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Rei Six Ten Retail Ltd www.6ten.co.in
SECTOR: TRADING REPORTING DATE: 31ST MAY,2016
REI Six Ten Retail Ltd. 31st May, 2016 TABLE 1 - MARKET DATA (STANDALONE) (As on 27th May, 2016)
NSE Code - REISIXTEN NSE Market Price (₹) 0.30 NSE Market Cap. (₹ Cr.) 4.85
Sector - Trading Face Value (₹) 2.00 Equity (₹ Cr.) 29.42
52 week High/Low (₹) 0.50/0.25 Net worth (₹ Cr.) 53.69
Business Group - Indian Pvt. TTM P/E N.A. Traded Volume (Shares) 5,736
Year of Incorporation - 2007 TTM P/BV 0.01 Traded Volume (lacs) 0.02
Source - Capitaline
Corporate Office: COMPANY BACKGROUND
Everest House, Room No 15B, REI Six Ten Retail Limited (RSTRL) was incorporated in March 2007 as Retail chain. REI Six Ten
Retail Limited is an India-based Company engaged in retail business. REI Six Ten is engaged in
grocery, fruits and vegetables trade selling to its stores on franchise mode. 6TEN is a chain of
small convenience stores on franchisee basis and value stores.
During the fiscal year ended 31st March, 2011 (fiscal 2011), the Company had 169 franchised
outlets across Delhi and National Capital Region, Punjab, Jaipur, Kolkata, Nagpur, Ahmedabad
and Baroda. The Company is already operating 297 value stores across Delhi, National Capital
Region and Punjab. As of November 30, 2011, 6Ten was operating 344 stores in the Delhi,
Chandigarh, Mohali, Panchkula, Amritsar, Ludhiana, Baddi, Jalandhar, Ambala and Nagpur. All
the stores are on Company-owned and Company-operated basis.
15th Floor, 46C, Chowringhee
Road, Kolkata - 700 071
West Bengal
Company Website:
www.6ten.co.in
TABLE 2 - PRICE PERFORMANCE
27th May, 2016
29th May, 2015
30th May, 2014
% Change CAGR for 2 years 2016 vs 2015 2015 vs 2014
Price (₹) 0.30 0.35 0.75 -14.29% -53.33% -36.75%
Trading Volume (Shares) (yearly avg.)
34,963 2,50,857 2,15,947 -86.06% 16.17% -
NSE Market Cap. (in ₹ Cr.) 4.41 5.15 11.03 -14.37% -53.31% -36.77%
Source - Money Control
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Rei Six Ten Retail Ltd www.6ten.co.in
SECTOR: TRADING REPORTING DATE: 31ST MAY,2016
TABLE 3 - FINANCIALS
(₹ Cr.) 2015 2014 2013 % Change CAGR for 2
years 2015 vs 2014 2014 vs 2013
Turnover 43.39 97.73 409.70 -55.60% -76.15% -67.46%
Net Worth 53.69 85.69 100.66 -37.34% -14.87% -26.97%
Current Assets 135.44 128.01 135.25 5.80% -5.35% 0.07%
Non-Current Assets 0.28 1.87 14.54 -85.03% -87.14% -86.12%
Total Assets 135.72 129.88 149.79 4.50% -13.29% -4.81%
Investments 48.06 39.26 40.91 22.41% -4.03% 8.39%
Finance Cost - 0.06 0.08 -100.00% -25.00% N.A.
Long Term Liabilities - - 0.43 - - N.A.
Current Liabilities 82.03 44.18 48.70 85.67% -9.28% 29.78%
Profit After Tax (₹ Cr.) -31.66 -14.97 -48.04 N.A. N.A. N.A.
EPS (₹) -2.00 -1.00 -3.00 N.A. N.A. N.A.
Source - Money Control/Annual Report
Discussion as per Company: The Company has In its Annual Reports for last three years has mentioned:
During the year 2015, the Company has achieved a turnover of ₹ 43.39 crores against ₹ 97.73 Crores in the previous year. The
Management of the Company is trying very hard to review the Company and to get the operation back on track. Earlier the
Company was working on Company owned and Company operated (COCO) model of retail business, then it moves to franchise
model Due to less and slow recovery of old debts the bottom line of the Company faces heavy pressure and Company extended
it losses from ₹ 14.97 crores to ₹ 31.65 crores during the year under review.
The Company during the year 2014 reported total revenue of ₹ 97.73 crores in comparison to ₹ 409.70 crores during previous
year. The decline in revenue from operations is due to closure of franchisee business module. In the year under review
Company incurred a loss of ₹ 14.97 crores as against loss of ₹ 48.04 crores during the previous financial year.
