market are better.
Thus, clients will be looked after better & the companys interest would be
better served. This is an expensive method, so the order size has to be
large.
The company may establish a sales & marketing office in the foreign
market. This office monitors the marketing efforts of the company. They
may use agents and distributors and may decide to develop their own
distribution infrastructure with appoint their own salespersons. The idea is
to take charge of the marketing operations of the company. This involves
better commitment of the association than indirect exports.
3. Licensing:
Under licensing, a foreign licensor provides a local licensee with access to
technologies, patents, trademarks, know-how and brand/company name
in exchange for financial or some other form of reward. The licensee has
exclusive rights to produce and market the product in the specified area
for a limited period. The licensor usually gets royalty or certify fees on the
sale of the product.
The advantage of licensing lies in the fact that the company (licensor) can
enter a new market without making significant investments. But the
company loses control over production and marketing of the product.
Further the standing of the licensor is dependent on the presentation of
the licensee.
One danger of licensing is the loss of product and process know-how to
third parties (licensee), who may become competitors once the conformity
is over. A company can use licensing to exploit new technology
simultaneously in many markets, if it lacks the necessary resources to set
up manufacturing facilities and sell the products. Licensing is popular in
R&D comprehensive industries where companies often license technology
which does not fit with their overall strategy.

62

Licensing agreements must ensure sustaining competitive advantage to

the licensor. Adequate supervision of licensees is important. Replace of
new developments by the licensee with the licensor can also be made
unavoidable in the licensing agreement. A licensing agreement that goes
bad can injure the brand equity of the licensor forever.
4. Franchising:
Franchising is a type of licensing conformity where packages of services
are obtainable by the franchiser to the franchisee in return for a payment.
The two types of franchising are product & trade name franchising, &
business format franchising. An example of product & trade name
franchising is Pepsi Cola selling its syrup together with the right to use its
trademark and name, to independent bottlers.
Business format franchising is used in service industries such as
restaurants, hotels & retailing where the franchiser exert a high quantity
of control on the franchisees based in the overseas market. In business
format franchising, the franchiser, like McDonalds, lends operating
procedures, quality control, as well as the product and trade name.
5. Joint Ventures:
The international corporation enters into a joint-venture agreement with a
company from the objective country market. Two types of joint venture are
Contractual & Equity joint ventures. In contractual joint ventures, no joint
project with a separate identity is formed. Two or more firms enter into a
partnership to share the cost of an investment, the risks & the long-term
profits. The corporation can be formed for completing a project, or for a
long term co-operative effort. In an equity joint venture, a new company is
formed in which the foreign & local companies share ownership & control.
A joint venture may be necessary due to legal limitations on foreign
investment. A joint venture also reduces the investment required by a
foreign firm, besides reducing risk. The danger of expropriation is less
when a company has a national partner than when the foreign firm is the
sole owner. Forming a joint venture with a local partner may be the only
63

way of entering markets which are very competitive & saturated. The
Japanese set up joint ventures in the US primarily for this reason. The
foreign partner stands to gain from local expertise.
Both partners bring in their expertise in different areas that helps in
realizing the success of the venture. Both the partners can specialize in
their particular areas of technological expertise. The foreign investor
benefits from the local management talent & knowledge of local markets
and regulations.
6. Direct Investment:
The company entering the foreign market invests in foreign-based
manufacturing facilities. The company commits maximum amount of
capital and managerial efforts in this mode of entry. The company can
acquire a foreign manufacturer or facility, or build a new facility.
Direct investment means that the companies have control & significant
stake in its operations in other countries. The complete form of
participation in foreign countries is 100 per cent ownership, which can be
established as a start-up, or can be achieved by acquiring local
companies.
Acquisition of companies in foreign countries is a fast way to enter a new
market. It provides the company prepared access to a product portfolio,
manufacturing

facilities,

customers,

qualified

employees,

local

management, knowledge about local conditions and contact with local

authorities.
In saturated markets, acquisition may be the only possible way of
establishing a manufacturing capability in a foreign market. But differing
styles of organization between foreign investors and local management
teams may cause problems. In many countries, 100 per cent ownership
by foreign company may not be permitted due to government restrictions.

64

In direct investment, the foreign depositor has greater degree of control

than licensing or joint ventures. It is able to prevent leakage of proprietary
in sequence. The company is able to avoid tariff and non-tariff barriers.
The distribution cost is lowered. Being based in the local market, the
company is more disposed to local tastes and preferences.

65

Supporting Institutes to Facilities Export/Import

Exim Bank of India seeks to help Indian companies, above all in the SME
sector, to establish their products overseas & enter new markets by
helping them in their export efforts by proactively assisting in locating
overseas buyers/partners for their products/services.

The Banks

programme for supporting product/ process certification aims to enhance

international competitiveness of Indian companies, primarily SMEs,
through adherence to international quality systems and standards. Exim
Bank of India initiated a Clusters of Excellence programme, jointly with
NASSCOM in the past, to assist small and medium sized Indian software
exporting companies in achieve worldwide quality standards. The
programme is aimed at assisting SME software companies to achieve the
SEI-CMM certification, enhancing their capability and acceptance, and
creating the potential for larger exports to USA and other developed
country markets.
Exim Bank of India has also launch the Grassroots Initiatives &
Development (GRID) to create export capabilities in rural and grass-root
enterprises, & thereby enhancing purchase power of the bottom of the
pyramid. GRID aims to create an enabling environment for rural
proletarian

enterprises to explore

newer geographies,

leveraging

effectively upon Exim Banks widespread institutional and trade promotion

linkages.

