INTRODUCTION OF THE COMPANY

Kishore Apparels Ltd has come a long way since Late Shri Shayam Kishore Gupta first
dreamt of manufacturing quality Garments and started Biswanath Hosiery Mills in 1957. The
Company has continued to grow and innovate with a number of pioneering initiatives in the
industry, and in the last 20 years, has shown a massive growth of 40 times!
Pioneering Initiatives
Pioneering initiatives by Kishore Apparels Ltd include launching the Consumer Coupon
Scheme in 1992 (Mazedar Mauka), the Dealers Conference format in the Indian hosiery industry in
1994, and the industrys first International Dealers Tour. Kishore Apparels Ltd was also the first
in the industry to introduce celebrity brand ambassadors.
Industry Powerhouse
Starting with just 1 product, Kishore Apparels Ltd has now become a manufacturing
powerhouse that produces more than 100 products at an astounding rate of 8 lakh pieces per day.
Over 3 lakh families are now associated with Kishore Apparels Ltd. The Company has established
over 5 lakh retail outlets all over India, and has offices across the nation in Kolkata, Delhi, Agra,
Indore, Mumbai, Ludhiana, Jaipur and Roorkee.
Global Presence
During the early 90s, Kishore Apparels Ltd started exploring international markets and
quickly established a strong presence overseas, with offices in the Middle East, Europe and Africa.
Within these few years, Kishore Apparels Ltd has grown its exports business by 60 times, and has
now become a major player in the global hosiery arena. We are now the largest Indian exporters,
under our own brand name of Kishore Apparels Ltd

MAIN OBJECTIVES OF THE COMPANY:

The main objectives of the company on its incorporation are:
1.

To carry on the business of ginning of kapas, spinning, doubling, twisting, combing,

warping, sizing, weaving, knitting, finishing, bleaching, dyeing, printing, mercerizing,
processing, manufacturing, trading, dealing, importing and exporting of cotton, yarn, cloth
waste cotton, staple fiber, silk, artificial silk, rayon, nylon, polyester, linen, flax, hemp, jute,
worsted wool and other natural and/or synthetic fibrous substances.

2.

To buy, sell and deal in raw and finished cotton, wool, silk, artificial silk, mercerized yarn
and other fibrous substances and to prepare, spin, clean, press and pack the same and sell the
materials so manufactured.

3. To buy contract for sell or send for sale raw cotton and their by products, waste, droppings,
fly, silk wool, jute, hemp and other fibrous articles.
4.

To purchase, take on lease or otherwise acquire lands, buildings,plants, machinery, tools for
purpose aforesaid and to construct, erect and equip mills, factories, dwellings and to work
the same.

5. To lend and advance more money or give credit to such persons, firms of companies and
such terms as may seem expedient, and in particular to customers and others having dealing
with the company and to give guarantees or become security for any such persons, firms or
companies.
6. To borrow or raise money and deposit, for the purpose of financing the business of the
company at interest or otherwise, in such manner as the company shall think fit and in
particular by creation or issue of bonds, mortgages, debentures and to secure repayment of
money borrowed raised.
7.

To guarantee the payment of the money and the performance of means.

8.

To draw, make, accept, endorse, discount, execute and issue cheques. Promissory notes,
bills of exchange, bill of landing warrants, debentures, and other transferable instruments.
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PLANT AND MACHINERY:

To meet the stiff quality requirements of the export market, the company proposes to enjoy the
sophisticated micro processor con-trolled shutteless weaving machines (Air jet looms) from the
worlds leading manufacturer m/s. PICANOL, Belgium. As per the information provided by
Engineering agencies pvt. Limited, agents from PICANOL has supplied over 20,000 Air jet looms
in world-wide accounting for 20% of the installed capacity.
FTL proposes to import well known make of Open End spinning (Rotar spinning) machines
from Czechoslovakia to produce in house its requirements of coarse count yarns for weaving.

THE MANAGEMENT:
This composite unit is managed by a team of professionals. This team is led by industrialist
Mr. V.R.Gupta, Chairman of the company. Mr. A.K. Gupta, Vice Chairman and the Managing
Director of Kishore Apparels Limited is based in Coimbatore, and is responsible for the day to day
functioning of the enterprise. Having been in the business field for more than 30 years, Mr. V.R.
Gupta along with Mr. A.K. Gupta ventured into the textiles industry in
1994.
A current addition to the Management Team is Mr. Aditya Gupta, who is graduated from the
Michigan Business School in 2001, thus giving Flora a combination of youth & experience.

