Thomas Bata Confident Of Dividend From Local Arm

Thomas J Bata, the octogenarian chairman of Bata (Bn) Bv and his powerful international board, Compass Ltd, have reviewed the investment of $10 million in India by the Bata Shoe Organisation (BSO). They expressed confidence that sufficient profitability will be generated soon by the company to pay a dividend to its shareholders, and fund its own investment plans.

For the year ending December 31, 1996, Bata India's board of directors did not declare a dividend despite the fact that the company made a profit of Rs 4.15 crore. This was probably because the company had just staged a turnaround from a loss of Rs 42.16 crore in 1995, and the board of directors wanted to play it safe.

 

In terms of sales, Bata has grown by 13 per cent. This year, the company sold 56 million pairs of shoes, as against last year's 50 million. The company also achieved its highest ever turnover of Rs 669.31 crore.

However, the question is when the shareholders will be given a dividend, now that the company is on its way up. Company spokesman, senior vice president and member of the executive committee, M J Z Mowla declined to comment on exactly when the moment would be ripe to declare a dividend.

The Compass board also felt that the company has now attained self-sufficiency, and no further external investment will be contemplated until the company generated returns by way of dividend. "The Compass board has given its support to the company's future programmes." said Mowla. He added that the Compass board had categorically told the Bata India board that the company was "on the right track".

The Compass board, which comprises stalwarts of the international business scene, held its meeting on February 28, for the first time in India, re-affirming the importance that the parent gives to its Indian operations.

The chairman of the board, Thomas H B Symons told Business Standard : It has been immensely worthwhile to visit the factory at Batanagar, the retail outlets and meet the management and staff in India. He also said that there is always room for improvement and India provides wonderful opportunities. "There is great opportunity for increased productivity and greater marketing" said Symons.

Said Mowla: "The Compass board has been impressed by the company's performance and will continue to give us technical assistance whenever it is needed by us".