MIRA
INFORM REPORT
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Report Date : |
03.11.2007 |
IDENTIFICATION
DETAILS
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Name : |
SUASHISH JEWELS DIVISION OF SUASHISH DIAMONDS LIMITED |
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Registered Office : |
Mehta Mahal, 11th
Floor, 15 Mathew Road, Opera House, Mumbai – 400 004 |
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Country : |
India |
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Financials (as on) : |
31.12.2006 |
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Date of Incorporation : |
05.10.1988 |
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Com. Reg. No.: |
49085 |
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CIN No.: [Company
Identification No.] |
U36900MH1988PLC049085 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
MUMS38153D |
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PAN No.: [Permanent
Account No.] |
AAACS8246H |
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Legal Form : |
Public Limited
Liability company. The company’s shares are listed on the Stock Exchanges. |
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Line of Business : |
Export of rough
diamond and cut diamonds studded gold jewellery. |
RATING &
COMMENTS
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MIRA’s Rating : |
Aa |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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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 |
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Maximum Credit Limit : |
USD 20000000 |
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Status : |
Excellent |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well established and reputed company having fine track.
Available information indicates high financial responsibility of the company.
Directors are reported as experienced, respectable and resourceful businessmen.
Trade relations are reported as fair. Payments are usually correct and as per
commitments. The Company can be considered good for normal business dealings. |
LOCATIONS
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Registered Office : |
Mehta Mahal, 11th
Floor, 15 Mathew Road, Opera House, Mumbai – 400 004, INDIA |
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Tel. No.: |
91-22-3633237/3637151 |
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Fax No.: |
91-22-3685231/3630683 |
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E-Mail : |
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Website : |
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Factory : |
301, Panchratna,
M. P. Marg, Opera House, Mumbai – 400 004, INDIA Also at Ahmedabad |
DIRECTORS
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Name : |
Mr. Rameshkumar S. Goenka |
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Designation : |
Chairman |
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Name : |
Mr. Ashish R. Coenka |
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Designation : |
Managing Director |
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Name : |
Mr. Pawankumar Bagla |
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Designation : |
Executive Director |
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Name : |
Mr. Rajeshkumar R. Kedia |
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Designation : |
Wholetime Director |
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Name : |
Mr. Kamal R. Gupta |
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Designation : |
Independent Director |
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Name : |
Mr. Shailesh S. Vaidya |
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Designation : |
Independent Director |
KEY EXECUTIVES
|
Name : |
Mr. Chandrachud D. Paliwal |
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Designation : |
Company Secretary & Legal Incharge |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
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Names of
Shareholders |
No. of Shares |
Percentage of
Holding |
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Category
of Shareholder |
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Shareholding
of Promoter and Promoter Group2 |
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Indian |
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Individuals/ Hindu Undivided
Family |
5084788 |
24.49 |
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Bodies Corporate |
13484012 |
64.94 |
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Public
shareholding |
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Institutions |
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Financial Institutions / Banks |
67621 |
0.33 |
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Foreign Institutional
Investors |
20511 |
0.10 |
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Non-institutions |
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Bodies Corporate |
828792 |
3.99 |
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Individuals |
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Individuals -i. Individual
shareholders holding nominal share capital up to Rs 0.100 Million |
612199 |
2.95 |
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ii. Individual shareholders holding nominal share capital in excess of Rs. 0.100
Million |
664564 |
3.20 |
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Any Other (specify) |
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NRI- Rep |
712 |
0 |
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NRI- Non - Rep |
101 |
0 |
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TOTAL
|
20763300 |
100.00 |
BUSINESS DETAILS
|
Line of Business : |
Export of rough
diamond and cut diamonds studded gold jewellery. |
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Products : |
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GENERAL
INFORMATION
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No. of Employees : |
10,250 |
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Bankers : |
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Facilities : |
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Banking
Relations : |
Satisfactory |
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Auditors : |
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Name : |
Suresh Surana
& Associates Chartered
Accountants |
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Subsidiaries : |
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Associates : |
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CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
25,000,000 |
Equity Shares |
Rs.10/- each |
Rs.250.000 millions |
|
2,000,000 |
Redeemable Cumulative Non-Convertible Preference Shares |
Rs.100/- each |
Rs.200.000 millions |
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|
Rs.450.000
millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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20,763,200 |
Equity Shares |
Rs.10/- each |
Rs.207.633 millions |
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Add : Forfeited Shares |
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Rs.