LOCATION OF COMPANY:
The land is situated at Noida about 25 kms from New Delhi. Due number of mills in the
region, the site would especially be ideal from the point of view of availability of raw materials and
skilled labour from New Delhi and unskilled labour from nearby village.

INFRASTRUCTURE:
We are having 20 latest generations, high speed PICANOL DELTA Air jet weaving
machines with pick insertion rate of 720 per minute for grey fabrics weaving. These are capable of
producing wide variety of grey fabrics; we can produce grey width from 52 inches up to grey width
of 72 inches the typical GSM (weight in gms/sq mtr) varies from 190 to 450 grams/sq.mtr for grey
fabrics. The counts used, ranges from Ne10 O.E. to Ne 60/1 and 120/2 (R.S.). The typical qualities
that we manufacture the grey fabrics are Duck, Drill, Oxford, Plain Gabardine, Twill, Check and
Satin. Other than 100% Cotton grey fabrics, we work with Polycotton, Poly Viscose, Denier weft,
thus increasing our product mix. In addition, we run on job order conversion as well. In job order,
we have run Chambray with double colour two colour checks (Gigaum check) other than grey
fabrics.

CONTACTS:
Mr. Sanjay Kumar Gupta / Mr. Aditya Gupta
UG 32-33 Somdutt Chambers 1,5 Bhikaji Cama Place ,
Africa Avenue , New Delhi-110066.

Factory Address:
498-A/C, MoppariplayamVillage,
Sector 5,
Shanti Niketan,
Karumathampatti,
Noida - 110011, India.
Tel + (91)-(112)-2221447/3043335
Mobile+ (91)-9843135522
+ (91)-9344835885
Fax + (91)-(112)-6100692
E-Mail sanjay@kishore.com

OBJECTIVES OF STUDY:
The objective for which the study taken as follows
To study the credit management of KISHORE APPARELS LTD.
To understand the credit granting policy of KISHORE APPARELS LTD.
To know the credit recovery policy of KISHORE APPARELS LTD.
To know the strengths and weakness of the business.
To offer conclusions and suitable suggestions.

Fabrics construction
Mentioned below are few fabrics construction along with the weight in Gram Square
Meter (GSM). The GSM is calculated on 63" cloth width. At Kishore Apparels
Limited ,India, we offer an impressive variety of finely blended textiles that are used
widely by various garment-manufacturers across the world.

Cotton Voile

(A) 50 x 50 x 92 x 88 / 63''

92 GSM

(B) 16 x 8 x 84 x 28

77 GSM

Cotton Twill

(A) 30 x 30 x 124 x 64 / 63''

157 GSM

(B) 2/60 x 2/60 x 84 x 68/63''

126 GSM

(C) 40 x 40 x 124 x 100/63''

142 GSM

Cotton Drill

(A) 7 x 7 x 68 x 38 / 63''

380 GSM

(B) 16 x 12 x 108 x 56 / 63''

293 GSM

(C) 60 x 12 x 96 x 48 / 63''

259 GSM

(D) 2/60 x 2/60 x 108 x 58/63''

138 GSM

(E) 40 x 40 x 132 x 72 / 63''

132 GSM

Polyester Blend Fabric

(A) 30 PC x 20 PC x 96 x 50/63''

146 GSM

(B) 45 PC x 45 PC x 112 x 76/63''

107 GSM

(C) 45PC x 45PC x 124 x 72 / 63''

112 GSM

(D) 30 x 155D(Polyster) x 124 x 72/63''

161 GSM

(E) 240 x 155D(Polyster) x 100 x 68/63''

177 GSM

(F) 30 x 100D(Nylon) x 124 x 64/63''

139 GSM

(G) 20 x 330D(Polyster) x 98 x 52/63''

203 GSM

Cotton Sateen

(A) 40 x 40 x 132 x 72 / 58''

132 GSM

(B) 20 x 20 x 120 x 60 / 58''

212 GSM

(C) 40 x 40 x 124 x 79 / 58''

130 GSM

Cotton Plain Poplin

(A) 40 x 40 x 92 x 80 / 63''

111 GSM

(B) 40 x 40 x 124 x 100 / 63''

139 GSM

(C) 40 x 40 x 132 x 72 / 63''

130 GSM

(D) 40 x 40 x 124 x 64 / 63''

119 GSM

(E) 30 x 30 x 124 x 64 / 63''

