MIRA
INFORM REPORT
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Report Date : |
03.11.2007 |
IDENTIFICATION
DETAILS
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Name : |
CLASSIC DIAMONDS INDIA LIMITED |
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Registered Office : |
1001 Prasad Chambers, Opera House, Mumbai – 400004, Maharashtra |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
10.11.1986 |
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Com. Reg. No.: |
41541 |
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CIN No.: [Company
Identification No.] |
L36900MH1986PLC041541 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
MUMC11812D |
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PAN No.: [Permanent
Account No.] |
AAACC4602M |
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Legal Form : |
A closely held public limited liability company. |
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Line of Business : |
Manufacturers of Cut and Polished Diamonds, Studded Gold Jewellery and
Tough Diamonds |
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 7100000 |
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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.
Directors are reported as experienced, respectable and resourceful
businessmen. Trade relations are reported as fair. Payments are reported as correct
and as per commitments. The company can be considered good for normal business dealings. |
LOCATIONS
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Registered Office : |
1001 Prasad Chambers, Opera House, Mumbai – 400004, Maharashtra, India
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Tel. No.: |
91-22-23632915 / 23632916 |
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E-Mail : |
DIRECTORS
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Name : |
Mr. Chandarakant M. Bhansali |
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Designation : |
Chairman |
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Name : |
Mr. Kumar C. Bhansali |
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Designation : |
Managing Director |
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Name : |
Mr. Nirav K. Bhansali |
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Designation : |
Whole- time Director |
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05.09.2006 |
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Name : |
Mr. Mayank R. Mehta |
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Designation : |
Whole- time Director |
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Name : |
Mr. Hiren H. Shah |
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Designation : |
Whole-time Director |
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Date of Appointment : |
31.10.2006 |
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Name : |
Mr. Yogesh K. Kaji |
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Designation : |
Director |
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Name : |
Mr. Sumit B. Shah |
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Designation : |
Director |
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Name : |
Mr. Zubin N. Batliwalla |
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Designation : |
Director |
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Date of Appointment : |
03.04.2006 |
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Name : |
Mr. Ashok V. Ashar |
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Designation : |
Whole -time Director |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
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Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
Promoters,
Directors, Relatives and Companies under the same Management |
44,13,874 |
63.0554 |
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Mutual Funds |
100 |
0.0014 |
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Banks |
1 ,58,776 |
2.2682 |
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Private
Corporate Bodies |
13,03,156 |
18.6165 |
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Indian Public |
11,02,197 |
15.7457 |
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NRI's |
18,228 |
0.2604 |
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Clearing Members |
3,669 |
0.0524 |
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Total: |
70,00,000 |
100.000 |
BUSINESS DETAILS
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Line of Business : |
Manufacturers of Cut and Polished Diamonds, Studded Gold Jewellery and
Tough Diamonds |
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Products : |
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PRODUCTION STATUS
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Particulars |
Unit |
Licensed
Capacity |
Installed
Capacity |
Actual
Production |
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DIAMOND DIVISION |
Cts. |
666000 |
204000 |
336282.84 |
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JEWELLERY DIVISION |
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Jewellery |
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100000 Pieces 450000 Gms |
850000 Gms |
635951.12 gms |
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Diamond |
Cts. |
112500 |
100000 |
-- |
GENERAL
INFORMATION
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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 : |
M. V. Damania & Company Chartered Accountants |
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Associates/Subsidiaries : |
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CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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15,000,000 |
Equity Shares |
Rs. 10/- each |
Rs. 150.000 Millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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7,000,000 |
Equity Shares |
Rs. 10/- each |
Rs. 70.000
Millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
70.000 |
70.000 |
70.000 |
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2] Share Application Money |
5.600 |
0.000 |
0.000 |
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3] Reserves & Surplus |
1705.004 |
1500.000 |
1358.000 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
1780.604 |
1570.000 |
1428.000 |
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LOAN FUNDS |
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1] Secured Loans |
3791.561 |
3711.042 |
3095.500 |
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2] Unsecured Loans |
0.000 |
0.000 |
0.000 |
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TOTAL BORROWING |
3791.561 |
3711.042 |
3095.500 |
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DEFERRED TAX LIABILITIES |
4.486 |
6.582 |
0.000 |
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TOTAL |
5576.651 |
5287.624 |
4523.500 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
