Subhiksha: Failed Business Model or Unethical Practices? 145
Vendor payments
Subhiksha defaulted on vendor payments also. The default was of the magnitude of Rs 35 crores.
Auditor
The offi cial auditor of the fi rm Deloitte did not publish any fi nancial statements from 2007. There was an overstatement of accounts, fake inventory, fake bills and fake companies that money was transferred to.
EXHIBIT I: Major national players in the Indian organized retail sector
Store Name Started Group Name No. of Stores*
Store Segments
Positioning Strength Reliance
Fresh
2006 Reliance Industries Limited
560 Supermarket Quality Strong
fi nancial support, effi cient inventory management
More 2007
(merged with Trinethra)
Aditya Birla Retail Limited
320 (100 Fabmalls + 220 Trinetra stores)
Supermarket Hypermarket
Convenience Store
Local presence
Spencer’s 2006 RPG Group N/A Supermarket
Hypermarket
Quality Strong fi nancial support, huge product assortment Food World 1995 Dairy Farm
International (DFI) Group
60 Supermarket
Hypermarket Express stores
Convenience Store
N/A
Food Bazaar 2002 Future Group 102 Supermarket Discount Store
Strong fi nancial support, huge product assortment
Subhiksha 1997 - 1100 Supermarket Discount
Store
Huge network of stores, everyday low pricing
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EXHIBIT II: Supply chain stages involved in merchandise movement from manufacturer to distribution Centre
Manufacturing Plant
Delivery Truck
Distribution Centre
Receiving at DC
Put Away
Receiving Orders at DC from Retailers Kitting Process
Picking Packaging Shipping
Distribution
distribution centre process at
Inventory Audit
Stacking in DC DC Placing fresh
order to Manufacturer
Source: Amarthi Consulting
Subhiksha: Failed Business Model or Unethical Practices? 147
EXHIBIT III: Financials of Subhiksha retail (2004–2007)
PARTICULARS Mar-2007 Mar-2006 Mar-2005 Mar-2004
Share Capital 29.2 24.7 20 20
Reserves & Surplus 87.27 40.66 5.19 5.05
Net Worth 117.17 65.36 21.84 21.7
Shareholder’s Funds 116.47 65.36 25.19 25.05
Secured Loans 80.01 20.54 16.73 15.68
Unsecured Loans 0 0.31 0.4 0.5
Total Debts 80.01 20.85 17.13 16.18
Total Liabilities 196.48 86.22 42.32 41.23
Gross Block 39.08 23.31 20.21 15.46
Less: Accumulated Depreciation 10.37 7.75 5.26 3.01
Capital Work in Progress 50.04 0 0 0
Inventories 57.29 34.44 28.05 24.15
Sundry Debtors 0.01 .83 0.25 0.40
Cash and Bank 65.04 37.8 1.2 1.99
Loans and Advances 22.66 7.59 4.08 3.98
Total Current Assets 145 80.66 33.58 30.52
Current Liabilities 21.69 2.67 2.63 2.26
Provisions 3.94 5.74 1.98 0.84
Less Total Current Liabilities 25.63 8.41 4.62 3.1
Net Current Assets 119.37 72.25 28.97 27.42
Total Assets 196.48 86.22 43.32 41.23
EXHIBIT IV: List of banks and their respective receivables from Subhik- sha
Bank Rs Crores
HSBC 85
ABN AMRO 50
Centurion Bank of Punjab 40
YES Bank 50
Standard Chartered Bank 25
HDFC Bank 65
Development Credit Bank 25
Federal Bank 50
Bank of Baroda 75
ICICI Bank 155
Kotak Mahindra Bank 40
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REFERENCES
Subhiksha: Subhiksha ties up with vJive Networks, The Economic Times, 20 Mar, 2007
htp://economictimes.indiatimes.com/News/News_By_Industry/Services/Retailing/Subhiksha_ties_
up_with_vJive_Networks/articleshow/1785276.cms Subhiksha, India’s largest retail chain
Source: http://www.rediff.com/money/2007/feb/05bspec.htm Subhiksha to increase retail outlets, The Hindu
Subhiksha growing at a scorching pace; to double network and revenue in six months; betting big on mobile phones, India Retail Biz
Source: http://www.hindu.com/2006/07/15/stories/2006071517851900.htm Subhiksha Website, Source: www.subhiksha.in
Subhiksha to open 100 stores in Mumbai in one month; announces 1,000 stores within one year. India Retail Biz, December 13, 2006
Source: http://indiaretailbiz.wordpress.com/2006/12/13/ subhikshatoopen 100 storesinmumbaiplans 1000 inindiawithinoneyear/
Success story of Subhiksha, India’s largest retail chain, February 05, 2007 Subhiksha to enter into online Stores, The Economic Times.