162 GSM

(F) 2/40 x 2/40 x 96 x 76 / 63''

313 GSM

(G) 50 x 50 124 x 64 / 63''

97 GSM

(H) 50 x 50 x 132 x 72 / 63''

105 GSM

(I) 50 x 50 x 144 x 80 / 63''

115 GSM

Other Variety

(A) 40 x 40 x 124 x 56(Lycra) / 63''

116 GSM

(B) 2/30 x 2/30 x 58 x 60(Garberdine) /63''

201 GSM

(C) 30 X 30 x 68 x 64(Cotton + 4

109 GSM

Lycra(Bucker Lycra)) / 63''

Variety of fabrics
Weave :
Duck, Drill, Oxford, Plain, Gaberdine, Twill, Check, Satin and Chambrey with double
yarn dyed.
Product mix(fabrics) :
Cotton, Polyester Viscose (PV), Polyester Cotton (PC), Cotton Lycra (ly), Cotton Filament
(D), Flex, Rayon, Grieg Fabric & Shuttleless Fabric

HIERARECY OF THE COMPANY:

FIGURE 1.1

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METHODOLOGY OF THE STUDY:

In order to achieve the objective of my project i.e. credit management of KISHORE
APPARELS LTD and most importantly to analyze its creditors, the necessary data and information
required for study were collected from the following sources.

PRIMARY DATA:
The primary data was collected through the formal and informal discussions with the
managerial staff of the KISHORE APPARELS LTD.

SECONDARY DATA:
The secondary data was collected mainly from the following sources.
Annual reports such as balance sheet and profit and loss account of KISHORE APPARELS
LTD.
Key books of the concerned titles.
Surfing through net.
The books of KISHORE APPARELS LTD for company profile.

RESEARCH INSTRUMENT USED:

To analyze the credit management of the companies balance sheet, profit and loss account
for the last 5 years. In detail depth information about credit sales and debtors information. To collect
more information regarding the management informal gatherings with managers were resorted by
me which later proved to be very helpful pertaining to study.

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INDUSTRY PROFILE:
Indian Textile Industry occupies a very important place in the economic life of India. It
contributes to the Indian Economy through generation of employment, output and export earnings.
In the financial year 2006, it has been found out that the contribution of this industry amounts to
14% of the total output generation by the industrial sector. Indian Textile industry's contribution
towards GDP has been estimated to be hovering around 4% which itself is a commendable one.
Textile has been one of the main sources of income for the Indian economy through export. The
total share of the Indian Textile Industry in the total earnings from export has been calculated to be
16.63%, as estimated by Ministry Of Textiles, India. This industry has shown the potential of being
one of the largest employment generating industries of the Indian economy. On a direct basis,
Indian Textile
Industry employs a whooping thirty five million people and more. In terms of
employment generation, textile industry has come up to the second position, just after agriculture.

OVERVIEW OF INDIAN TEXTILE INDUSTRY:

Indian Textile Industry can essentially be categorized into two segments: Organized Textile Industry
Unorganized Textile Industry
Unorganized sector is the dominant part in this industry which mainly utilizes the
traditional practices (woven or spun ) in cloth production and hence is labor intensive in nature.
This industry is characterized by the production of clothes either through weaving or spinning with
the help of hands. The decentralized nature is considered as another important feature of the
unorganized textile industry in India.

The other half of the Indian Textile industry is a highly organized one with immense
importance on capital intensive production process. This sector is characterized by sophisticated
mills where technologically advanced machineries are utilized for mass production of textile
products.

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TEXTILE MILLS IN INDIA:

In 1999, the total number of cotton or man-made fiber textile mills were 1788. out of that,
92 mills were in the public sector, 152 in the co-operative sector and the rest 1444 were in the
private sector. India has about 34 million cotton textile spindles for manufacturing cotton yarn.

Leading Textile mills in India:

Some of the major textile mills in India are:
Raymond Ltd., Mumbai
Grasim Industries Ltd., Nagda
DCM Textiles, New Delhi
S. Kumars, Kolkata
Reliance Industries, Ahmedabad
Mafatlal Industries, Mumbai
Arvind Mills Ltd., Ahmedabad
Ashima Syntex, Ahmedabad
Nahar Spining, Ludhiana
Hisar Spinning Mills Ltd.
Anand Silk Mills, Valsad
Titex Silk Mills, Valsad
Shree sainath Silk Mills, Valsad
Shreeji Trading Company, Surat
Garden Silk Mills Ltd., Surat
Raj Rayon Ltd., Mumbai
The Bombay Dyeing & mfg. Pvt Ltd., Mumbai
Shiyaji Silk Mills Ltd, Thane
Nirmala Fabrics, Thane

