Today the entering into force of «The Law on bankruptcy of individuals» is widely discussed. Strictly speaking, the issue is the Federal Law №476-FL with intricate name «On Amendments to the Federal Law 'On Insolvency (Bankruptcy)' and Certain Legislative Acts of the Russian Federation to Regulate Rehabilitation Procedures for Individual Debtors" of 29 December 2014.

The original Law must have come into force after July 1, 2015. However, due to unavailability of courts to trial of, as it was suggested, significant quantity of cases on bankruptcy of individuals, its commencement was postponed to October 1, 2015.

Amendments were made to some articles of the Criminal and Town Planning/Urban Planning Codes of the Russian Federation, and to the Federal Laws, concerning insolvency (bankruptcy), and mortgage.

In case of inability to fully satisfy the requirements of one or several bankruptcy creditors on statutory payment, a person is obliged to apply to the court for bankruptcy. The amount of debt must be not less than 500 th RUB. Individual’s bankruptcy cases may be initiated by subjects, bankruptcy creditors and other authorized bodies.

Unlike bankruptcy cases of legal entities and individual entrepreneurs, the individual’s bankruptcy cases will be considered by general jurisdiction courts. By initiated case the court obligatorily appoints a finance manager, who is charged with obligations similar to court-appointed manager. According to the results of case proceeding, the trial courts may take decisions on restructuring of debt or realization of property or settlement agreement. Court has right to make determination on temporary restriction of exit from the Russian Federation, ban to open bank accounts and manage commercial organizations. Real estate, jewelry and luxury items at the cost of more than 100 th RUB must be sold in a public sale. However, under the court decision the debtor cannot be deprived of a sole real estate. Moreover, the debtor can keep daily used items amounting to 30 th RUB.

After closing the bankruptcy case the debtor has no right to undertake credit or loan obligations during 5 years without the reference to a bankruptcy fact.

By amendments it was established:

• criteria of individual’s insolvency;
• peculiarities of consideration the validity for bankruptcy petition;
• project preparation and presentation on restructuring of the debt plan, its content and procedure for implementing, including cases of application for new credit or purchase of goods by instalment;
• peculiarities of determination the proceedings оn individual’s bankruptcy due to the settlement agreement or in case of the debtor`s death.

Following the experts, the provisions of the Law may apply to about half a million debtors. The mortgage credit debtors in foreign currency may be mostly interested in bankruptcy procedure when the amount of debt exceeds the market price of realty.

According to the financial analysts, the amendments will not have much impact on banking activity, and debt collection loses sense after the court receives the bankruptcy petition, when the claimant has to get into the bankruptcy proceeding.

However, the integration of the individuals bankruptcy proceeding may face difficulties on the first stage connected with restructuring of courts, lack of professionals – financial managers.

After some time, as far as all procedures get fixed, the Law let ease tension in society because of increasing volume of «lost debts» and broaden the possibilities of debt collection.

Reportedly, for the first few days of forcing the Law, first petitions on individuals’ bankruptcy are filed in courts. It should not be expected that decisions of general jurisdiction courts on individuals’ bankruptcy cases will be published by operation of the Law on personal data.

Information Agency Credinform has prepared the ranking of the largest Russian clothes manufacturers, except companies, engaged in tailoring of special clothes, which is used in industry and military service.

The largest enterprises of the industry in terms of revenue were selected according to the data from the Statistical Register for the latest available period (for the year 2014). The enterprises were ranked by decrease in annual revenue. Total net profit/loss is specified for all companies of the ranking.

Net profit (loss) is a net retained profit (uncovered loss) of the reporting period, remained after income tax and other similar mandatory payments.

In most cases, net profit is used to increase current assets of the enterprise, create funds and reserves and also for reinvesting in production.

Net profit could be considered as a result of company’s activity for a period, in which it was made. The net profit index obviously demonstrates the sum of funds, received after all tax, salary and other statutory payments.

Increase of net profit shows well done work for a certain period and conversely, decrease in indicators and its negative values show the necessity of precautions against bankruptcy.

For the most full and fair opinion about the company’s financial condition, not only the average values of the indicators should be taken into account, but also the whole set of financial indicators and ratios.

Net profit volume of the largest clothes manufacturers (top-10) varies from 2602,1 mln RUB (CJSC GLORIA JEANS CORPORATION) to -75,2 mln RUB (LLC Valentin Yudashkin). As it can be seen from the diagram, GLORIA JEANS CORPORATION is the absolute leader in clothes manufacture. The company is significantly ahead of its nearest competitors by annual revenue as well as by net profit.

Picture. Revenue and net profit/loss of the largest clothes manufacturers (top-10)

According to the latest financial statements (2014), the annual revenue of market leaders (Top-10) amounted to 34,8 bln RUB, that is 0,3% higher than total revenue of Top-10 companies in 2013. In view of inflation, the marked turnover growth cannot be considered as positive result; the enterprises face with actual market volume reduction in monetary terms.

Despite this, all Top-10 companies of the have the highest and high solvency index, that shows the ability of enterprises to meet their obligations in time and fully; the risk of nonfulfillment is low.

For the last reporting period the net profit of GLORIA JEANS CORPORATION, the leader of the domestic tailoring sphere, increased by 6,3%, from 2,4 bln RUB to 2,6 bln RUB.

GLORIA JEANS is a vertically integrated retailer, the leader of fast fashion segment in Russia and Ukraine.

GLORIA JEANS specializes on design, manufacture and sale of fashion clothes, shoes and accessories for adults and children under Gloria Jeans and Gee Jay trademarks.

The majority of companies on the Russian market purchase products from vendors, offering finished collections. As a rule, they are Hong Kong, Japanese, American and French companies. GLORIA JEANS makes design by itself and has an extensive sourcing department worldwide. Own design and merchandising centers are situated not only in Russia, but also in Sao Paulo, Shanghai, Istanbul and Hong Kong.

Shop network consists of more than 600 stores in Russia and Ukraine. Each of them strengthens the Gloria Jeans brand. According to the McKinsey consulting company, 95% of Russians know the brand.