Shubham Traders

Abstract

Niranjan Kumar Jain is a successful entrepreneur presiding over a multi-million-rupee textile retail business, which he established from scratch about two decades ago in Rajasthan’s Udaipur city in northwest India. Even as his flagship company Shubham Traders has evolved into a reputed business house with multiple outlets, Niranjan is a worried man. None of his three children are interested in the family trade, which presents a dilemma to him over the issue of succession. Contrary to his expectations, all his ‘natural’ successors have expressed indifference in the family business and have chosen to pursue their respective passions. Niranjan’s challenge of finding a suitable successor for his business while securing his own future interests provides an interesting backdrop for students to understand the complexities of family business establishments in India and to explore various options available to him to work out a smooth transition of ownership without letting the business wither away. Students are also asked to suggest a course of action for Niranjan to ensure business continuity after his retirement.

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Resources
Appendix 1: Timeline of Niranjan’s Life

Year

Event

1962

Birth

1975

Joins elder brother Gyarsi Lal as an apprentice

1979

Starts working as partner with Gyarsi Lal on 40:60 sharing basis

1989

Starts own cloth business for tribal people and villagers in Chandpole locality

1991

Business expands, purchases space for shop

1997

Inaugurates first showroom of Shubham Traders, changes product mix to target local urban clients in the neighborhood itself

1997–2006

The new product mix includes cut pieces, dress material for urban customers in the locality. Business is good despite challenges of credit recovery and utterly price-conscious clients

2006

Seeks to broaden the customer base with wider product lines including formal ethnic garments in addition to dress material for marriages and festive occasions

2008

Expands the product line further by adding sarees and embroidered dress material. Also offers customization and alteration services to customers

2012–13

Engages Mukesh Maroo as prime helping hand

2013–15

Son Shubham joins the business but quits to pursue theater

2014–present

Eldest daughter Khushboo joins business to support father

2016

Second showroom Parinaya is inaugurated

Appendix 2a: Balance Sheet of Shubam Traders in FY 2015

The data from the balance sheet are tabulated as follows.

SHUBHAM TRADERS

27, GOGAWAT WADI CHANDPOLE UDAIPUR

TRADING AND P & L ACCOUNT FOR THE YEAR ENDED ON 31-3-2016

PARTICULARS

AMOUNT

PARTICULARS

AMOUNT

TO OPENING STOCK

1375272.00

BY SALES

5958038.00

 

 

 

TO PURCHASES

5028749.00

BY CLOSING STOCK

1301570.00

- LOCAL 2725098.00

 

 

- OUTSIDE THE STATE 2432932.00

 

5158030.00

- LESS DISCOUNT RECE 129281.00

 

TO INWARD FREIGHT

16108.00

- LOCAL 4263.00

 

- OUTSIDE THE STATE 11845.00

 

TO GROSS PROFIT C/D

839479.00

 

7259608.00

7259608.00

TO ACCOUNTING CHARGES

7000.00

BY GROSS PROFIT B/D

839479.00

TO AUDIT FEES

 

 

 

TO BANK COMMISSION

11743.00

TO BANK INTEREST PAID

42523.00

TO DEPRECIATION ACCOUNT

10703.00

TO ELECTRICITY EXP

90154.00

TO INSURANCE EXPENSES

9799.00

TO LEGAL & PROF FEES EXP

4000.00

TO MOBILE & TELEPHONE EXP

5300.00

TO NEWS PAPER & PERI EXP

878.00

TO PRINTING AND STATIONERY

1300.00

TO SALARY ACCOUNT

90000.00

TO SHOP EXPENSES

19400.00

TO TRAVELING EXP

18780.00

TO NET PROFIT

527899.00

(TRFD TO CAPITAL)

 

TOTAL

839479.00

TOTAL

839479.00

This is followed by an office stamp with a signature on the right-side corner.

The balance sheet statement of Shubham Traders for the financial year 2015.

Appendix 2b: Balance Sheet of Shubham Traders in FY 2014

The data from the balance sheet are tabulated as follows.