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CREDIT ANALYSIS
There are two approaches by which we can asses the customer and grant
them credit they are as follows
1. TRADITIONAL CREDIT ANALYSIS
2. SEQUENTIAL CREDIT ANALYSIS
TRADITIONAL CREDIT ANALYSIS:
The traditional approach to credit analysis calls for assessing a prospective
customer in terms of the five Cs of credit.
Character The willingness of the customer to honour his obligations. It reflects integrity, a moral
attribute that is considered very important by credit managers.
Capacity The ability of the customer to meet credit obligations from the operating cash flows.
Capital The financial reserves of the customer. If the customer has difficulty in meeting his credit
obligations from its operating cash flow, the focus shifts to its capital.
Collateral The security offered by the customer in the form of pledged assets.
Conditions the general economic conditions that affect the customer. To get information on the
five Cs, a firm may rely on the following:
Financial statements financial statements contain a wealth of information. A searching analysis
of the customers financial statements can provide useful insights into the creditworthiness of the
customer. The following ratios seen particularly helpful in context: current ratio, acid-test ratio,
debt-equity ratio, EBIT to total assets ratio.
Bank reference The banker of prospective customer may be another source of information. To
ensure a higher degree of candour, the customers bankers may be approached indirectly through
the bank of the firm granting credit.
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 Experience of the firm Consulting ones own experience is very important. If the firm had
previous dealings with the customer, then it is worth asking: How prompt has the customer been in
making payments? How well has the customer honoured his word in the past? Where the customer
has being approached for the first time, theimpression of the companys sales personnel useful.
Prices and yields on the securities For listed companies, valuable inferences can be derived
stock market data. Higher the price-earnings multiple and lower the yield on bonds, other things
being equal, lower will be the credit risk.
SEQUENTIAL CREDIT ANALYSIS:
Sequential credit analysis is efficient method. In this analysis, investigation is carried further if the
benefit of such analysis is cost. To illustrate consider three stages of credit analysis.

Review of past payment record

Detailed internal analysis
Credit investigation by external agency
The credit analyst proceeds from stage one to stage two only if there is no past payment
history and hence a detailed credit analysis is warranted. Likewise, credit analyst goes from stage
two to stage three only if internal credit analyst suggests that the customer poses a medium risk and
hence there is a need for external credit analysis.

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BUSINESS VOLUME
Textile deals with local and international Market. It contributes major share in Indian Economy
and provides its products locally on economical rates. Saraswathi Textiles business volume
consist of US$25 million annually and local business consists of 10 to 15 crore. Sitars
management is very efficient, so they are always looking for new opportunities for the
development of their business and increase the economic activities in the country.

YEAR

BUSINESS VOLUME (LOCAL +

EXPORTS) (currency in local & in 00,000)

2008

14,820

2009

14,910

2010

15,656

2011

16,126

2012

17,739

Business Volume 1

MAJOR DEBTORS OF KISHORE APPARELS LTD

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DURING FINANCIAL YEAR 2012-2013

ANAMIKA ENTERPRISES Pvt LTD,COIMBATORE Rs.41,10,280
RMP CLOTHING, ERODE Rs.38,15,680
AHMEDIA AGENCIES, BANGLORE Rs.34,55,880
BALAJI IMPEX, ERODE Rs.32,87,560
GEMINI PRINTING&DYING MILLS, BANGLORE Rs.31,93,640
DURING FINANCIAL YEAR 2011-2012
ANAMIKA ENTERPRISES Pvt LTD, COIMBATORE Rs. 45,15,340
SRIRAM ENTERPRISES, DELHI Rs. 40,10,220
GOLDEN FASHIONS ERODE Rs. 37,38,880
NATRENDZ FABRICS Pvt LTD, MUMBAI Rs. 35,44,680
BALAJI TRADING COMPANY, KOLKATA Rs. 32,56,760
DURING FINANCIAL YEAR 2010-2011
ANAMIKA ENTERPRISES Pvt LTD, COIMBATORE Rs. 42,13,480
NATRENDZ FABRICS Pvt LTD, MUMBAI Rs. 40,45,550
BALAVIGNA WEVING MILLS, BANGLORE Rs. 37,35,440
MAYANK FABRICS, AHEMADABAD Rs. 35,39,890
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 ALOK LTD INDUSTRIES, MUMBAI Rs. 34,15,950