0.488 millions |
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Rs.208.121 millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE SHEET
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SOURCES OF FUNDS |
31.12.2006 |
31.12.2005 |
31.12.2004 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
208.121 |
208.121 |
208.100 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
4856.247 |
4338.478 |
4345.800 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
5064.368 |
4546.599 |
4553.900 |
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LOAN FUNDS |
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1] Secured Loans |
5178.249 |
6106.592 |
1576.800 |
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2] Unsecured Loans |
141.527 |
62.520 |
4.500 |
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TOTAL BORROWING |
5319.776 |
6169.112 |
1581.300 |
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DEFERRED TAX LIABILITIES |
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TOTAL |
10384.144 |
10715.711 |
6135.200 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
215.564 |
231.552 |
197.700 |
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Capital work-in-progress |
75.817 |
68.832 |
107.000 |
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INVESTMENT |
592.191 |
1598.189 |
954.900 |
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DEFERREX TAX ASSETS |
37.188 |
55.826 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
1889.437
|
3276.680 |
2449.100 |
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Sundry Debtors |
3075.309
|
3028.494 |
2542.200 |
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Cash & Bank Balances |
4855.694
|
3328.960 |
152.700 |
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Other Current Assets |
93.363
|
50.417 |
0.000 |
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Loans & Advances |
523.291
|
243.700 |
391.000 |
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Total
Current Assets |
10437.094
|
9928.251 |
5535.000 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
858.967
|
919.745 |
462.400 |
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Provisions |
114.743
|
247.194 |
197.800 |
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Total
Current Liabilities |
973.710
|
1166.939 |
660.200 |
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Net Current Assets |
9463.384
|
8761.312 |
4874.800 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.800 |
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TOTAL |
10384.144 |
10715.711 |
6135.200 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.12.2006 |
31.12.2005 |
31.12.2004 |
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Sales Turnover |
9568.343 |
8647.875 |
6785.100 |
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Other Income |
95.948 |
29.827 |
487.900 |
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Total Income |
9664.291 |
8677.702 |
7273.000 |
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Profit/(Loss) Before Tax |
508.822 |
387.680 |
208.000 |
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Provision for Taxation |
75.613 |
105.376 |
63.900 |
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Profit/(Loss) After Tax |
433.209 |
282.304 |
144.100 |
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Earnings in Foreign Currency : |
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Export Earnings |
6822.196 |
7476.783 |
NA |
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Other Earnings |
15.346 |
0.842 |
NA |
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Total Earnings |
6837.542 |
7477.625 |
NA |
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Imports : |
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Stores & Spares |
16.436 |
1.028 |
NA |
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Capital Goods |
8.351 |
11.880 |
NA |
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Others |
4232.838 |
6436.341 |
NA |
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Total Imports |
4257.625 |
6449.249 |
NA |
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Expenditures : |
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Cost of Materials |
7537.714 |
7760.943 |
5023.200 |
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Manufacturing Expenses |
858.604 |
860.125 |
270.500 |
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Selling and Distribution Expenses |
112.129 |
66.443 |
71.500 |
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Increase/(Decrease) in Finished Goods |
562.835 |
[522.623] |
13.516 |
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Salaries, Wages, Bonus, etc. |
50.977 |
28.738 |
16.800 |
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Interest |
0.000 |
63.277 |
121.200 |
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Depreciation & Amortization |
33.210 |
32.299 |
29.900 |
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Other Expenditure |
0.000 |
0.820 |
180.300 |
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Total Expenditure |
9155.469 |
8290.022 |
5726.916 |
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QUARTERLY RESULTS
|
PARTICULARS |
31.03.2007 |
30.06.2007 |
30.09.2007 |
|
Type |
1st
Quarter |
2nd
Quarter |
3rd
Quarter |
|
Sales Turnover |
2303.900
|
1825.600
|
2143.000
|
|
Other Income |
41.800
|
145.000
|
138.100
|
|
Total Income |
2345.700
|
1970.600
|
2281.100
|
|
Total Expenditure |
2189.000
|
1652.800
|
2020.200
|
|
Operating Profit |
156.700
|
317.800
|
260.900
|
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Interest |
0.000
|
0.000
|
0.000
|
|
Gross Profit |
156.700
|
317.800
|
260.900
|
|
Depreciation |
7.200
|
7.800
|
7.800
|
|
Tax |
64.200
|
46.200
|
62.600
|
|
Reported PAT |
39.200
|
263.300
|
174.400
|
KEY RATIOS
|
PARTICULARS |
31.12.2006 |
31.12.2005 |
31.12.2004 |
|
Debt-Equity Ratio |
1.20 |
0.85 |
0.45 |
|
Long Term Debt-Equity Ratio |
0.00 |
0.16 |
0.43 |
|
Current Ratio |
1.50 |
1.92 |
8.39 |
|
TURNOVER RATIOS |
|
|
|
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Fixed Assets |
16.34 |
15.18 |
13.71 |
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Inventory |
3.61 |
2.82 |
2.05 |
|
Debtors |
3.06 |
2.89 |
2.93 |
|
Interest Cover Ratio |
4.38 |
2.75 |
2.72 |
|
Operating Profit Margin(%) |
7.42 |
7.95 |
5.29 |
|
Profit Before Interest And Tax Margin(%) |
7.06 |
7.55 |
4.85 |
|
Cash Profit Margin(%) |
4.99 |
3.90 |
2.56 |
|
Adjusted Net Profit Margin(%) |
4.64 |
3.50 |
2.12 |
|
Return On Capital Employed(%) |
6.25 |
7.22 |
5.06 |
|
Return On Net Worth(%) |
9.01 |
6.20 |
3.20 |
LOCAL AGENCY
FURTHER INFORMATION
HISTORY
The company was
incorporated on 5th October, 1988 at Mumbai in Maharashtra having Company
Registration Number 49085.