SHUBHAM TRADERS

27, GOGAWAT WADI CHANDPOLE UDAIPUR

TRADING AND P & L ACCOUNT FOR THE YEAR ENDED ON 31-3-2015

PARTICULARS

AMOUNT

PARTICULARS

AMOUNT

TO OPENING STOCK

1351467.00

BY SALES

7573283.00

 

 

 

TO PURCHASES

BY CLOSING STOCK

1375272.00

- LOCAL 2789694.00

6592014.50

 

- OUTSIDE THE STATE 3931621.50

 

6721315.50

- LESS DISCOUNT RECE 129301.00

 

TO INWARD FREIGHT

19280.00

- LOCAL 3920.00

 

- OUTSIDE THE STATE 15360.00

 

TO GROSS PROFIT C/D

985793.50

 

8948555.00

8948555.00

TO ACCOUNTING CHARGES

18000.00

BY GROSS PROFIT B/D

985793.50

TO AUDIT FEES

4500.00

 

 

TO BANK COMMISSION

10540.00

TO BANK INTEREST PAID

63627.00

TO DEPRECIATION ACCOUNT

12311.00

TO ELECTRICITY EXP

47402.00

TO INSURANCE EXPENSES

5583.00

TO LEGAL & PROF FEES EXP

3000.00

TO MISC ROUND OFF

5.00

TO MOBILE AND TELEPHONE EXP

4550.00

TO PRINTING AND STATIONERY

5470.00

TO SALARY ACCOUNT

336000.00

TO SHOP EXPENSES

25975.00

TO TRAVELING EXP

15750.00

TO NET PROFIT

433080.50

(TRFD TO CAPITAL)

 

TOTAL

985793.50

TOTAL

985793.50

FOR SHUBHAM TRADERS AS PER AUDIT REPORT OF EVEN DATE ANNEXED

FOR KOTHARI CHOUDHARY & ASSOCIATES

CHARTERED ACCOUNTANT

FRN 019935C

(SMT CHANDRA KANTA)

PROPRIETOR

This is followed by an office stamp in the center and a signature on the right-side corner.

CA YASHDEEP KOTHARI

(PARTNER)

M NO 426080

PLACE – UDAIPUR

DATE – 29 09 2015

The balance sheet statement of Shubham Traders for the financial year 2014.

Appendix 3: Family Tree of Sukh Lal, Niranjan’s Grandfather

Data shown in the family tree are listed as follows.

  • Late Mr. Sukh Lal (Mrs. Suhag Devi)
    • Late Mr. Chhoga Lal (Mrs. Lad Kanwar)
      • Mr. Girdhari Lal (Mrs. Jeeva Devi)
    • Mr. Sohan Lal (Mrs. Dakhi Bai)
      • Mr. Suresh (Mrs. Gunmala)
      • Mr. Sumati Prakash (Mrs. Vanmala)
    • Late Mr. Udai Lal (Mrs. Lajja Devi)
      • Mr. Bhanwar Lal (Mrs. Roshan Devi)
      • Mr. Rajkumar (Mrs. Chakhi Devi)
      • Mr. Lakshmi Lal (Mrs. Saroj Devi)
      • Mr. Anil Kumar (Mrs. Lali Devi)
    • Late Mr. Ganesh Lal (Mrs. Kanchan Devi)
      • Mr. Gyarsi Lal (Mrs. Vimla Devi)
      • Late Mr. Devi Lal (Mrs. Nirmala Devi)
      • Mr. Niranjan Kumar (Mrs. Chandrakanta Devi)
The family tree of the late Mr. Sukh Lal (Mrs. Suhag Devi).

Appendix 4: Niranjan’s Family Tree

Data shown in the family tree are listed as follows:

  • Late Mr. Ganesh Lal (Mrs. Kanchan Devi)
    • Mr. Gyarsi Lal (65) (Mrs. Vimla Devi)
      • Mr. Ajit Jain (45) (Mrs. Saroj)
        • Ms. Archi (18)
        • Mr. Divya (15)
      • Mr. Sunil Jain (42) (Mrs. Jyoti)
        • Ms. Ansh (10)
        • Mr. Aryan (10)
    • Late Mr. Devi Lal (Mrs. Nirmala Devi)
      • Mr. Ronak (27)
      • Ms. Priyanka (24)
      • Ms. Ranu (22)
      • Ms. Swati (19)
    • Mr. Niranjan Kumar (58) (Mrs. Chandra Kanta)
      • Ms. Khushboo (30)
      • Ms. Nikky (27)
      • Mr. Shubham (25)
The family tree of Mr. Niranjan Kumar.

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