Exim Bank of India also organizes focused seminars, workshops &

training programmes covering various aspects related to worldwide trade
and investment with the help of experts including international faculty.
These programmes seek to increase awareness amongst SMEs, assist
them in various facets related to up gradation and moving up the value
chain, and to make them internationally competitive. Exim Bank of India
has also brought out a publication on Business Practices of Successful

66

Indian Exporters, outlining the internationalization strategies adopted by

Indian firms including SMEs, facilitate transfer of successful experiences.

Exim Bank of India seeks to create an enable environment to promote

two-way transfer of technology, trade and savings for the SMEs, and
operates a wide range of lending, service and support programmes for
this purpose. The Bank has a variety of loan products to cater to the
financing requirements of enterprises including the SMEs. The credit
services are available for finance at all the stages of an export cycle of
Indian firms.

67

IMPORT/ EXPORT POLICIES

AND

PROCEDURES

OF

UKRAINE
Import /Export Norms

Import-Export Contracts
According to the Law "On Foreign Economic Activities," the single most
important rule is that a foreign economic (or cross-border) contract must
be concluded in written form. Later, the Regulations "On the Form of
Foreign Economic Agreements (Contracts)," approved by Order No. 75 of
the Ministry of Foreign Economic Relations and Trade of Ukraine on
October 5, 1995, provided a variety of standard clauses to be
incorporated into foreign economic agreements executed in Ukraine.

Subsequently, Order No. 75 was rendered ineffective by Order No. 201

"On Approval of
the Regulation on the Form of Foreign Economic Agreements (Contracts)"
issued by the Ministry of Economy & European Integration on September
6, 2001, which provides the guidelines regarding the material terms and
conditions of foreign economic contracts, taking into deliberation the
relevant provisions of worldwide agreements to which Ukraine is a party.

New Licensing Requirements

The Law of Ukraine No. 1315-IV,dated November 20, 2003,introduced
amendment to
Article 16 of the Law "On Foreign Economic Activity" regarding the
licensing of certain foreign economic operations. Such amendments deal
with the licensing of the export/import of goods into Ukraine under either
an "automatic" licensing procedure or a "non-automatic" licensing
68

procedure in certain cases. Automatic licensing grants permission to

subjects of foreign economic activity for the
export or import of goods within a particular period provide that such
goods are not subject to a quota. on the other hand, non-automatic
licensing grants permission to subjects of foreign economic activity within
a particular period for the export or import of goods, which are subject to
quotas (quantitative or otherwise limited).

Required Documents

DOCUMENTATION IMPORT AND EXPORT

Certification for Ukraine

The import regulation rules of Ukraine are principally the same as the
standards of Russian Federation, but there are still some differences in
details. The UkrSEPRO certificate is the pendant of Ukraine to the GOSTR

certificate.

The Ukrainian certification processes are similar to the Russian in the

below-mentioned parts. Necessary are a

product registration,

UkrSEPRO certificate,

GosGorPromNadzor certification (operation license),

Exemption Letter (negative statement)

Hygiene certificate.
However, the process in Ukraine more complicated and to complete the
process successfully it requires an additional expertise concerning the
national law and legislation. The total application costs should also
expected

to

be

higher

69

than

in

Russia.

Another important difference is the practical method of the testing

facilities. The expert of the facilities are conducting there operations
locally in the company. This means, usually they must travel to the
enterprise,

which

make

it

more

cost-intensive.

This doesnt imply the trade with Ukraine is without avail. We can
negotiate the organizational obstacles for you, so you can make lucrative
dealings with your Ukrainian counterparts.
Import Documentation
Import Declaration
Shipments addressed to companies which have to be cleared as formal
entries will require an Import Customs announcement to be prepared by
the consignee, an alternate broker or UPS on behalf of the consignee. For
every formal entry the consignee has to provide original documents to the
customs house:
Customs accreditation card - The companies official recognition card is
issued by the customs authorities. A copy of the accreditation card with an
original company stamp must be provided for each customs declaration.
Tax Committee currency control document - The Tax Committee currency
control document is issued by the tax authorities each quarter. It states
the activities of a company in overseas trade. A copy of this document
with an original company stamp must be provided for each customs
declaration.
Contract between the shipper and consignee - The formal contract covers
the most important issues of the agreement between shipper and
consignee like a description of the commodities, the values of the
products and terms of delivery. A copy of this essay with an original
company stamp must be provided for each customs assertion.

70

Invoice translation - If no invoice in Ukrainian or Russian language is

accompany with the shipment, the company must provide a translated
invoice confirmed with an original company stamp.
Original payment order confirm duties and taxes have been transferred to
Customs account - The original payment order is an electronic receipt of
the customs office after reception duties and taxes. The money transfer
takes at least one day.
For special commodities additional permissions, certificates or approvals
may required by the customs authorities. This may delay the customs
authorization shipment for several days.
Export Documentation

Diplomatic Mail :
A letter headed discreet documentation stating the source of the
consignment, details of the intended recipient and a description of the
contents including the tracking number is required. The document must be
signed by a person working for the embassy.
Passports :
Valid passports can be shipped as documents. The description must
clearly state 'passport'. Shipping passports require the endorsement of the
UK customs authorities. A delay of smallest amount one day has to be
calculated.
Please check the import related information if passports are allowed for
importation.

