MIRA INFORM REPORT

Report Date :

04.12.2007

IDENTIFICATION DETAILS

Name :	RENAISSANCE JEWELLERY LIMITED
Registered Office :	Plot No. 36 A & 37, Seepz-Sez, MIDC Marol, Andheri (East), Mumbai - 400 096, Maharashtra
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	04.12.1989
Com. Reg. No.:	11-54498
CIN No.: [Company Identification No.]	U36911MH1989PLC054498
TAN No.: [Tax Deduction & Collection Account No.]	MUMR14877C
PAN No.: [Permanent Account No.]	AACCR2148B
Legal Form :	A closely held public limited liability company. The Company’s shares will be listed on the stock exchange. The Company came out with IPO of about Rs. 800 Millions, recently.
Line of Business :	Manufacturer and Exporter of Studded Gold Jewellery

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large

Maximum Credit Limit :	USD 3230000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established and reputed company. It is doing well. Payments are correct and as per commitments. Financial position is good. Nothing adverse reported. The company can be considered good for any normal business dealings at usual trade terms and conditions. It can be regarded as a promising business partner in a medium to long-run.

LOCATIONS

Registered Office / Factory :	Plot No. 36 A & 37, Seepz-Sez, MIDC Marol, Andheri (East), Mumbai - 400 096
Tel. No.:	91-22-28291019 / 28291458 / 40551200
Fax No.:	91-22-28291699 / 66938457
E-Mail :	nimish.zaveri@renjewellery.com hitesh.shah@renjewellery.com
Website :	http://www.renjewellery.com
Factory 1 :	G-42, GEM & Jewellery, Complex - III, Seepz, MIDC Marol, Andheri (East), Mumbai - 400 096, Maharashtra, India
Factory 2 :	Plot No. 2302, Hill Drive, Talaja Road, Bhavnagar, Gujarat - 364 002, India
Factory 3 :	12 Hari Niwas, K. Mathew Road, Opera House, Mumbai 400004, India

DIRECTORS

Name :	Mr. Niranjan A. Shah
Designation :	Chairman
Name :	Mr. Sumit N. Shah
Designation :	Managing Director
Name :	Mr. Hitesh M. Shah
Designation :	Executive Directors
Name :	Mr. Neville R.Tata
Designation :	Executive Directors
Name :	Mr. Amit C. Shah
Designation :	Directors
Name :	Mr. Bhupen C. Shah
Designation :	Directors
Name :	Mr. Arun S. Shah
Designation :	Independent Directors
Name :	Mr. Veerkumar C. Shah
Designation :	Non Executive and Independent Directors
Name :	Mr. Jitendra M. Shah
Designation :	Independent Directors
Name :	Mr. Vishwas V. Mehendale
Designation :	Non Executive and Independent Director
Name :	Mr. Pramod H. Lele
Designation :	Non Executive and Independent Director
Name :	Mr. Anil K. Chopra
Designation :	Non Executive and Independent Directors

KEY EXECUTIVES

Name :	Mr. S.S.Narayana
Designation :	Company Secretary
Name :	Ms. Manju Batham
Designation :	Company Secretary and Compliance Officer
Tel No. :	91-22-40551369
Fax No. :	91-22-66938457
E-mail :	ipo@renjewellery.com

BUSINESS DETAILS

Line of Business :

Manufacturer and Exporter of Studded Gold Jewellery

Products :

Product Description	Item Code No. (ITC Code)
Studded Gold Jewellery	711319-02

PRODUCTION STATUS

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Studded Gold Jewellery	(Kgs)	2775	1850	1642

GENERAL INFORMATION

No. of Employees :

About 1500

Bankers :

Ø Bank Of India

SEEPZ Branch, Behind Seepz Service Centre, Andheri ( East), Mumbai 400 096

Ø State Bank Of India

SEEPZ Branch, New Bank Building, Andheri ( East), Mumbai 400 096

Ø Punjab National Bank

SEEPZ Branch, Behind Seepz Service Centre, Andheri ( East), Mumbai 400 096

Ø ICICI Bank

Offshore Banking Branch, Plot No. 8, Block II, SEEPZ, Andheri (East), Mumbai 400 096.

Ø The Bank of Nova Scotia

11, Makers Chambers VI, 220, Nariman Point, Mumbai 400 021.

Ø Saraswat Bank Co-operative Bank Limited

1^st floor, Kimatrai Building, 77/79, Mahashi Karve Road, Marine Lines, Mumbai 400 002.