Subject was
promoted by Mr. Rameshkumar S. Goenka. It imports rough diamonds, cuts and
polishes them and then exports them.
In January 1996,
the company came with a public issue at a premium of Rs.185/-, aggregating Rs.1,133.7
millions to set-up three diamond cutting and manufacturing units at Ahmedabad,
set up a laser processing unit, acquire premises, invest in a subsidiary
company and to augment long-term working capital requirements. The total
project cost was estimated at Rs.1245.100 millions.
Since March 2000,
Suashish Diamdeal (India) ceased to be a subsidiary of the company due to
increase in subscribe and paid-up capital.
BUSINESS
The company imports
rough diamonds, cuts and polishes them and then exports them.
The company’s
clients are spread across USA (59%), Hong Kong (12%), Japan (7%), Europe (7%),
Israel (6%), Canada (4%), Middle East (3%) and Others (2%).
It is also a
business associate of Diamond Trading Company (DTC), London, whereby it enjoys
an uninterrupted supply of raw materials at competitive rates. It has been
granted Star Trading House status under the export-import policy of the
Government of India.
The company has
also established a 100% subsidiary – Suashish Diamonds in Hong Kong.
The company bagged
the prestigious awards by Gem & Jewellery Export Promotion Council, as the
second largest exporter o Cut & Polished Diamonds for the year 1998-99 and
certificate of merit for outstanding performance in the field of exports of cut
& polished diamonds from the Government of Maharashtra for the same year.
SUBSIDIARIES:
The following companies are subsidiaries of Suashish Diamonds Limited:
Goenka Laser House Private Limited, Suashish Diamdeal (India) Limited, Suashish
Properties Private Limited, Suashish Realtors Private Limited, Suashish Jewelry
India Limited (with effect from 8th March, 2007), Ishi's Jewellery L.L.C.,
Suashish Diamonds Suashish Diamonds Limited (Botswana) (Proprietary) Limited,
Suashish Diamonds (Hong Kong) Limited, Suashish Diamonds (Shanghai) Limited,
Suashish Jewels Inc., Dallas and Suashishstar Inc., U.S.A.
Report under Section 212(6) of the Companies Act, 1956:
The Financial Statements of one subsidiary of the Company i.e. Suashishstar
Inc., U.S.A. for the year ended 31st December, 2006 were not available to the
Company as the said Subsidiary went into dispute with the other joint venture
partner and the matter is still under litigation inspite of their efforts to
resolve the same. Due to the aforesaid reasons, the Accounts and other
Inventory details of the said subsidiary were not available/received, hence,
the Financial Statements of the said Subsidiary could not be considered in
preparation of the Consolidated Financial Statements of the Company. Further,
the information required to be given pursuant to the requirements of Section
212 of the Companies Act, 1956 could not be attached herewith on account of
above reasons.
In an earlier year, there was a robbery of 2,840.18 Carats of Diamonds
at one of the Company's sub-contractor's
premises for which the Company had lodged a claim with the Insurance
Company. Pending the settlement of the claim by the Insurance Company, the
value of aforesaid diamonds continues to be included in the stock of Rough
Diamonds and the Loss in this respect, if any, would be accounted in the Year
in which the claim is finally settled. 24.19 carats of Polished Diamonds
received through Court continue to be included in the Closing Stock of Polished
Diamonds at Nil Value.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
INDIA ECONOMIC OVERVIEW:
India is at the
center stage of the global economic activity. With a growth of 9.0% and 9.2% in
2005-06 and 2006-07, respectively. India is expected to become the third
largest economy globally next only to the USA and China by 2025. A notable
feature of the current growth phase is the sharp rise in the rate of investment
in the economy. Investment, in general being a forward-looking variable,
reflects a high degree of business optimism.