71

National,

Requirements

Shipments up to a value of 799.99 GBP can be declared informally on the

basis of the invoice.
Shipments in the value range 800 GBP - 2000 GBP have full and formal
individual electronic export declarations which are finished within 14 days
of export.
Shipments exceeding 2000 GBP and those that need organize on export
(for example, temporary exports, return after repair, export licenses)
require formal and full electronic export declaration and positive Customs
clearance prior to export.
UPSservice
UPS offers the service to prepare export declaration on behalf of the
exporter without additional fees.

72

EXPORT
Air Waybill

Description: This document can be used if no country-specific requirements already

exist. A waybill is a document providing for the automatic release of cargo to a
named consignee. It is a receipt of goods but not a negotiable instrument & is an
evidence of contract of carriage. The use of waybill does not affect the terms of the
carriage and the terms of carriage may be different as per the carriers policies
Commercial Invoice
Description: This document can be used if no country-specific requirements already
exist. A commercial invoice is a formal demand note for payment, issued by the
exporter to the importer for goods sold under a sales contract. The document gives
details of the goods sold, payment terms and trade terms. In addition, it is used for
the customs clearance of goods and serves as a base for calculating customs duties.

73

Packing List

Description: This document can be used if no country-specific desires already exist.

A packing list provides details about the shipment such as number of packages,
weight, volume and description of the merchandise. One objective of the packing list
is to facilitate the inspection & survey of the consignment that comprises the
shipment and is included in the invoice. Custom officials & carriers use the packing
list as a check-list to verify the outgoing and incoming cargo.
Performa Invoice
Description: This document can be used if no country-specific wants already exist.
A Performa invoice is a price quote or estimated invoice sent by a seller to a buyer in
advance of a delivery of goods. It informs the buyer of the kind and quantity of
goods, their value, and other important information such as weight and payment
terms. This helps the buyer to make a transaction decision & to confirm the order.

74

Confirmation of Insurance
Description: This document can be used if no country-specific requirements already
exist. A confirmation of insurance is a document issued by an insurance company. It
confirms that an insurance policy has been purchased. It covers the loss or damage
of ships, cargo, terminals, and any transport or cargo by which property is
transferred, acquired, or held between the points of origin and final destination. The
terms and conditions covered are as per the insurance documents.

75

Supporting Institutes to Facilities Export/Import

1. Overseas
Investment

2. ExportUnits

Oriented

3. Financial
Intermediaries
(banks)

Term Financing to overseas Joint Ventures/

Wholly Owned Subsidiaries as well as to Indian
companies towards part financing their equity
investment in overseas JV/ WOS.
Equity Investment Participation in equity of
overseas ventures of Indian companies.
Working Capital Loans to JVs/WOSs
Guarantees to JVs/WOSs
Asset Creation
o Equipment Finance
o Project Finance
Working Capital
o Medium Term (LTWC, WCTL)
o Short Term Finance
Special Products
o Export Marketing Finance
o Export Product Development Finance
o Export Vendor Development Finance
o Research & Development (R&D) Finance
o Finance for Indian Educational Institutions
and setting up institutions abroad
o Finance for Software Technology Parks
o Finance for Development of Minor Ports /
Jetties
o Creative Industry Financing
o Project-related non-fund based guarantees
o Guarantees and stand-by LCs (SBLCs)
o Letters of Credit (LCs)
Refinance to Commercial Banks
Export Bills Rediscounting for commercial banks.

76

Shipping & Packaging

Restrictions : It is forbidden to export precious metals and their derivative, objects of
cultural value with an aim of selling them, rare metals, furs and animal feathers.
Export Taxes : No taxes except on ferrous metals, natural gas, livestock & leather.
Export Clearance : All export products have to be checked first, then authenticated &
possibly

levied

customs

taxes.

The regulation and legislation are based on the Customs Code of Ukraine and the
Kyoto convention.
Necessary Declaration : The following have to be declared: medicines (if more than
5 boxes of the same brand), Ukrainian goods with a value exceeding EUR 200 and
pets.

Organize a transportation of goods to and from Ukraine

By Sea
Waterway systems can be grouped into two main category collections
of rivers and canals that allow ocean ship traffic to reach a region's interior and
geographic regions that might include a mix of seas, bays, straights and sounds.
In Europe, towns and cities grew up along the Rhine River System and the Danube
River System. In China, internal trade began thousands of years ago on the Yangtze
River System, composed of the Yangtze River & its tributaries.
By Air
Our airline connects Ukraine to capital cities & key hubs in Europe, the CIS, Middle
East, Asia, Africa and USA. Through its numerous interline agreements, UIA
operates flights to over 3 000 destinations across the globe.

77

By Rail
State Railways Administration of Ukraine Ukrzaliznytsia for passenger transportation
during Easter holidays has put on additional train No. 269/219 Kyiv-Chernivtsi.
The State Railways Administration of Ukraine plans to repair 404.9 km of track by
June 1 to ensure safety & to increase the capacity of the railways before the summer
transportation season.