Facilities :

Secured Loan	Rs in Millions
Working capital borrowing from Banks
(Secured by first charge on pari passu basis by way of Hypothecation and / or pledge of company's current assets both Present and future and by way of joint equitable mortgage of Company’s factory premises and fixed machinery and plant, fixtures and Fittings, erected and installed therein and by personal Guarantee of some of the directors).	904.544

Banking Relations :	Satisfactory
Auditors :	J. K. Shah & Company Chartered Accountants
Tel. No.:	3^rd Floor, Flat No. 14, AL-Karim Manzil, 15, Palton Road, Mumbai - 400 001
Mobile No.:	91-22-22615581 / 22620352 / 22620183
Fax No.:	91-22- 2261 9937
Subsidiaries :	· Verigold Fine Jewellery Private Limited Renaissance Retail Venture Private Limited
Associates :	· N. Kumar Diamonds Exports Limited · Fancy Jewellery Private Limited · Renaissance Home Retail Private Limited · Anika Jewellery Private Limited Sumit Diamonds Housefull International Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
15000000	Equity Shares	Rs. 10/- each	Rs. 150.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
6517600	Equity Shares	Rs. 10/- each	Rs. 65.176 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2007	31.03.2006	31.03.2005
SHAREHOLDERS FUNDS
1] Share Capital		65.176	65.176	16.294
2] Reserves & Surplus		744.562	540.121	441.554
NETWORTH		809.738	605.297	457.848
LOAN FUNDS
1] Secured Loans		904.544	575.259	474.774
2] Unsecured Loans			3.850	2.632
TOTAL BORROWING		904.544	579.109	477.406
DEFERRED TAX LIABILITIES		0.000	0.000	2.113
TOTAL		1714.282	1184.406	937.367
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		167.526	178.712	109.996
Capital work-in-progress		0.000	0.000	28.564
INVESTMENT		12.080	2.060	4.309
DEFERREX TAX ASSETS		3.515	2.252	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	974.045	830.541	421.398
	Sundry Debtors	945.724	855.848	586.994
	Cash & Bank Balances	14.402	17.971	16.720
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	105.778	23.012	10.096
Total Current Assets		2039.949	1727.372	1035.208
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	501.754	718.482	232.929
	Provisions	15.774	10.546	7.781
Total Current Liabilities		517.528	729.028	240.710
Net Current Assets		1522.421	998.344	794.498
MISCELLANEOUS EXPENSES		8.740	3.038	0.000
TOTAL		1714.282	1184.406	937.367

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2007	31.03.2006	31.03.2005
Sales Turnover [including other income]	3883.500	3142.530	1951.854
Profit/(Loss) Before Tax	205.428	145.177	68.798
Provision for Taxation	[0.987]	[2.273]	0.609
Profit/(Loss) After Tax	204.441	147.450	68.189
Earning in Foreign Currency :	3848.444	3136.700	1960.218
Import Value	3290.984	2228.184	691.578
Expenditure :
Consumption of Materials	3199.623	2500.809
Purchase of Materials for resale	79.736	0.085
Decretion/ [Accretion] to Inventories	0.000	179.498
Personal Costs	168.367	119.296
Manufacturing and Other Expenses	161.141	124.359
Interest and Financial Charges	42.686	52.253
Depreciation	26.515	20.906
Total Expenditure	3678.068	2997.206	1883.056

KEY RATIOS

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
PAT / Total Income	(%)	5.26	4.69	3.49
Net Profit Margin (PBT/Sales)	(%)	5.28	4.62	3.52
Return on Total Assets (PBT/Total Assets}	(%)	9.30	7.62	6.01
Return on Investment (ROI) (PBT/Networth)		0.25	0.24	0.15
Debt Equity Ratio (Total Liability/Networth)		1.75	2.16	1.57
Current Ratio (Current Asset/Current Liability)		3.94	2.37	4.30

LOCAL AGENCY FURTHER INFORMATION

The company’s fixed assets of important values include Land, Building, Plant and Machinery, Furniture and Fittings, Electrical Installation, Office Equipments, Computers and Vehicles.