India's exports
have been growing at a high rate of more than 20%. During 2005-06, with growth
of 23.4 per cent, India's exports crossed the US$100 billion mark. During
2006-07, after a slow start, exports gained momentum to grow by an estimated
36.3% in the first nine months to reach US$89.5 billion. Buoyancy of exports
was driven by the resurgence in the manufacturing sector and sustained demand
from major trading partners. It is expected that the Special Economic Zones
will become the new growth engine for exports. The growth of services sector
such as Information Technology (IT)/IT enabled services, insurance, financial
services and retailing is creating a large consumer base with substantial
disposable income.
These macro
economic developments augur well for the future prospects of the company.
INDUSTRY STRUCTURE AND DEVELOPMENTS:
The global
market for gems and jewellery today is pegged at US$ 146 billion with key
markets having registered an average compounded annual growth rate (CAGR) of
5.2% since 2000. India has surpassed Italy and is now officially the largest
gold jewellery producer in the world.
As India makes
rapid progress in the retail arena, the jewellery market is undergoing a
gradual metamorphosis from a 'storehouse of value' to a fashion accessory
bazaar. Plain gold has now given way to diamonds, platinum and coloured
gemstones.
India is the
largest cutting and polishing centre of diamonds in the world both in terms of
quantity and value, India's gems and jewellery sector contributed to about 17%
of India's total merchandise exports during 2005-06. In terms of caratage,
India's share in this sector is about 80% of the world market.
Gold jewellery
and coloured gem segments account for about 15% and 5%, respectively of India's
gem and jewellery export in value terms.
Apart from the
growth in exports, the Indian gem and jewellery market is growing at phenomenal
rates. The diamond jewellery segment grew by over 26% in 2006. A large part of
this growth was fuelled by the branded segment. It is estimated that the
branded jewellery market in India would touch US$ 2.28 billion mark by 2010.
This trend reveals a shift in the jewellery-buying pattern in India; people are
now getting attracted towards diamond jewellery in what was basically a gold
dominated market.
The country's
exports of gems and jewellery grew to $17.1 billion in the financial year
2006-07 compared with $16.6 billion in the previous year. The growth in the
sector was driven by jewellery exports with an increase of 34.55% from $3.87
billion to $5.21 billion.
COMPANY PERFORMANCE:
Overall performance:
The company has
achieved gross sales of Rs.9334.700 Millions which is up by 8.26% as compared
to the previous year sales. The company has increased its bottom-line i.e.
Profit after Tax by 53.46% as compared to the previous year. The company's
Profit after Tax is Rs.433.200 Millions.
Jewellery Sales:
The jewellery
sales of the company have increased by 222.60% to Rs.3569.600 Millions. The
company has achieved significant heights in Jewellery manufacturing and
exports. The company plans to explore new markets and strengthen its presence
in the existing markets.
Retail:
The thrust on Retail continues and the company is currently selling its
jewellery under the brand name 'Ishi's' through over 125 outlets spread across
India and the Middle East. With the increase in organized retailing and
increase in sales of diamond studded branded jewellery, the company expects to
grow this segment by over 100%.
Consistent growth:
The 3-year
comparative figures depict consistent overall positive growth of the
company.
Opportunities:
The Government extended various benefits in the Foreign Trade Policy such as,
duty free import of commercial samples; duty free re-import entitlement for
rejected jewellery, exports of jewellery allowed on consignment basis.
These benefits
have helped in boosting the top-line in this competitive global market.
The duty on cut
and polished diamonds has been waived off from the existing 5%. This decision brings
India in line with the other diamond trading centers around the world and would
help India also establish itself, as a Global Destination for all the Diamond
and Jewellery products. With a larger variety of products freely available in
the market, more international customers will be attracted to India. The
booming Indian Consumer market will also gain, as they will get more
variety.
The company
continues to focus on emerging markets like India, China, Hong Kong, UAE, etc.
Besides this the company is also exploring the possibility of organic as well
as inorganic growth in these markets.
The company is
also striving for continual productivity improvement and exploring
manufacturing options in other countries as a part of maintaining its
competitive global position.
FIXED ASSETS
- Land
- Buildings
- Plant and
Machinery
- Furniture and
Fixture
- Vehicles
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 records 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.39.29 |
|
UK Pound |
1 |
Rs.81.91 |
|
Euro |
1 |
Rs.56.96 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
8 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
8 |
|
--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 |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
72 |
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. |
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 |
|