78

PART 5 FINANCIAL DATA

Balance Sheet of Superhouse

------------------- in Rs. Cr. ------------------Mar

18
12
mths

EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS
Equity Share Capital
Total Share Capital
Revaluation Reserves
Reserves and Surplus
Total Reserves and Surplus
Money Received Against Share Warrants
Total Shareholders Funds
NON-CURRENT LIABILITIES
Long Term Borrowings
Deferred Tax Liabilities [Net]
Total Non-Current Liabilities
CURRENT LIABILITIES
Short Term Borrowings
Trade Payables
Other Current Liabilities
Short Term Provisions
Total Current Liabilities
Total Capital And Liabilities
ASSETS
NON-CURRENT ASSETS
Tangible Assets
Intangible Assets
Capital Work-In-Progress
Fixed Assets
Non-Current Investments
Long Term Loans And Advances
Other Non-Current Assets
Total Non-Current Assets
CURRENT ASSETS
Inventories
Trade Receivables
Cash And Cash Equivalents
Short Term Loans And Advances
79

Mar 17

Mar 16

Mar 15

12 mths

12 mths

12 mths

11.42
11.42
6.28
244.65
250.93
0.00
262.35

11.42
11.42
1.95
251.40
253.35
0.00
264.77

11.42
11.42
2.04
239.90
241.94
0.00
253.36

11.42
11.42
2.45
209.26
211.71
0.00
223.13

37.92
18.08
56.00

34.47
15.22
49.69

39.40
17.72
57.12

34.58
14.07
48.64

153.35
102.98
59.87
7.08
323.28
641.63

163.00
103.56
71.80
8.05
346.41
660.87

173.12
123.73
59.00
6.06
361.91
672.52

135.04
99.68
58.08
4.87
297.67
569.45

162.06
0.16
77.30
239.52
33.85
10.97
2.60
47.42

167.41
0.43
9.51
177.35
38.18
11.57
2.20
51.95

179.73
0.20
11.79
191.72
53.56
13.10
0.00
66.66

162.74
0.23
16.18
179.15
34.97
10.28
0.00
224.40

202.92
88.52
27.29
13.52

190.66
152.57
33.99
19.50

197.73
129.98
28.19
27.22

173.30
105.16
28.42
16.41

OtherCurrentAssets
Total Current Assets
Total Assets
OTHER ADDITIONAL INFORMATION
CONTINGENT LIABILITIES, COMMITMENTS
Contingent Liabilities
CIF VALUE OF IMPORTS
Raw Materials
Stores, Spares And Loose Tools
Trade/Other Goods
Capital Goods
EXPENDITURE IN FOREIGN EXCHANGE
Expenditure In Foreign Currency
REMITTANCES IN FOREIGN CURRENCIES FOR
DIVIDENDS
Dividend Remittance In Foreign Currency
EARNINGS IN FOREIGN EXCHANGE
FOB Value Of Goods
Other Earnings
BONUS DETAILS
Bonus Equity Share Capital
NON-CURRENT INVESTMENTS
Non-Current Investments Unquoted Book Value
CURRENT INVESTMENTS
Current Investments Quoted Market Value
Current Investments Unquoted Book Value

80

22.44
354.69
641.63

34.85
431.57
660.87

31.02
414.14
672.52

21.76
345.06
569.45

104.39

53.50

107.30

89.16

76.24
33.45
1.95
8.56

114.50
28.30
3.11
1.84

63.07
44.00
2.47
12.18

61.23
30.77
2.47
5.45

30.20

48.58

33.95

32.23

595.03
1.12

750.52
1.02

627.66
1.76

571.43
0.78

37.85

38.22

53.56

34.97

Profit & Loss account of Superhouse

------------------- in Rs. Cr. ------------------Mar

18

Mar 17

Mar 16

Mar 15

12
mths

12 mths

12 mths

12 mths

598.78
3.31
595.47
59.91
655.38
5.05
660.43

850.16
2.87
847.29
61.20
908.49
5.53
914.02

737.45
6.52
730.93
58.11
789.04
10.55
799.59

658.38
3.43
654.95
51.67
706.62
5.40
712.02

424.56
56.12
104.74

478.21
105.85
106.78

422.65
65.42
96.69

389.36
53.78
89.93

-36.60

-43.01

-3.48

-15.40

49.00
15.58
13.45
67.82
694.67

48.53
25.89
15.26
95.10
832.61

50.73
20.51
15.52
77.64
745.68

41.73
19.07
13.25
69.36
661.08

52.31

77.50

55.98

50.93

52.31

77.50

55.98

50.93

18.86
0.43
0.00
19.29

29.93
0.43
0.01
30.37

15.94
2.62
-0.58
17.98

17.40
1.07
0.00
18.47

33.02

47.13

38.00

32.46

33.02
33.02

47.13
47.13

38.00
38.00

32.46
32.46

OTHER ADDITIONAL INFORMATION

EARNINGS PER SHARE
Basic EPS (Rs.)
48.84
Diluted EPS (Rs.)
48.84

48.84
48.84

32.41
32.41

29.00
29.00

INCOME
Revenue From Operations [Gross]
Less: Excise/Sevice Tax/Other Levies
Revenue From Operations [Net]
Other Operating Revenues
Total Operating Revenues
Other Income
Total Revenue
EXPENSES
Cost Of Materials Consumed
Purchase Of Stock-In Trade
Operating And Direct Expenses
Changes In Inventories Of FG,WIP And
Stock-In Trade
Employee Benefit Expenses
Finance Costs
Depreciation And Amortisation Expenses
Other Expenses
Total Expenses
Profit/Loss Before Exceptional,
ExtraOrdinary Items And Tax
Profit/Loss Before Tax
Tax Expenses-Continued Operations
Current Tax
Deferred Tax
Tax For Earlier Years
Total Tax Expenses
Profit/Loss After Tax And Before
ExtraOrdinary Items
Profit/Loss From Continuing Operations
Profit/Loss For The Period

