Case
Teaching Notes
Supplementary Resources
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.
This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.
2024 Sage Publications, Inc. All Rights Reserved
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.
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
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)
- Late Mr. Chhoga Lal (Mrs. Lad Kanwar)
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)
- Mr. Ajit Jain (45) (Mrs. Saroj)
- 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)
- Mr. Gyarsi Lal (65) (Mrs. Vimla Devi)
This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.
2024 Sage Publications, Inc. All Rights Reserved