The Company during the year 2013 reported total revenue of ₹ 409.70 crores in comparison to ₹ 614.05 crores during previous
year. The decline in revenue from operations recording a downfall of 33.27% is due to reduction in franchisee in spite of best
efforts made by board of directors to improve sales. Recognition of impairment loss on assets of the Company, in accordance to
accounting standard (AS) – 28 issued by the Institute of Chartered Accountants of India, in profit and loss account as expenses
resulted in a post-tax loss of ₹ 48.04 crores during the financial year 2012-13 as against profit of ₹ 0.32 crores during the
previous financial year.
Though the revenue from operations and profit after tax of the Company has sharply fallen during the year, the directors
believe that the Company will perform better in the coming years.
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Rei Six Ten Retail Ltd www.6ten.co.in
SECTOR: TRADING REPORTING DATE: 31ST MAY,2016
AUDIT QUALIFICATIONS
Auditors have made following qualification in Annual Report of FY 2014-15.
Basis of Qualified Opinion:
“Trade Receivables amounting to ₹ 87.23 Crores is outstanding for considerable period of time. No confirmations have been received
for these customers. In our opinion the debts are doubtful of recovery against which no provision has been made in the financ ial
statement.”
Management Response:
“In this regard, Board of Directors of the Company submits that the Company is pursuing with the parties for payment of dues,
however if management feels that these debts may not be recovered, they will provide necessary provisions in the upcoming financial
years.”
Response Comment
Frequency of Qualifications Only once for the financial year 2014-15
Have the Auditors made any adverse remark in last 3 years? No -
TABLE 4: BOARD PROFILE (As on 31st March, 2015)
Compliance Company
% of Independent Directors on the Board 50% 67%
% of Promoter Directors on the Board - 17%
Number of Women Directors on the Board Atleast 1 1
Classification of Chairman of the Board - Not Disclosed
Is the post of Chairman and MD/CEO held by the same person? - No
Average attendance of Directors in the Board meetings (%) - 67%
Source - Money Control/Annual Report
Composition of Board: As per Regulation 17(i)(b) of the Listing Regulations, 2015, the Company should have at least 50%
Independent Directors as the Company does not have any Chairman of the Board. The Company as on 31st March, 2015 has 60 % of
Independent Directors and hence, it meets the regulatory requirements.
Board Diversity: As on 31st March, 2015 the Company has 6 directors out of which 5 are male and 1 female. However, at present, the
Company does not have a single woman Director on the Board. Ms. Anishrava Agrawal was appointed as women director on the
Board on 31st March, 2015, however she resigned from the board on 25th April, 2015. Thus, the Company is non-compliant as per
Listing Regulations, 2015 regarding the requirement of at least one women director.
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Rei Six Ten Retail Ltd www.6ten.co.in
SECTOR: TRADING REPORTING DATE: 31ST MAY,2016
TABLE 5 - FINANCIAL RATIOS
Ratios 2015 2014 2013 % Change
2015 vs 2014 2014 vs 2013
Turn
ove
r
Rat
ios
Inventory Turnover - - 37.11 - -
Debtors Turnover 0.50 1.11 4.89 -55.00% -77.40%
Fixed asset Turnover 154.96 52.26 28.18 196.51% 85.47%
Current Asset Turnover 0.32 0.76 3.03 -58.04% -74.80%
Ret
urn
Rat
ios Operating Profit Margin -2.97% -4.60% -12.49% N.A. N.A.
Net Profit Margin -72.97% -15.32% -11.73% N.A. N.A.
Return on Assets (ROA) -23.33% -11.53% -32.07% N.A. N.A.
Return on Equity (ROE) -58.97% -17.47% -47.73% N.A. N.A.
Return on Capital Employed (ROCE) N.A. N.A. N.A. N.A. N.A.
Liq
uid
ity
Rat
ios
Current Ratio 1.65 2.90 2.78 -43.02% 4.33%
Quick Ratio 1.65 2.90 2.55 -43.02% 13.60%
Cash Ratio 0.59 0.90 0.83 -34.41% 7.91%
Working Capital Turnover ratio 0.81 1.17 4.73 -30.32% -75.37%
Solv
ency
Rat
ios Debt to equity ratio 0.71 - - - -
Interest Coverage Ratio N.A. N.A. N.A. N.A. N.A.
Trad
ing
Rat
ios
Market Cap / Sales 0.11 0.05 0.01 125.24% 319.22%
Market Cap/ Net Worth 0.09 0.05 0.05 59.60% 17.47%
Market Cap/PAT N.A. N.A. N.A. N.A. N.A.
Market Cap/EBITDA N.A. N.A. N.A. N.A. N.A.
Trading Volume (shares) (avg. of 1 year) 35,140 2,70,567 1,94,293 -87.01% 39.26%
Trading Volume (shares) (high in 1 year) 4,45,158 25,64,827 29,45,714 -82.64% -12.93%
Trading Volume (shares) (low in 1 year) 1 600 1,235 -99.83% -51.42%
Ratio - High/low trading volume 4,45,158 4,275 2,385 10,313.76% 79.22%
Ratio - High/average trading volume 12.67 9.48 15.16 33.64% -37.48%
Source - Money Control
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Rei Six Ten Retail Ltd www.6ten.co.in
SECTOR: TRADING REPORTING DATE: 31ST MAY,2016
TABLE 6(A): OWNERSHIP & MANAGEMENT RISKS
Dec' 2015 Dec' 2014 Dec' 2013 Comments
Shar
eho
ldin
g
Promoter shareholding 44.46% 44.46% 53.80% No new equity shares were issued by the
Company during the two-year period from
Dec’2013 to Dec’2015. The promoter
shareholding decreased from 53.80% to
44.46% in the year 2014 due to sale of shares
by the promoters in the secondary market.
No other major change was observed in the
shareholding pattern during the said period.
The promoters have pledged 4.59% of their
shareholding.
Public - Institutional shareholding
7.86% 7.86% 7.86%
Public - Others shareholding 47.68% 47.68% 38.34%
Non Promoter Non Public Shareholding
- - -
TABLE 6(B): OWNERSHIP & MANAGEMENT RISKS
Market Activity of Promoters
The Promoters of the Company sold their shares in the secondary market in last two
years. Total number of shares sold by promoter and promoter group during the two-year
period is 1,37,33,765 which is 9.33% of their shareholding.
Preferential issue to promoters No preferential issue of shares was made to the promoters in last three years
Preferential issue to others No preferential issue of shares was made to others shareholders in last three years
GDRs issued by the Company The Company did not issue and GDRs in last three years
Issue of ESOPs/Issue of shares other than Preferential allotment
The Company does not have any stock option scheme.
Source - Annual Report
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Rei Six Ten Retail Ltd www.6ten.co.in
SECTOR: TRADING REPORTING DATE: 31ST MAY,2016
Glossary
Equity: The equity shares capital of the Company
Net Worth: The amount by which the Assets exceeds the liabilities excluding shareholders’ funds of the Company
Turnover: The revenue earned from the operations of the Company
EPS: Earning Per Share is net profit earned by the Company per share
𝐸𝑃𝑆 =Profit After Tax
Number of outstanding shares
P/E ratio: It is the ratio of the Company’s share price to earnings per share of the Company
𝑃/𝐸 𝑟𝑎𝑡𝑖𝑜 =Price of each share
Earnings per share
Current Assets: Cash and other assets that are expected to be converted to cash in one year
Fixed Assets: assets which are purchased for long-term use and are not likely to be converted quickly into cash, such as land,
buildings, and equipment
Total Assets: Current Assets + Fixed Assets
Investments: An investment is an asset or item that is purchased with the hope that it will generate income or appreciate in the
future.
Finance Cost: The Financing Cost (FC), also known as the Cost of Finances (COF), is the cost and interest and other charges
incurred during the year in relation to borrowed money.
Long Term Liabilities: Long-term liabilities are liabilities with a maturity period of over one year.
Current Liabilities: A company's debts or obligations that are due within one year.
Inventory Turnover ratio: Inventory Turnover is a ratio showing how many times a company's inventory is sold and replaced over
a period.
𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover
Inventory
Debtors Turnover: Accounts receivable turnover is an efficiency ratio or activity ratio that measures how many times a business
can turn its accounts receivable into cash during a period
𝐷𝑒𝑏𝑡𝑜𝑟𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover
Accounts recievables
Fixed Asset Turnover: The fixed-asset turnover ratio is a financial ratio of net sales to fixed assets
𝐹𝑖𝑥𝑒𝑑 𝐴𝑠𝑠𝑒𝑡 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover
Fixed Assets
Current Asset Turnover: The current-asset turnover ratio is a financial ratio of net sales to fixed assets
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover
Current Assets
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SECTOR: TRADING REPORTING DATE: 31ST MAY,2016
Operating Profit Margin: Operating margin is a measurement of what proportion of a Company’s revenue is left over after
paying for variable costs of production such as wages, raw materials etc. It can be calculated by dividing a Company’s operating
income (also known as “operating profit”) during a given period by its sales during the same period.
𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 =Operating profit
Sales Turnover
Net Profit Margin: Net profit margin is the percentage of revenue left after all expenses have been deducted from sales
𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 =Net profit
Sales Turnover
Return on Assets: ROA tells you what earnings were generated from invested capital (assets)
𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐴𝑠𝑠𝑒𝑡𝑠 =Net profit
Total Assets
Return on equity/net worth: return on equity (ROE) is the amount of net income returned as a percentage of shareholders’
equity.
𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐸𝑞𝑢𝑖𝑡𝑦 =Net profit
Net worth
Return on Capital Employed: Return on capital employed (ROCE) is a financial ratio that measures a company's profitability
and the efficiency with which its capital is employed.
𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐸𝑚𝑝𝑙𝑜𝑦𝑒𝑑 =Net profit
Total Debt + Equity share capital
Current ratio: The current ratio is a financial ratio that measures whether or not a firm has enough resources to pay its debts
over the next 12 months. It compares a firm's current assets to its current liabilities.
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑟𝑎𝑡𝑖𝑜 =Current Assets
Current Liabilities
Quick ratio: The quick ratio is a measure of how well a Company can meet its short term financial liabilities.
𝑄𝑢𝑖𝑐𝑘 𝑟𝑎𝑡𝑖𝑜 =Current Assets − Inventories
Current Liabilities
Cash ratio: The ratio of the liquid assets of a Company to its current liabilities.
𝑄𝑢𝑖𝑐𝑘 𝑟𝑎𝑡𝑖𝑜 =Current Assets − Inventories − Account Recievables
Current Liabilities
Working Capital Turnover ratio: The working capital turnover ratio is also referred to as net sales to working capital. It indicates a
Company's effectiveness in using its working capital.
𝑊𝑜𝑟𝑘𝑖𝑛𝑔 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =𝑆𝑎𝑙𝑒𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟
Current Assets − Current Liabilities
Debt to Equity ratio: The debt-to-equity ratio (D/E) is a financial ratio indicating the relative proportion of
shareholders' equity and debt used to finance a company's assets.
𝐷𝑒𝑏𝑡 𝑡𝑜 𝐸𝑞𝑢𝑖𝑡𝑦 𝑟𝑎𝑡𝑖𝑜 =𝑆ℎ𝑜𝑟𝑡 𝑇𝑒𝑟𝑚 𝐷𝑒𝑏𝑡 + 𝐿𝑜𝑛𝑔 𝑇𝑒𝑟𝑚 𝐷𝑒𝑏𝑡
𝑁𝑒𝑡 𝑊𝑜𝑟𝑡ℎ
Interest Coverage ratio: The Interest coverage ratio is a debt ratio and profitability ratio used to determine how easily a
Company can pay interest on outstanding debt.
𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝐶𝑜𝑣𝑒𝑟𝑎𝑔𝑒 𝑅𝑎𝑡𝑖𝑜 =𝐸𝑎𝑟𝑛𝑖𝑛𝑔 𝐵𝑒𝑓𝑜𝑟𝑒 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑎𝑛𝑑 𝑇𝑎𝑥
𝐹𝑖𝑛𝑎𝑛𝑐𝑒 𝐶𝑜𝑠𝑡
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SECTOR: TRADING REPORTING DATE: 31ST MAY,2016
Market Cap/Sales ratio: Market Cap/sales ratio, Price–sales ratio, P/S ratio, or PSR, is a valuation metric for stocks. It is calculated
by dividing the company's market cap by the revenue in the most recent year; or, equivalently, divide the per-share stock price by
the per-share revenue.
𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑆𝑎𝑙𝑒𝑠 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝
𝑆𝑎𝑙𝑒𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟
Market Cap/ Net Worth ratio: It is a valuation ratio calculated by dividing Company’s market cap to net worth.
𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑁𝑒𝑡𝑤𝑜𝑟𝑡ℎ 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝
𝑁𝑒𝑡𝑤𝑜𝑟𝑡ℎ
Market Cap/ PAT ratio: It is a valuation ratio calculated by dividing Company’s market cap to net profit.
𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑃𝐴𝑇 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝
𝑛𝑒𝑡 𝑝𝑟𝑜𝑓𝑖𝑡
Market Cap/ EBITDA ratio: It is a valuation ratio calculated by dividing Company’s market cap to EBITDA.
𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝐸𝐵𝐼𝑇𝐷𝐴 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝
𝐸𝐵𝐼𝑇𝐷𝐴
Trading Volume (shares) (avg. of 1 year): Average number of shares/day traded in 1 year
Trading volume (shares) (high in 1 year): Highest number of shares/day traded in 1 year
Trading volume (shares) (minimum in 1 year): Lowest number of shares traded on any one day in 1 year
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SECTOR: TRADING REPORTING DATE: 31ST MAY,2016
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Research Analyst: Waheed Shaikh