81

VALUE OF IMPORTED AND INDIGENIOUS

RAW MATERIALS
Imported Raw Materials
66.65
Indigenous Raw Materials
219.80
STORES, SPARES AND LOOSE TOOLS
Imported Stores And Spares
41.18
Indigenous Stores And Spares
98.03
DIVIDEND AND DIVIDEND PERCENTAGE
Equity Share Dividend
1.65
Tax On Dividend
0.42
Equity Dividend Rate (%)
15.00

82

67.26
254.33

62.64
228.17

55.22
208.20

50.84
107.64

36.82
95.35

35.03
90.91

1.65
0.35
15.00

1.65
0.35
15.00

1.65
0.34
15.00

BREAK EVEN POINT

PARTICULAR

2018

2017

2016

2015

SALES

655.38

908.49

789.04

706.62

VARIABLE COST

548.82

647.83

581.28

517.67

CONTRIBUTION

106.56

260.66

207.76

188.95

PROFIT VOLUME

16.26%

28.69%

26.33%

26.74%

FIXED COST

78.03

89.68

86.76

74.05

BREAK EVEN POINT

479.89

312.58

329.51

276.92

PROFIT VOLUME RATIO

CONTRIBUTION * 100

FIXED COST

RATIO

SALES

BREAK EVEN POINT

PROFIT VOLUME RATIO

83

Findings & Suggestions

Findings

Turnover of Superhouse Group is more than USD 200 million for the financial
year ending as on 31stMarch 2015

In May 2011, the group acquired Briggs Industrial Footwear Limited, a U.K.
based company

One more company named Linea de seguridadsl in Spain was acquired in

Aug 2012.

Superhouse Group entered safety footwear segment in 1998

Around 57% of footwear value sales in the major EU markets

This is on account of population of 194 million cattle, 70 million buffaloes, and

95 million goats. According to the latest census, India

1192 million pieces of hides and skins per annum spread over different parts
of the country

Some of the tanneries in the Kanpur area are complying with the
environmental regulations; the majority still leaves much to be desired.

Superhouse also has an office / Warehouse in the Luton, United Kingdom and
Sharjah, United Arab Emirates.

To usher in the next phase of export growth, India needs to move up in the
value chain of export goods.

Imported and bonded on arrival for sale at approved duty-free shops, whether
to outgoing or incoming customers, against payments in free foreign
exchange

Superhouse seeks to help foreign companies, particularly in the SME sector,

to establish their products overseas and enter new markets by helping them in
their

export

efforts

by

proactively

assisting

in

locating

overseas

buyers/partners for their products/services.

Superhousesprogramme for supporting product/ process certification aims to

enhance international competitiveness primarily SMEs, through adherence to
international quality systems and standards.

84

There are also initiated a Clusters of Excellence programme, jointly with

NASSCOM in the past, to assist small and medium sized Indian leather
exporting companies in achieving international quality standards.

Superhouse owns and operates 5 independent manufacturing facilities, and

produces 6,500 pairs of shoes, every day.

Superhouse also design customer specific shoes requiring certain additional

properties besides EN 20345:2004 norms, such as Fire retardant, Cold
insulation and Calcium Chloride resistant, etc.

Ukraine, often require foreign companies to partner with a local company

Rather than attempt to partner with or provide a license to foreign companies

Many companies will attempt to enter foreign markets indirectly, by targeting

foreign consumers on the Internet.

Many companies, rather than launching an entirely new venture in a foreign

market, will simply purchase or invest in a foreign company.

85

Suggestions

As Superhouse have an office / Warehouse in the Luton, United Kingdom

and Sharjah, United Arab Emirates. Superhouse should establish an /
Warehouse in European country like Ukraine

Around 57% of footwear value sales in the major EU markets so after

having Warehouse in Ukraine it will save the cost of transportation for
targeting markets of European countries

LUX-ELITE is a Ukrainian shoes manufacturing company having high

demand for shoes and requires more finished leather so Superhouse
should tie up with LUX-ELITE to expand the business

SUMKIODUA is Ukrainian manufacturing company leather bags which

requires high amount of finished leather so Superhouse should export their
finished leather to them

As Superhouse has also targeted the market segment of womens so

Superhouse should collaborate with VIKONT is a company in ukraine
manufacturing ladies' leather footwear

Fish leather products is more preferred in Ukraine but in not in India so

Superhouse should develop a new products of Fish leather products in
India

As india is the country having highest population of cattle it is suggested

that Superhouse should focus on exporting raw leather

Florind Shoes Ltd., Punihani International, Farida Shoes Ltd. Are the major
Indian leather exporters so it is suggested that Superhouse tie up with
these companies