INDUSTRY

Overview

Global Gems and Jewellery industry

The size of the global gems and jewellery industry is estimated at 146 billion US dollars at retail prices in 2005. The industry has grown at an average CAGR rate of 5.2% since 2000 (Source: GJEPC-KPMG Report titled “The Global Gems and Jewellery Industry” (GJEPC-KPMG), 2006). Diamond studded jewellery is the largest segment of this industry (2005 sales estimated at USD 69 billion) which constitutes approx to 48% of the industry sales. The second largest segment is plain gold jewellery segment with total retail sales of USD 60.7 billion, constituting 41% of the total sales.

Global jewellery sales are expected to grow and touch USD 185 billion by 2010 and USD 230 billion by 2015 (Source: GJEPCKPMG Report titled “The Global Gems and Jewellery Industry” (GJEPC-KPMG), 2006).

Indian Gems and Jewellery industry

The Indian domestic diamond jewellery market is estimated at around Rs. 80 billion per annum in retail value (Source: ICRA “The Indian Gems & Jewellery Sector, July, 2006).

The Gems and Jewellery industry is one of the oldest and largest industries in terms of export earnings for India. India today is the one of the leader’s in processing of near gemstone quality (low caratage) stones. The Gems and Jewellery industry contributes around 15% of India’s exports. As per the table, exports of Gems and Jewellery aggregated Rs. 688.30 billion US$15.55 billion) during FY2006, accounting for 15.1% of India’s exports. As per data released by the Gems & Jewellery Export Promotion Council (GJEPC), during FY2006, gold jewellery exports account for 23.2%, rough diamonds 3.4%, and others 2.3%.

Jewellery Exports from India to USA

With various government initiatives in recent years, export of gold jewellery has increased in recent years. India’s export of gold jewellery has grown at CAGR of 25% over the last 8 years (Source: www. gjepc.org) India’s exports of gold jewellery have increased in recent years because of healthy growth in demand in key markets especially that of the US.

USA- Jewellery Market

In terms of consumption demand, USA is the world’s second largest gold jewellery market by volume (around 350 tonnes) and largest by retail value (around $16billion). In the US, Christmas, end of year festivals, Valentine’s Day, Thanksgiving Day and Mother’s Day are the important gold-buying occasions. The total US jewellery sales, including watches and fashion jewellery, are estimated by the US Department of Commerce to have been $59 billion in 2005 (2004: $57 billion). The US jewellery market has grown at a CAGR of 5.7% over the last 25 years.

The US retail jewellery industry is competitive and fragmented. The broader total US retail jewellery market includes formats such as department stores, discount outlets, television home shopping, internet retailers and general merchandise, apparel and accessory stores.

The US diamond jewellery sales are believed to account for about 50% of worldwide diamond jewellery sales. In the US market, diamond jewellery sales account for about 55% of total jewellery sales. In the last ten years the growth in diamond jewellery sales has been more than a third faster than that of the total jewellery market.

BUSINESS

Overview

They are in the business of manufacture and sale of studded gold, platinum and silver jewellery and are primarily focused on international markets including the USA besides marketing their studded jewellery products through their retail stores operated by their subsidiary, Renaissance Retail Venture Private Limited.

They have been in the studded jewellery business for over a decade and operate through three manufacturing units of which two units are located at SEEPZ-SEZ at Mumbai and one 100% EOU unit at Bhavnagar in Gujarat. Besides, their subsidiary Renaissance Retail Venture Private Limited has a manufacturing facility at MIDC, Andheri for catering to the domestic retail market. Their subsidiary, Verigold Fine Jewellery Private Limited has a manufacturing facility for studded jewellery in SEEPZSEZ at Mumbai. Both their subsidiaries are wholly-owned by their Company. In July 2007, they also commenced exports of loose diamonds from their facility situated at Opera House, Mumbai.

Their product profile includes rings, earrings, pendants, bracelets, necklaces, etc. which are manufactured using polished diamonds, precious and other semi precious stones which are set in precious metals like gold, platinum and silver. They have a talent base of about 40 designers, who on an average develop about 500 new designs every month.

They have been awarded a Certificate of Merit by GJEPC for being the second largest exporter of studded precious metal jewellery from SEEPZ-SEZ for the year 2005-06. In the year 2004, they were awarded ‘International Supplier of the Year’ by Wal-Mart and Rio Tinto Diamonds has conferred us with Business Excellence Model (BEM) in the year 2005 certification.