557.950 |
650.872 |
233.800 |
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Capital work-in-progress |
0.000 |
3.050 |
156.900 |
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INVESTMENT |
27.453 |
26.351 |
3.800 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
2868.653
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3027.033 |
2009.600 |
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Sundry Debtors |
2649.745
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2153.251 |
2861.900 |
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Cash & Bank Balances |
88.923
|
130.137 |
62.600 |
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Other Current Assets |
0.000
|
0.000 |
0.000 |
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Loans & Advances |
47.844
|
43.580 |
52.300 |
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Total
Current Assets |
5655.165
|
5354.001 |
4986.400 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
625.742
|
669.176 |
790.000 |
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Provisions |
38.175
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77.474 |
67.400 |
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Total
Current Liabilities |
663.917
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746.650 |
857.400 |
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Net Current Assets |
4991.248
|
4607.351 |
4129.000 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
5576.651 |
5287.624 |
4523.500 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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Sales Turnover |
6437.190 |
6210.864 |
5770.600 |
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Other Income |
46.329 |
3.596 |
23.300 |
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Total Income |
6483.519 |
6214.46 |
5793.900 |
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Profit/(Loss) Before Tax |
296.436 |
224.081 |
180.800 |
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Provision for Taxation |
70.957 |
66.074 |
60.500 |
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Profit/(Loss) After Tax |
225.479 |
158.007 |
120.300 |
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Earnings in Foreign Currency : |
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Total Earnings |
5922.395 |
6043.651 |
NA |
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Imports : |
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Raw Materials |
2983.575 |
2755.523 |
NA |
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Stores & Spares |
3.975 |
5.805 |
NA |
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Capital Goods |
4.994 |
11.172 |
NA |
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Others |
1449.681 |
2156.414 |
NA |
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Total Imports |
4442.225 |
4928.914 |
NA |
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Expenditures : |
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Materials Cost |
4021.939 |
2522.562 |
4370.500 |
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Purchase of
Traded Goods |
1524.276 |
2889.888 |
0.000 |
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Payments to and
Provision for Employees |
272.658 |
154.484 |
0.000 |
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Manufacturing
and Other Expenses |
510.393 |
640.941 |
649.900 |
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Finance Cost |
341.032 |
269.690 |
206.600 |
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Depreciation |
76.431 |
51.320 |
20.500 |
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Increase/(Decrease) in Finished Goods |
[559.645] |
[538.506] |
180.400 |
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Total Expenditure |
6187.084 |
5990.379 |
5427.900 |
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QUARTERLY RESULTS
|
PARTICULARS |
|
30.06.2007 |
30.09.2007 |
|
Type |
|
1st
Quarter |
2nd
Quarter |
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Sales Turnover |
|
1494.400
|
1752.500
|
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Other Income |
|
36.700
|
09.000
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Total Income |
|
1531.100
|
1761.500
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Total Expediture |
|
1362.600
|
1614.200
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Operating Profit |
|
168.500
|
147.300
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Interest |
|
72.400
|
65.000
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Gross Profit |
|
96.100
|
82.300
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Depreciation |
|
16.300
|
16.700
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Tax |
|
12.500
|
[11.300] |
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Reported PAT |
|
67.300
|
76.900
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KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt-Equity Ratio |
2.24 |
2.27 |
2.17 |
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Long Term Debt-Equity Ratio |
0.25 |
0.13 |
0.00 |
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Current Ratio |
1.36 |
1.29 |
1.29 |
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TURNOVER
RATIOS |
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Fixed Assets |
8.43 |
11.28 |
19.96 |
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Inventory |
2.22 |
2.49 |
2.91 |
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Debtors |
2.72 |
2.50 |
2.30 |
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Interest Cover Ratio |
1.87 |
1.83 |
1.88 |
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Operating Profit Margin(%) |
10.91 |
8.69 |
7.07 |
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Profit Before Interest And Tax
Margin(%) |
9.74 |
7.87 |
6.71 |
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Cash Profit Margin(%) |
4.61 |
3.34 |
2.44 |
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Adjusted Net Profit Margin(%) |
3.45 |
2.52 |
2.08 |
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Return On Capital Employed(%) |
11.75 |
10.07 |
8.90 |
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Return On Net Worth(%) |
13.48 |
10.54 |
8.75 |
LOCAL AGENCY
FURTHER INFORMATION
BUSINESS PROSPECTS
:
The Gems and Jewellery
sector in India is one of the largest foreign Exchange earner for the nation,
hence it has been receiving a great amount of attention from the Governmental
authorities. Currently India's magic touches almost all people wearing
jewellery in different corners of the world, for the country's mammoth industry
manufactures as many as 11 out of every 12 diamonds set in jewellery worldwide.
The company is now
gearing up for the production of the larger type of diamonds, which would yield
higher margins and a larger array of products for the customers to suit their
requirements. Classic focuses on two areas - jewellery retailing and exports.