http://www.rediff.com/money/2007/feb/05bspec.htm
Source:http://economictimes.indiatimes.com/articleshow/2456436.cms
Subhiksha to create private label portfolio, The Economic Times, 15 November, 2006, Source: http://economictimes.indiatimes.com/articleshow/447925.cms
Making of Largest Retail chain in India: Subhiksha. Dec 12
Source:www.startupavenues.com/news/2007/02/08/makingofl argestretailchaininindiasubhiksha/
Subhiksha aims 1000 retails stores
Source: in.news.yahoo.com/061212/43/6a8e0.html
After grocery, Subhiksha eyes mobile phone market. Business Daily from The Hindu group of publica- tions Thursday, Jul 26, 2007
http://www.thehindubusinessline.com/2007/07/26/stories/2007072651350500.htm IMAGES India Retail Report 2007 Source: www.imagesretail.com/india_retail_report.htm Subhiksha draws up cluster bombing plan, The Economic Times, 6 December, 2006,
Source: http://economictimes.indiatimes.com/News/News_By_Company/Companies_A
Z/S_Companies_/Subhiksha/Subhiksha_draws_up_clusterbombing_plan/articleshow/726435. cms Subhiksha: The common man’s retailer, The Economic Times, 2 October, 2007, 0005 hrs
Source:http://economictimes.indiatimes.com/Interview/R_Subramanian_MD_Subhiksha_Trading_
Services/articleshow/2420996.cms
http://www.indiaretailbiz.com/blog/category/indian retalers/subhiksha subramanians/
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http://www.rediff.com/money/2009/jan/31inter-subhiksha-has-run-out-of-cash.htm
http://www.business-standard.com/india/news/subhiksha-promoter-sends-legal-notice-to-azim- premji/408350/
http://www.livemint.com/2010/03/16234728/ICICI-VentureSubhiksha-stake.html
Subhiksha: Failed Business Model or Unethical Practices? 149
http://www.livemint.com/2008/09/05001546/Subhiksha-not-paying-some-bill.html
http://www.business-standard.com/india/news/pf-offi ce-to-attach-subhikshas-bank-ac/351392/
http://www.livemint.com/2009/02/23234247/ICICI-Venture-joins-hands-with.html http://india.retailmantra.com/2011/04/subhiksha-rise-fall-case-study.html
http://www.financialexpress.com/news/subhiksha-to-shut-20-of-its-outlets-enlarge-board- md/431483/0
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http://www.newstrackindia.com/newsdetails/69529
http://retailbrains.blogspot.com/2009/11/subhiksha-retail-phenomenon-which.html http://store.businessmonitor.com/article/233418
http://www.sify.com/fi nance/subhiksha-to-invest-rs-1-200-cr-for-expansion-by-2010-news-news-jegr- JLcgeih.html
http://www.sify.com/fi nance/subhiksha-plans-ipo-this-year-news-equity-jeglRTiidbf.html http://www.livemint.com/2009/05/20214016/Subhiksha-submits-fi nancial-pa.html http://www.allbusiness.com/banking-fi nance/fi nancial-markets-investing/11876467-1.html http://parasadenwala.blogspot.com/2011/08/why-subhiksha-trading-services.html
http://www.moneycontrol.com/news/cnbc-tv18-comments/sfi o-to-submit-subhiksha-inquiry-report-to- mca-sources_534520.html
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Tata Motors and Singur Controversy: Unethical Practices?
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I observed families riding two-wheelers – the father driving the scooter, his young kid standing in front of him, his wife seated behind him holding a little baby. It led me to wonder whether one could conceive of a safe, affordable, all-weather form of transport for such a family.
–Mr. Ratan Tata said when he unveiled the Tata Nano in 2008 Let me just say it is not just political, because I happen to know that some of our competitors are also fuelling some of this fi re… they would be very happy if the Nano project got delayed.
–Mr. Ratan Tata said in an interview to NDTV I will not call off my fast, unless the state government gives back land to unwilling farmers. Now, if anything happens to me, the state government will be responsible for it.
–Mamata Banerjee