86

Conclusion in terms of Export Import opportunities w.r.t. Leather

Foot Wear between India and Ukraine
The Indian leather industry today has established itself as a prominent industry both
in international as well as in the domestic market. Apart from being the ninth largest
exporter of leather and leather products it is also the second largest producer of
footwear and leather garments. The sector itself employs more than 2.5 million
people and is one of the top foreign currency earners in India. Abundant raw
material, skilled work force, compliance with environmental standards and growth
shown by the associated industries has helped the sector to grow.
The leather and leather products export of India; Indian footwear sector has a
significant position in the leather industry
The Indian leather industry is eyeing an opportunity to increase exports to the
European and other countries, at time when Chinese shipments to these markets are
becoming more expensive, said senior officials from the Council of Leather Exports
(CLE). The Council is the nodal agency for the international promotion and overall
development of the Indian leather and leather products industry.
Indian exports were focusing in us and other countries; there is an opportunity in the
Ukraine and other countries that are opening up to Indian exports.
Markets of Ukraine and other European countries has been mainly served by China
so far, but with the cost of production going up in China, the products from that
country are getting expensive and India has spotted an opportunity to export to these
countries.
The industry has already started training programs to create adequate skilled
manpower to meet the target and expects more overseas companies to come to
India and set up operations in future
The major product of Superhouse is safety shoes so there is an opportunity for
Superhouse to target various companies in Ukraine
NaftogazUkrainy, Krivorizhstal, Industrial Union of Donbas, Ukrnafta, Galnaftogaz
are the major companies in Ukraine which requires safety shoes for their workers
87

and employees so Superhouse can export their safety shoes to these companies
which increase the sales of Superhouse and give maximum profit margin.

88

BIBLIOGRAPHY
http://www.euromonitor.com/footwear
http://www.tradingeconomics.com/ukraine/imports
http://gcpcenvis.nic.in/Experts/Leather%20Industries.pdf
http://www.indiacom.com/yellow-pages/leather-industry-suppliers/gujarat/
http://atlas.media.mit.edu/en/profile/country/ukr/#Exports
https://en.wikipedia.org/wiki/Ukraine
http://www.tradingeconomics.com/ukraine
http://ec.europa.eu/trade/import-and-export-rules/export-from-eu/
http://ec.europa.eu/trade/import-and-export-rules/
http://www.webcrawler.com/info.wbcrwl.305.t89/search/web?fcoid=417&fcop=topnav&fpid
=2&cid=157056204&ad.segment=info.wbcrwl.305.10&ad.device=c&aid=910d9b6f-ec874084-82bd4fce26cd81e4&ridx=2&q=export+IMPORT%2F+EXPORT+POLICIES+AND++PROCED
URES++OF+EUROPE&ql=&ss=t
https://www.gov.uk/guidance/clothing-footwear-and-fashion
https://en.wikipedia.org/wiki/Foreign_market_entry_modes
http://www.indianindustry.com/trade-information/documents-required.html
http://search.indianindustry.com/cgi/search.php?ss=footware%20industry%20export%20poli
cy%20of%20india
http://www.exim-policy.com/
http://www.tradingeconomics.com/ukraine/imports
http://atlas.media.mit.edu/en/visualize/tree_map/hs92/export/ukr/show/6403/2013/
http://atlas.media.mit.edu/en/profile/country/ukr/#Exports

89

ANNEXURE
Balance Sheet of Superhouse

------------------- in Rs. Cr. ------------------Mar

18
12
mths

EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS
Equity Share Capital
Total Share Capital
Revaluation Reserves
Reserves and Surplus
Total Reserves and Surplus
Money Received Against Share Warrants
Total Shareholders Funds
NON-CURRENT LIABILITIES
Long Term Borrowings
Deferred Tax Liabilities [Net]
Total Non-Current Liabilities
CURRENT LIABILITIES
Short Term Borrowings
Trade Payables
Other Current Liabilities
Short Term Provisions
Total Current Liabilities
Total Capital And Liabilities
ASSETS
NON-CURRENT ASSETS
Tangible Assets
Intangible Assets
Capital Work-In-Progress
Fixed Assets
Non-Current Investments
Long Term Loans And Advances
Other Non-Current Assets
Total Non-Current Assets
CURRENT ASSETS
Inventories
Trade Receivables
Cash And Cash Equivalents
Short Term Loans And Advances
OtherCurrentAssets
90

Mar 17

Mar 16

Mar 15

12 mths

12 mths

12 mths

11.42
11.42
6.28
244.65
250.93
0.00
262.35

11.42
11.42
1.95
251.40
253.35
0.00
264.77

11.42
11.42
2.04
239.90
241.94
0.00
253.36

11.42
11.42
2.45
209.26
211.71
0.00
223.13

37.92
18.08
56.00

34.47
15.22
49.69

39.40
17.72
57.12

34.58
14.07
48.64

153.35
102.98
59.87
7.08
323.28
641.63

163.00
103.56
71.80
8.05
346.41
660.87

173.12
123.73
59.00
6.06
361.91
672.52

135.04
99.68
58.08
4.87
297.67
569.45

162.06
0.16
77.30
239.52
33.85
10.97
2.60
47.42

167.41
0.43
9.51
177.35
38.18
11.57
2.20
51.95

179.73
0.20
11.79
191.72
53.56
13.10
0.00
66.66

162.74
0.23
16.18
179.15
34.97
10.28
0.00
224.40

202.92
88.52
27.29
13.52
22.44

190.66
152.57
33.99
19.50
34.85

197.73
129.98
28.19
27.22
31.02

173.30
105.16
28.42
16.41
21.76

Total Current Assets

Total Assets
OTHER ADDITIONAL INFORMATION
CONTINGENT LIABILITIES, COMMITMENTS
Contingent Liabilities
CIF VALUE OF IMPORTS
Raw Materials
Stores, Spares And Loose Tools
Trade/Other Goods
Capital Goods
EXPENDITURE IN FOREIGN EXCHANGE
Expenditure In Foreign Currency
REMITTANCES IN FOREIGN CURRENCIES FOR
DIVIDENDS
Dividend Remittance In Foreign Currency
EARNINGS IN FOREIGN EXCHANGE
FOB Value Of Goods
Other Earnings
BONUS DETAILS
Bonus Equity Share Capital
NON-CURRENT INVESTMENTS
Non-Current Investments Unquoted Book Value
CURRENT INVESTMENTS
Current Investments Quoted Market Value
Current Investments Unquoted Book Value

91

354.69
641.63

431.57
660.87

414.14
672.52

345.06
569.45

104.39

53.50

107.30

89.16

76.24
33.45
1.95
8.56

114.50
28.30
3.11
1.84

63.07
44.00
2.47
12.18

61.23
30.77
2.47
5.45

30.20

48.58

33.95

32.23

595.03
1.12

750.52
1.02

627.66
1.76

571.43
0.78

37.85

38.22

53.56

34.97

PART 5 FINANCIAL DATA

Balance Sheet of Superhouse

------------------- in Rs. Cr. ------------------Mar

18
12
mths

EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS
Equity Share Capital
Total Share Capital
Revaluation Reserves
Reserves and Surplus
Total Reserves and Surplus
Money Received Against Share Warrants
Total Shareholders Funds
NON-CURRENT LIABILITIES
Long Term Borrowings
Deferred Tax Liabilities [Net]
Total Non-Current Liabilities
CURRENT LIABILITIES
Short Term Borrowings
Trade Payables
Other Current Liabilities
Short Term Provisions
Total Current Liabilities
Total Capital And Liabilities
ASSETS
NON-CURRENT ASSETS
Tangible Assets
Intangible Assets
Capital Work-In-Progress
Fixed Assets
Non-Current Investments
Long Term Loans And Advances
Other Non-Current Assets
Total Non-Current Assets
CURRENT ASSETS
Inventories
Trade Receivables
Cash And Cash Equivalents
Short Term Loans And Advances
92

Mar 17

Mar 16

Mar 15

12 mths

12 mths

12 mths

11.42
11.42
6.28
244.65
250.93
0.00
262.35

11.42
11.42
1.95
251.40
253.35
0.00
264.77

11.42
11.42
2.04
239.90
241.94
0.00
253.36

11.42
11.42
2.45
209.26
211.71
0.00
223.13

37.92
18.08
56.00

34.47
15.22
49.69

39.40
17.72
57.12

34.58
14.07
48.64

153.35
102.98
59.87
7.08
323.28
641.63

163.00
103.56
71.80
8.05
346.41
660.87

173.12
123.73
59.00
6.06
361.91
672.52

135.04
99.68
58.08
4.87
297.67
569.45

162.06
0.16
77.30
239.52
33.85
10.97
2.60
47.42

167.41
0.43
9.51
177.35
38.18
11.57
2.20
51.95

179.73
0.20
11.79
191.72
53.56
13.10
0.00
66.66

162.74
0.23
16.18
179.15
34.97
10.28
0.00
224.40

202.92
88.52
27.29
13.52

190.66
152.57
33.99
19.50

197.73
129.98
28.19
27.22

173.30
105.16
28.42
16.41

OtherCurrentAssets
Total Current Assets
Total Assets
OTHER ADDITIONAL INFORMATION
CONTINGENT LIABILITIES, COMMITMENTS
Contingent Liabilities
CIF VALUE OF IMPORTS
Raw Materials
Stores, Spares And Loose Tools
Trade/Other Goods
Capital Goods
EXPENDITURE IN FOREIGN EXCHANGE
Expenditure In Foreign Currency
REMITTANCES IN FOREIGN CURRENCIES FOR
DIVIDENDS
Dividend Remittance In Foreign Currency
EARNINGS IN FOREIGN EXCHANGE
FOB Value Of Goods
Other Earnings
BONUS DETAILS
Bonus Equity Share Capital
NON-CURRENT INVESTMENTS
Non-Current Investments Unquoted Book Value
CURRENT INVESTMENTS
Current Investments Quoted Market Value
Current Investments Unquoted Book Value