DURING FINANCIAL YEAR 2009-2010

ALOK LTD INDUSTRIES, MUMBAI Rs. 50,55,580
MAYANK FABRICS, AHEMADABAD Rs. 39,56,280
DC TEXTILES ERODE Rs. 37,13,730
BALAVIGNA WEVING MILLS, BANGLORE Rs. 35,43,870
SRI RAGAVENDARA MILLS, ERODE Rs. 33,75,870
DURING FINANCIAL YEAR 2008-2009
MAYANK FABRICS, AHEMADABAD Rs. 40,85,960
SRI RAGAVENDARA MILLS, ERODE Rs. 35,18,460
ALOK LTD INDUSTRIES, MUMBAI Rs. 39,87,870
BANDURI COTTON Pvt LTD, MUMBAI Rs. 31, 15,580
STYLE MEN TEXTILES Pvt LTD, MUMBAI Rs. 27,25,460

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FINDINGS
INTERPRETATION:
The traditional approach to credit analysis calls for assessing a prospective customer in terms
of the three Cs of credit.
CHARACETER:
The character describes the willingness of the customer to honour his credit obligations which is
excellent that we can know because of his long relationship with the organization and it reflects the
integrity, a moral attribute which is there in this customer and very important for credit evaluation.
CAPACITY:
The ability of the customer to meet his credit obligations from the operating cash flow
which is considered as excellent by evaluating the cash flow statement of the customer or by the
bank statement of the customer.
CAPITAL:
The capital represents the financial reserves of the customer. By analyzing the capital
of ANAMIKA ENTERPRISES pvt ltd . The financial reserves are plenty in future though the
customer has problems to meet credit obligations from operating cash flow the customer have
plenty of financial reserves. Hence there is no risk for credit granting.
INFERENCE:
By the analysis of identifying factors relevant for credit evaluation i.e., character, capacity,
capital shows that the above customer with no risk of default with overall excellent performance.
Hence a company can grant credit to the MAXIMUM extent.

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CONCLUSIONS

For assessing a prospective customer we have taken into consideration the Character,
Capacity and Capital of an individual customer of Kishore Apparels Ltd.
By the credit analysis of individual customers of Kishore Apparels Ltd. We can come to a
conclusion that the organization has given mor importance to the Character of an individual at the
time of taking credit granting decisions.
For judging the capacity of an individual customer the organization has taken into
consideration the operating cash flow statement and also bank statement of an individual customer
before granting credit.
The financial reserves of the customer are evaluated by the Kishore Apparels Ltd. By taking
in to considerations the capital structure and also the income statement of an individual customer.
Apart of the above three tools of credit analysis like Character, Capacity and Capital of the
organization i.e., Kishore Apparels Ltd. Has taken into considerations the responses of the
customers who will serve as a surety if the customer defaults.
We have taken into consideration a sample of 25 customers among which we have identified
4 customers i.e., (Anamika Enterprise Pvt Ltd., Coimbatore, Mayank Fabrics, Ahmadabad,
Natrendz fabrics Pvt. Ltd., Mumbai, Alok Ltd., Industries, Mumbai) who have Strong Character,
Strong Capacity, and Strong Capital.
The organization have granted the credit to the above 4 customers i.e., (Anamika
Enterprise Pvt Ltd., Coimbatore, Mayank Fabrics, Ahmadabad, Natrendz fabrics Pvt. Ltd., Mumbai,
Alok Ltd., Industries, Mumbai) to the maximum extent because they have Excellent Risk or No
Risk of Default.
Apart from the customers who are Strong in all the 3 Criterias like Character, Capacity and
Capital the organization have take a Fair Risk for granting credit to the customers i.e.,(Sri
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Ragavendra Mills, Erode, Golden Fashions, Erode, Sri Ram Enterprises, Delhi, Ahmedia Agencies,
Bangalore, Rmp Clothing, Erode, Balaji Impex, Erode though they are weak in one Criteria of
Credit Analysis.
The organization has taken liberal decisions in granting credit i.e., by taking Risk on personal
behalf by granting the credit only on the basis of Character.
The organization wantedly has taken the risk of granting the credit to the customers who
have Dangerous Risk or Risk of Default might be on the basis of Maximum Risk, Maximum
Return. To the customers who have Dangerous Risk i.e.,(Style Men Textiles Pvt Ltd., Mumbai &
Balavigna Weving Mills, Bangalore)

21