In the jewellery - retail the company has been successful in portraying itself
as the Necklace destination through its flagship brand "Classic
Jewels". Looking at the demand of its jewellery in the northern region of
India, and as planned the company has opened retail outlets at Ludhiana &
Delhi.
The company
adheres to the Diamond Trading Company's Best Practicing Principles to ensure
professionalism in the smooth functioning of the company .
FINANCE :
The company was
able to obtain adequate working capital finance as well as Term Loans for a
period of five years to support the manufacturing facilities, from its consortium
of bankers during the year under review.
MANAGEMENT
DISCUSSION AND ANALYSIS REPORT
OVERALL
PERFORMANCE :
The Company has
registered an upward trend in its performance levels with substantial growth in
the jewellery sector which is a considerable 80 % jump over the previous year.
Unlike the diamond
industry the jewellery sectors proportion in the business mix has had an upper
hand. The new mix is in the proportion of 75:25 as against the 86:14 (P.Y.).
With the major additions of sales to the retail chain stores and wholesale
clubs in the international arena.
The set back in
the diamond segment was mainly due to the effect of floods at Surat their
manufacturing hub during the month of August '06. This hampered availability of
manpower leading to delay in the cycle of flow of goods. However, by the grace
of God the factory has not suffered any damage. Another attribute to the set
back in value terms of Diamond sales is due to the appreciating Rupee which the
country has faced which accounts for over 6 % in the value terms.
During the year
the area under the EOU was enhanced by a floor in order to make best use of
economics lying ahead of the company.
INDUSTRY OUTLOOK:
Unlike the past years
when their industry was treated more as a family run business model is now
being looked at as a promising professionally run industry world over.
Many diamond
jewellery companies are sourcing their funds requirement globally through
foreign bonds etc.. in order to acquire business units internationally to
support & achieve growth levels. Being in line with the same, the company
had raised preferential capital from investors who have shown long term
interest in the company. This would result in debt being replaced with Equity
to that extent.
BUSINESS
OPPORTUNITIES:
The government has
been lending tremendous support to the industry. Demand for Indian jewellery is
fast picking up throughout the world. Encouraged by the fast growing demand for
Indian gems and jewellery, the Gems and Jewellery Export Promotion Council
(GJEPC) has revised the export target upward to US $ 20 billion for the fiscal
year 2007 Reduction of duty on Import of Cut and Polished Diamonds to Nil from
3 % is welcomed by the industry and would enhance growth for the country.
The company takes
the pride to announce that it has bagged an exclusive contract with Saudi
Arabian customer for supply of necklace sets worth USD 5 million. The company
intends to make use of available infrastructure for moving into additional
products other than its core quality of stars and melles, this would entail
better margins.
In the retailing
of jewellery the company has soft launched two additional stand alone stores in
the north of India ie.. Ludhiana and Delhi due to the overwhelming response
seen at gurgaon. During the year the jewellery manufacturing facility of the
domestic had successfully cleared the DTC's Best Practice Principles reflecting
the Systems that we primarily function with.
The company is in
the process of amalgamation with M/s. Purvi Diamonds Private limited. The
amalgamation will be able to provide synergies in the operational and
administrative functions and would enhance the earning potential and boost the
earnings of the applicant company and will reduce the overall administrative
and operational cost of the applicant company."
EXPANSION :
The company is
mainly focusing into the jewellery sector and intends to increase exports of
its jewellery to retailers and enhance jewellery sales through its own stores.
In order to
achieve its targets the company intends to acquire retail chain stores in
Europe where the value addition is based on Quality of jewellery that we
supply. Further, for the domestic consumers the company plans to open up more
stores at certain metres and big cities such as Pune, Kolkata and the type.
FINANCIAL REVIEW :
During the year
under review, the company's profits have shown a good level of recovery mainly
due to the change in the mix, i.e. focusing more on jewellery and the company
would move in this direction in the coming years with further concentration in
cost control and cost reduction wherever possible.
OUTLOOK :
The company has a
clear objective to enhance market share in the domestic and international
market, and to reach out to the end user thereby eliminating middlemen, and at
the same time check out for opportunities for use of final product of one
sector as input to the other sector. Keeping this in view, the company has set
a reasonable level of growth for the current year.
FIXED ASSETS :
- Land
(Freehold)
- Building
- Plant &
Machinery
- Weighing
Machines
- Furniture
& Fixtures
- Electrical
Installations
- Office
Equipments
- Air -
Conditioners
- Vehicles
- Computer
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.39.27 |
|
UK Pound |
1 |
Rs.82.27 |
|
Euro |
1 |
Rs.57.48 |
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 |
|