93

22.44
354.69
641.63

34.85
431.57
660.87

31.02
414.14
672.52

21.76
345.06
569.45

104.39

53.50

107.30

89.16

76.24
33.45
1.95
8.56

114.50
28.30
3.11
1.84

63.07
44.00
2.47
12.18

61.23
30.77
2.47
5.45

30.20

48.58

33.95

32.23

595.03
1.12

750.52
1.02

627.66
1.76

571.43
0.78

37.85

38.22

53.56

34.97

Profit & Loss account of Superhouse

------------------- in Rs. Cr. ------------------Mar

18

Mar 17

Mar 16

Mar 15

12
mths

12 mths

12 mths

12 mths

598.78
3.31
595.47
59.91
655.38
5.05
660.43

850.16
2.87
847.29
61.20
908.49
5.53
914.02

737.45
6.52
730.93
58.11
789.04
10.55
799.59

658.38
3.43
654.95
51.67
706.62
5.40
712.02

424.56
56.12
104.74

478.21
105.85
106.78

422.65
65.42
96.69

389.36
53.78
89.93

-36.60

-43.01

-3.48

-15.40

49.00
15.58
13.45
67.82
694.67

48.53
25.89
15.26
95.10
832.61

50.73
20.51
15.52
77.64
745.68

41.73
19.07
13.25
69.36
661.08

52.31

77.50

55.98

50.93

52.31

77.50

55.98

50.93

18.86
0.43
0.00
19.29

29.93
0.43
0.01
30.37

15.94
2.62
-0.58
17.98

17.40
1.07
0.00
18.47

33.02

47.13

38.00

32.46

33.02
33.02

47.13
47.13

38.00
38.00

32.46
32.46

OTHER ADDITIONAL INFORMATION

EARNINGS PER SHARE
Basic EPS (Rs.)
48.84
Diluted EPS (Rs.)
48.84

48.84
48.84

32.41
32.41

29.00
29.00

INCOME
Revenue From Operations [Gross]
Less: Excise/Sevice Tax/Other Levies
Revenue From Operations [Net]
Other Operating Revenues
Total Operating Revenues
Other Income
Total Revenue
EXPENSES
Cost Of Materials Consumed
Purchase Of Stock-In Trade
Operating And Direct Expenses
Changes In Inventories Of FG,WIP And
Stock-In Trade
Employee Benefit Expenses
Finance Costs
Depreciation And Amortisation Expenses
Other Expenses
Total Expenses
Profit/Loss Before Exceptional,
ExtraOrdinary Items And Tax
Profit/Loss Before Tax
Tax Expenses-Continued Operations
Current Tax
Deferred Tax
Tax For Earlier Years
Total Tax Expenses
Profit/Loss After Tax And Before
ExtraOrdinary Items
Profit/Loss From Continuing Operations
Profit/Loss For The Period

94

VALUE OF IMPORTED AND INDIGENIOUS

RAW MATERIALS
Imported Raw Materials
66.65
Indigenous Raw Materials
219.80
STORES, SPARES AND LOOSE TOOLS
Imported Stores And Spares
41.18
Indigenous Stores And Spares
98.03
DIVIDEND AND DIVIDEND PERCENTAGE
Equity Share Dividend
1.65
Tax On Dividend
0.42
Equity Dividend Rate (%)
15.00

95

67.26
254.33

62.64
228.17

55.22
208.20

50.84
107.64

36.82
95.35

35.03
90.91

1.65
0.35
15.00

1.65
0.35
15.00

1.65
0.34
15.00

Profit & Loss account of Superhouse

INCOME
Revenue From Operations [Gross]
Less: Excise/Sevice Tax/Other Levies
Revenue From Operations [Net]
Other Operating Revenues
Total Operating Revenues
Other Income
Total Revenue
EXPENSES
Cost Of Materials Consumed
Purchase Of Stock-In Trade
Operating And Direct Expenses
Changes In Inventories Of FG,WIP And
Stock-In Trade
Employee Benefit Expenses
Finance Costs
Depreciation And Amortisation Expenses
Other Expenses
Total Expenses
Profit/Loss Before Exceptional,
ExtraOrdinary Items And Tax
Profit/Loss Before Tax
Tax Expenses-Continued Operations
Current Tax
Deferred Tax
Tax For Earlier Years
Total Tax Expenses
Profit/Loss After Tax And Before
ExtraOrdinary Items
Profit/Loss From Continuing Operations
Profit/Loss For The Period

------------------- in Rs. Cr. ------------------Mar

18

Mar 17

Mar 16

Mar 15

12
mths

12 mths

12 mths

12 mths

598.78
3.31
595.47
59.91
655.38
5.05
660.43

850.16
2.87
847.29
61.20
908.49
5.53
914.02

737.45
6.52
730.93
58.11
789.04
10.55
799.59

658.38
3.43
654.95
51.67
706.62
5.40
712.02

424.56
56.12
104.74

478.21
105.85
106.78

422.65
65.42
96.69

389.36
53.78
89.93

-36.60

-43.01

-3.48

-15.40

49.00
15.58
13.45
67.82
694.67

48.53
25.89
15.26
95.10
832.61

50.73
20.51
15.52
77.64
745.68

41.73
19.07
13.25
69.36
661.08

52.31

77.50

55.98

50.93

52.31

77.50

55.98

50.93

18.86
0.43
0.00
19.29

29.93
0.43
0.01
30.37

15.94
2.62
-0.58
17.98

17.40
1.07
0.00
18.47

33.02

47.13

38.00

32.46

33.02
33.02

47.13
47.13

38.00
38.00

32.46
32.46

OTHER ADDITIONAL INFORMATION

96

EARNINGS PER SHARE

Basic EPS (Rs.)
48.84
Diluted EPS (Rs.)
48.84
VALUE OF IMPORTED AND INDIGENIOUS
RAW MATERIALS
Imported Raw Materials
66.65
Indigenous Raw Materials
219.80
STORES, SPARES AND LOOSE TOOLS
Imported Stores And Spares
41.18
Indigenous Stores And Spares
98.03
DIVIDEND AND DIVIDEND PERCENTAGE
Equity Share Dividend
1.65
Tax On Dividend
0.42
Equity Dividend Rate (%)
15.00

97

48.84
48.84

32.41
32.41

29.00
29.00

67.26
254.33

62.64
228.17

55.22
208.20

50.84
107.64

36.82
95.35

35.03
90.91

1.65
0.35
15.00

1.65
0.35
15.00

1.65
0.34
15.00