On a consolidated basis, their sales for Fiscal 2003 was Rs. 1223.24 million which has increased to Rs. 4384.49 million for Fiscal 2007 at a CAGR of 37.59%. Their sales for the three months period ended June 30, 2007 was Rs. 1176.52 million. Their Net profit after taxes for Fiscal 2003 was Rs. 37.21 million which has increased to Rs. 254.12 million for Fiscal 2006 at a CAGR of 61.66%. Their net profit for the three months period ended June 30, 2007 was Rs. 72.26 million.

As per website

The Innovation

Renaissance takes pride in their modern design studio complete with a state-of-the-art CAD/CAM facility. Their dedicated team of 40 designers is, well versed on the latest international trends and contributes at least 400 innovative designs monthly to their ever-expanding portfolio of over 25,000 styles. The majority of their current models are produced using CAD/CAM to ensure precision.

The Creation

Their world-class production units consist of 1,400 plus highly skilled workers with access to the latest in tools and machinery including a laser-soldering machine, Nutech J10 casting machine and OTEC Stream Liner machine, just to mention a few. Production is geared for over 80,000 pieces a month. Their production unit is capable of meeting their clients’ most stringent requirements. High quality and efficient production are the bywords of the shop floor.

The Relation

Renaissance values developing a long-term partnership above marking a short-term sale. Their focus has always been on the timely delivery of quality goods. Every piece is assayed on their CMI machine for correct karatage and checked by an independent quality control team before shipping. Their customer-oriented marketing team ensures a quick turnaround of information and a consistent follow up customer requirements.

Promoters

Mr. Niranjan Shah, aged 58 years, has over 35 years experience in the gems and jewellery business. He started his career as partner of N. Kumar Diamond & Co. on July 23, 1970. He later also became the partner of Sumit Diamonds on March 22, 1978. He is a Promoter Director and the Chairman of their Company. He is the managing director of one of their group companies, N. Kumar Diamond Exports Limited, a company engaged in diamond business. As a non-executive chairman, he advises on the overall strategy of their Company. He is also the director of Fancy Jewellery Private Limited, Verigold Fine Jewellery Private Limited, Anika Jewellery Private Limited, Renaissance Home Retail Private Limited and Renaissance Retail Venture Private Limited.

Mr. Sumit Shah, aged 31 years, Son of Mr. Niranjan Shah, is a graduate from the Bentley College, Boston and has over 10 years of experience in the gems and jewellery business. He started his career with Mayur Gems and Jewellery Private Limited as a Director in the year 1995. He is the Managing Director of their Company and he is responsible for strategic planning, business promotion, monitoring long-term plans of their Company and technology transfer/up-gradation. He is also a director of N. Kumar Diamond Exports Limited, Fancy Jewellery Private Limited, Verigold Fine Jewellery Private Limited, Anika Jewellery Private Limited, Renaissance Home Retail Private Limited and Renaissance Retail Venture Private Limited. He is also a partner in Sumit Diamonds.

Mr. Hitesh Shah, aged 34, is a bachelor in commerce from the Bombay University and has over 12 years of experience in the gems and jewellery business. He was earlier working with Sudiam B.V.B.A, Japan as president and was responsible for managing the operations. He joined their Company as chief financial officer and was appointed as executive Director in January 2003. He is responsible for product development, merchandising, marketing and financial planning. He is also a director of Fancy Jewellery Private Limited, Verigold Fine Jewellery Private Limited, Anika Jewellery Private Limited, Renaissance Home Retail Private Limited and Renaissance Retail Venture Private Limited.

Mr. Bhupen Shah, aged 43 years, has experience of over 20 years in the gems and jewellery business. He started his career as partner of N. Kumar Diamond & Co. on November 5, 1983. He is a whole time director of N. Kumar Diamond Exports Limited. He is also director of Fancy Jewellery Private Limited and Verigold Fine Jewellery Private Limited. He is also a partner in Sumit Diamonds.

Mr. Amit Shah, aged 44 years, has experience of more than 20 years in the gems and jewellery business. He started his career as partner of N. Kumar Diamond & co on October 28, 1981. He is a whole time director in N. Kumar Diamond Exports Limited. He is also a director of their Company. He is also the Director of Fancy Jewellery Private Limited and Verigold Fine Jewellery Private Limited. He is also a partner in Sumit Diamonds.

CMT REPORT [Corruption, Money laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.39.56
UK Pound	1	Rs.81.39
Euro	1	Rs.58.04

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	7
--PROFITABILIRY	1~10	7
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	7
--RESERVES	1~10	7
--CREDIT LINES	1~10	7
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		63

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions