MIRA INFORM REPORT

Report Date :

03.11.2007

IDENTIFICATION DETAILS

Name :	SHRENUJ AND COMPANY LIMITED
Registered Office :	405, Dharam Palace 10-103, M S Patkar Marg, Mumbai – 400 007, Maharashtra
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	13.04.1982
Com. Reg. No.:	026903
CIN No.: [Company Identification No.]	L99999MH1982PLC026903
TAN No.: [Tax Deduction & Collection Account No.]	MUMS38907B
PAN No.: [Permanent Account No.]	AAACS0690P
Legal Form :	Public Limited Liability Company. Company’s shares are listed on the stock Exchanges.
Line of Business :	Manufacturer of consistent quality jewellery from its facilities in Mumbai and in India, they are the authorized manufacturers for Platinum Guild International (PGI)

RATING & COMMENTS

MIRA’s Rating :

Aa

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 6600000
Status :	Excellent
Payment Behaviour :	Regular
Litigation :	Clear
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 usually correct and as per commitments. The company can be considered good for normal business dealings.

LOCATIONS

Registered Office / Corporate Office :	405, Dharam Palace 10-103, M S Patkar Marg, Mumbai – 400 007, Maharashtra, India
Tel. No.:	91-22-56373500
Fax :	91-22-23632982
Email:	diamonds@shrenuj.com
Jewellery Division	G-21, Gem and Jewellery Complex – II, Seepz Andheri ( East ), Mumbai – 400 096, India
Tel. No.:	91-22-56946210
Fax:	91-22-56946161
Email:	jewellery@shrenuj.com

DIRECTORS

Name :	Mr. Kirtilal K Doshi
Designation :	Chairman
Date of Birth/Age :	84 years
Qualification :	B.A. ( Hons.)
Experience :	62 years
Date of Appointment :	13.04.1982
Name :	Mr. Shreyas K Doshi
Designation :	Managing Director
Date of Birth/Age :	56 years
Qualification :	F.Y. Science
Experience :	37 years
Date of Appointment :	28.12.1985
Name :	Mr. Nihar N Parikh
Designation :	Executive Director
Date of Birth/Age :	40 years
Qualification :	B. Com
Experience :	15 years
Date of Appointment :	27.04.1999
Name :	Vishal S Doshi
Designation :	Group Executive President
Date of Birth/Age :	28 years
Qualification :	B. Com
Experience :	8 years
Date of Appointment :	01.09.2001

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders	No. of Shares	Percentage of Holding
Directors, Relatives, Associate Companies	42052845	67.14
Financial Institutions, Mutual Funds, Nationalised Banks, Foreign Banks	3870898	6.18
Non Resident Individuals, Foreign Financial Institutions	1614695	2.58
Overseas Corporate Bodies	4672775	7.46
Other Bodies Corporate	858683	1.37
Other Individuals	9560654	15.27
Total	62630550	100

BUSINESS DETAILS

Line of Business :	Manufacturers of Diamonds and consistent quality jewellery from its facilities in Mumbai and in India, they are the authorized manufacturers for Platinum Guild International (PGI)
Products :	v Polished Diamonds v Studded Jewellery

PRODUCTION STATUS

Particulars	Units	Actual Production
Polished Diamonds*	Carats	356089
Precious Stones	Carats	37663
Studded Jewellery	Nos.	293129

GENERAL INFORMATION

No. of Employees :	2000
Bankers :	v Bank of India v ABN Amro Bank, N.V. v Exim Bank v ICICI Bank Limited v Karnataka Bank v Punjab National Bank v Saraswat Co Operative Bank v Standard Chartered Bank v State Bank of Hyderabad v State Bank of India v State Bank of Patiala v Union Bank of India
Facilities :	Term Loan from Banks include: (a) Rs. 180.550 Millions secured by way of first charge on Fixed Assets, both present & future, of the company's factory situated at Tardeo, Mumbai and is also guaranteed by Managing Director in his personal capacity. (b) Rs 24.371 Millions secured by charge on Plant & Machinery, both present & future, at the factory situated at Mahalaxmi, Mumbai, collaterally secured by pledge of Fixed Deposit of Rs. 2.450 Millions. (c) Deferred Credit from Banks is secured by Hypothecation of vehicles. Working Capital loans from banks are secured by Hypothecation of Stock in Trade, Book Debts, machinery present and future, and Equitable mortgage of premises situated at Mumbai; and also by Second charge on Fixed Assets, both present and future, of the Company's factory situated at Tardeo, Mumbai. Further collaterally secured by pledge of Fixed Deposits and Guaranteed by some of the Directors in their Personal capacity. (d) Short term loan from bank is secured against Fixed Deposits. (e) Repayable within one year Rs. 65.434 Millions (Previous year Rs. 66.507 Millions )

Banking Relations :	Good
Auditors :
Name :	Rajendra and Company Chartered Accountants
Associates/Subsidiaries :	Associates v Lavanya Jewels Limited v Shrenuj Investment and Finance Private Limited v Jomard SAS v SWA Trading Limited v Kiara Jewellery Private Limited v SHL Gems and Jewellery Limited v Trapz, LLC v K K Doshi and Company v Shrenuj and Company, converted to Shrenuj Diamonds Private Limited Subsidiaries v Aditi Diamimpex Trading and Manufacturing Company Limited ( ADITI ) v Moon Diamonds Limited ( MDL) v Shrenuj Overseas Limited ( SOL ) v Shrenuj ( Mauritius ) Private Limited ( SMPL ) v Shrunuj Japan Corporation ( SJC ) v S N Jewellery Private Limited ( SNJ ) v Shrenuj DMCC ( SDMCC ) v Astral USA, INC. ( ASTRAL ) v Shrenuj U K Limited ( SUK ) v Shrenuj USA LLC ( SUSA ) v Shrenuj N V ( SNV ) v Shrenuj Jewellery Outsourcing Limited ( JOS ) v Astral Jewels LLC ( JEWELS ) v Shrenuj GmBH ( GMBH ) v Dianova GmBh ( DINOVA ) v Shrenuj Australia Private Limited ( AUS ) v Intergems H K Limited ( INTERGEMS ) v C AND a Diamonds International, LLC ( C and A ) v Bernies International, LLC ( BERNIE ) v Lume Jewellery Limited ( LUME ) v Daily Jewellery Limited Hong Kong ( DJL )

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
175000000	Equity Shares	Rs. 2/- each	Rs. 350.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
62630550	Equity Shares	Rs. 2/- each	Rs. 125.261 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		125.300	109.100	109.100
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		1532.100	1163.200	1030.600
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		1657.400	1272.300	1139.700
LOAN FUNDS
1] Secured Loans		4469.200	3404.600	2476.700
2] Unsecured Loans		1011.600	49.900	95.900
TOTAL BORROWING		5480.800	3454.500	2572.600
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		7138.200	4726.800	3712.300
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		548.000	518.800	509.600
Capital work-in-progress		74.500	32.300	34.500
INVESTMENT		831.200	151.500	28.800
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	3981.800	2671.200	2022.600
	Sundry Debtors	2656.900	2025.700	1318.400
	Cash & Bank Balances	607.300	59.900	104.300
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	616.700	478.900	276.800
Total Current Assets		7862.700	5235.700	3722.100
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	1721.300	966.200	435.900
	Provisions	456.900	245.300	146.800
Total Current Liabilities		2178.200	1211.500	582.700
Net Current Assets		5684.500	4024.200	3139.400
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		7138.200	4726.800	3712.300

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
Sales Turnover		8810.800	5565.400	4894.500
Other Income		31.000	07.800	0.000
Total Income		8841.800	5573.200	4894.500
Profit/(Loss) Before Tax		472.900	274.000	173.200
Provision for Taxation		172.500	97.900	61.500
Profit/(Loss) After Tax		300.400	176.100	111.700
Earnings in Foreign Currency :
	F.O.B. Value of Goods Exported	8147.847	5247.629	N A
Total Earnings		8147.847	13395.476	-
Imports :
	Raw Materials	5714.518	3921.146	N A
	Stores & Spares	16.916	7.444	N A
	Capital Goods	12.265	14.896	N A
Total Imports		5743.699	3943.486	-
Expenditures :
	Raw Materials	8058.400	4948.300	3988.800
	Manufacturing Expenses	258.400	204.600	261.000
	Administrative Expenses	263.400	158.900	159.000
	Increase/(Decrease) in Finished Goods	922.100	396.900	12.000
	Salaries, Wages, Bonus, etc.	181.000	83.300	66.200
	Interest	380.200	199.600	160.800
	Power & Fuel	12.500	15.900	12.200
	Depreciation & Amortization	35.200	29.500	25.900
Total Expenditure		10111.200	6037.000	4685.900

QUARTERLY / SUMMARISED RESULTS

PARTICULARS	30.06.2007 1 Quarter	30.09.2007 2 Quarter
Type
Sales Turnover	2286.600	2854.100
Other Income	00.600	00.700
Total Income	2287.200	2854.800
Total Expenditure	2070.500	2613.300
Operating Profit	216.700	241.500
Interest	101.500	113.500
Gross Profit	115.200	128.000
Depreciation	09.000	09.500
Tax	24.500	28.300
Reported PAT	81.200	88.200

KEY RATIOS

PARTICULARS	31.03.2007	31.03.2006	31.03.2005
Debt-Equity Ratio	3.05	2.50	2.20
Long Term Debt-Equity Ratio	0.41	0.18	0.12
Current Ratio	1.18	1.21	1.26
TURNOVER RATIOS
Fixed Assets	12.92	9.06	9.15
Inventory	2.65	2.37	2.70
Debtors	3.76	3.33	3.88
Interest Cover Ratio	2.24	2.37	2.08
Operating Profit Margin (%)	10.08	9.04	7.35
Profit Before Interest and Tax Margin (%)	9.68	8.51	6.82
Cash Profit Margin (%)	3.81	3.69	2.81
Adjusted Net Profit Margin (%)	3.41	3.16	2.28
Return On Capital Employed (%)	14.38	11.22	9.46
Return On Net Worth (%)	20.51	14.60	10.13

LOCAL AGENCY FURTHER INFORMATION

Director’s Report:

Operations

The Company has posted an impressive performance during the financial year ended 31st March, 2007. Turnover rose sharply by 58% to Rs.8810.800 Millions (Rs.5565.400 Millions during 2005-06) and the profit after tax surged by 71% to Rs.300.500 Millions (Rs. 176.100 Millions during 2005-06). Both the segments diamond and jewellery contributed to the growth of the Company. Figures for the financial year ended 31 st March, 2007 are strictly not comparable on standalone basis due to merger effect.

Amalgamation

Moon Diamonds Limited, a wholly owned subsidiary, Lavanya Jewels Limited and Shrenuj Diamonds Private Limited, associate companies have been merged with your Company with effect from 29th March, 2007.

Key details of the said merger are summarized as follows :

Particulars	Moon Diamonds Limited	Lavanya Jewels Limited	Shrenuj Diamonds Private Limited
Appointed Date	1st April, 2005	17^th February, 2006	17^th February, 2006
Effective date	29th March, 2007	29^th March, 2007	29^th March, 2007
Share Exchange Ratio	The entire share capital of Moon (a wholly owned subsidiary) as on the Appointed Date was held by Shrenuj, and hence stand cancelled and extinguished on the effective date.	1 Equity share of Rs.2/- each of the Company for every 1 Equity Share of Rs. 107- each fully paid up of Lavanya Jewels Limited	3 Equity shares of Rs.2/- each of the Company for every 2 Equity Shares of Rs. 107- each fully paid up of Shrenuj Diamonds Private Limited
Number of new equity shares of the Company issued to the Members of the transferor companies	NIL	5,99,800 Equity Shares of Rs. 2/- each	75,00,000 Equity Shares of Rs.2/- each
Date of Allotment	Not Applicable	29^th March, 2007	29^th march, 2007

New Initiatives

The Company has succeeded in achieving a high degree of integration in its activities and recognized the need to secure additional, consistent sources of quality polished diamond supplies and studded jewellery. It has identified Botswana as an eminently suitable location to establish diamond polishing and jewellery manufacturing factories. Shrenuj (Mauritius) Private Limited, a wholly owned subsidiary of the Company, has formed a new company called Burnet Holdings (Proprietary) Limited in Botswana to establish its position as "A Diamond Centre of Excellence".

Shrenuj has now international marketing offices in USA, UAE, Germany, Belgium, Hong Kong, Japan and Australia that stock and sell finished goods. It has acquired a jewellery wholesale store in Ohio, USA and is in the process of developing its retail operations in India and other countries. In line with its global ambitions, the Company has embarked on a major brand building initiative in order to articulate and propagate its new brand positioning. It is working with most of the important brand names in each continent like Valena, Fiana, Lurne, Arisia, Sveni, Bhavya etc. subject is also one of the select authorised manufacturers of Platinum Guild International, an international agency engaged in the promotion of platinum jewellery.

The process of expanding footprint across the key global hubs for diamonds and jewellery distribution has helped in providing better services to the customers. Over the last one year the Company has under taken a number of initiatives to keep it ahead of competitors. All these initiatives, in terms of technology, training and marketing, will have a long term impact on strengthening the goodwill of the Company.

Subsidary Companies and Consolidated Financial Statements

The Company had 8 subsidiaries at the beginning of the financial year. The following two subsidiaries were set up during the year:

v S. N. Jewellery Private Limited

v Shrenuj Japan Corporation, Japan

During the year under review Moon Diamonds Limited, a wholly owned subsidiary, was merged with the Company w.e.f. 29th March, 2007.

The Company had 9 subsidiaries as on 31st March, 2007. As required under the Listing Agreements with the Stock Exchanges a Consolidated Financial Statement of the Company and all its subsidiaries is attached. These statements have been prepared in accordance with Accounting Standards 21, 23 and 27 issued by The Institute of Chartered Accountants of India.

The Company through its subsidiary companies has formed/ invested in the following companies viz. Shrenuj Australia Private Limited, SWA Trading Company, Shrenuj N V (Antwerp), Burnet Holdings (Proprietary) Limited, Trapz LLC, Shrenuj (Shanghai) Diamonds Company Limited. Investments in the said companies will help Shrenuj to expand its product portfolio in Australia, Israel, Belgium, Africa, USA and China.

Aditi Diamimpex Trading and Manufacturing Company Limited

The Company has given an unsecured loan of Rs.66.800 Millions to Aditi Diamimpex Trading & Manufacturing Company Limited, a wholly owned subsidiary company. During the year a part of the loan amounting to Rs.39.500 Millions has been converted into equity capital of the said company.

SHRENUJ Overseas Limited

During the year, Shrenuj Overseas Limited, a 100% subsidiary of the Company started its operations.

Acquisition of equity stake in S. N. Jewellery Private Limited

The Company has acquired 100% equity stake in S. N. Jewellery Private Limited which has a leasehold plot of land of around 875 sq. mtrs. in Seepz, Mumbai.The Company proposes to construct a full-fledged jewellery manufacturing facility on this plot. Constructing a factory building as per its own specifications will enhance its image in the eyes of the prospective customers.

Astral Holdings Inc.

As a part of the investment led growth strategy and to further strengthen the Company's position in the jewellery market, it has set up a wholly owned subsidiary company in USA called Astral Holdings Inc. The said company has acquired Simon Golub & Sons Inc., a major jewellery distributor in USA.

SHRENUJ Japan Corporation

In view of the proposed expansion plan of the Company in the Japanese Market, the Company has made an investment of 10 million Yen in Shrenuj Japan Corpoation, a wholly owned subsidiary of the Company.

On applications made by the Company pursuant to the provisions of Section 212(8) of the Companies Act, 1956, the Government of India, Ministry of Corporate Affairs (MCA), New Delhi, (MCA) vide its letter No.47/45/2007-CL-III dated 21st February, 2007 and Letter No. 47/45/2007-CL-II1 dated 25th May, 2007, exempted the Company from annexing to this report, the Annual Reports of the subsidiary companies for the year ended 31st March, 2007.

Pursuant to the said letters from MCA, a gist of the 1 o financial performance of the subsidiary companies is disclosed in this Annual Report. However, if any Member of the Company so desires, the Company will make available copies of Annual Accounts of the subsidiary companies and related information. These documents will also be available for inspection during business hours at the registered office of the Company

Global Identity "SHRENUJ":

The management has decided to change the names of Indian subsidiary companies viz. Aditi Diamimpex Trading & Manufacturing Company Limited, Lume Jewellery Limited and S. N. Jewellery Private Limited. The said companies are in the same line of business as global operations. To achieve identity in the global market the word "Shrenuj" would be used as a part of their names. This will be beneficial for the subsidiaries for expanding their operations in overseas markets. As the word "Shrenuj" has been well recognised in gem & jewellery industry

all over the world, by incorporating the word "Shrenuj" in their names these subsidiaries will get the benefit of the goodwill and image established during the last three decades.

MANAGEMENT DISCUSSION AND ANALYSIS

Overview:

The financial statements have been prepared in compliance with the requirements of the Companies Act, 1956, and Generally Accepted Accounting Principles (GAAP) in India. The management accepts responsibility for the integrity and objectivity of these financial statements, as well as for various estimates and judgments used therein. The estimates and judgments relating to the financial statements have been made on a prudent and reasonable basis, in order that the financial statements reflect in a true and fair manner, the form and substance of transactions, and reasonably present the Company's state of affairs, profits and cash flows.

Diamonds: All that Glitters...

The style-life of fashion and lifestyle of products is reducing with each passing year. While there are models to link sales of these products to changes in economy or consumer confidence indices, the ability to accurately read and predict a consumer's mind has not improved significantly ever since the evolution of market intelligence. Though this is a challenge to the marketers, it also presents an opportunity in terms of unearthing latent need states and creating new products to fulfill them.

The competition to diamonds and jewellery is primarily from the other products in luxury basket. The consumer in today's market has options to select the products ranging from latest electronic gadget to an exotic vacation or buying an automobile. With the rapid increase in personal disposable income, as well as the neo-rich segments, the competition to grab a larger share of consumer's pocket is heating up. In this scenario, the focus goes back to the basics:

1. Optimise operational efficiencies

2. Innovate

3. Gain time advantage by reducing product development cycle time

4. Effective communication to consumer

5. Efficient delivery mechanism.

CEOs worldwide focus on these parameters and seek solutions to gain significant competitive advantage in each of these. In this effort, the operating business environment, availability of skilled workforce, access to technology and conditions in key markets play significant roles.

India, a traditional leader in diamond manufacturing, has enjoyed its low cost- high skill advantage over the past many years. The government has continuously provided a conducive statutory environment for the industry. Yet Indian presence in the global jewellery industry is yet to be felt. With all its marketing talent, India is yet to create a leading international luxury brand in diamonds, despite being manufacturer for many other international brands. The time for Indian diamond and jewellery industry has come to take a quantum leap in the world scenario. The opportunity is there to be grabbed with an enabling infrastructure, reduced red tapism and high levels of technological innovations, in addition to the traditional Indian advantages.

World Diamonds and Jewellery Industry: Overview 2006-07:

The year 2006-07 witnessed stable prices for rough diamonds, while at the retail end, the market continued to grow. Retail sales of diamond jewellery witnessed 4 to 5 percent growth worldwide, with two-digit growth in China, Middle East and India. This growth in diamond jewellery sales at the start of the present decade represents a trend rather than being a one-off case. In 2002, a growth of 2.6 percent was recorded; in 2003, it went up to 5.9 percent; 2004 saw a further increase to 8.7 percent, followed by a growth of 7 percent in 2005 and 5 percent in 2006. In many ways, it was difficult to replicate the robust growth of 2004-2006.

The higher gold and platinum prices had an adverse impact on demand and the retailers were generally averse to increasing the prices, The consumer was offered more diamonds for their money rather than a reduction in price. This change is a result of increased competition; greater operational efficiencies passed on to the consumer, and reduced margins on the diamond product at the retail level. The aggressive pricing posted by internet-sellers is providing ready price comparison resulting in lower margins for the retailers. Therefore, the fact that the "diamond content" as a percentage of the total retail value has increased is good news for the consumer, but hot necessarily for the industry.

Higher interest rates also put a squeeze on the industry that is facing severe liquidity problems. The credit risk perception within the industry increased due to this liquidity crunch and additional caution by manufacturers and traders led to decline in sales.

While the diamond market'is performing certainly better in the present decade as compared to the latter half of the 1990s, the diamond industry is still underperforming in comparison with other luxury products. This poses a marketing challenge to the diamond industry.

All indicators point to expected future gap between supply and demand. The growth in sales is the beginning of a trend that will continue until about 2015 - in which demand will outstrip supply. That should augur well for prices in the years to come.

Indian Diamond Industry 2006-07:

The Indian gem and jewellery industry witnessed a growth of 2.74 percent in the financial year 2006-2007 with total gem and jewellery exports reaching US$17.1 billion compared to US$16.6 billion last year. Total cut and polished diamond exports witnessed a decline of 7.83 percent in the financial year 2006-2007, while diamond merchandise exports marked a growth of 3.37 percent with exports touching US$9.77 billion as compared to US$9.45 billion last year. USA (31%), Middle East (19%) and Hong Kong (21%) continued to be the leading destinations for diamonds and jewellery.

In the Finance Bill 2007-08, the Indian government has abolished import duty on cut and polished diamonds, fulfilling a long standing demand of the industry. This step is likely to open up opportunities for India to emerge as a large trading center for diamonds as well as a leading manufacturing center for studded jewellery. This will also create more employment opportunities in India and allow India to sustain its competitive edge.

Local beneficiation acts in southern African countries are aimed at attracting large manufacturers to these countries. This step could impede India's effort to process large and high value diamonds as more and more of the larger sized rough diamonds will be processed in that part of the world. However, given the cost advantage and available skill resources, Indian diamond industry will continue to play a major role in processing of diamonds.

Despite this slowdown in the growth rate, your company recorded a growth of 59% in revenue and 71% in net profit in FY 2006-07 as compared to FY 2005-06. The sales rose despite a slowdown for the Indian industry. Figures for the financial year ended 31s1 March, 2007 are strictly not comparable on standalone basis due to merger effect. Your company focused on extending its footprints across the globe through opening new offices in global gems and jewellery hubs by forming joint ventures and acquisitions. All these efforts will help the Company in the next few years to offer superior service to the global clientele.

Financial and operating performance:

v Merger with following three group companies brought operational synergies and cost savings durjng the financial year. The merger has added Rs. 960.000 Millions to the top line.

• Shrenuj Diamonds Private Limited
• Lavanya Jewels Limited
• Moon Diamonds Limited

v The Company has raised FCCB funds of USD 15 million to strengthen the capital base of overseas ventures.

v The Company has also issued 39,44,500 optionally fully convertible share warrants of the face value of Rs. 2/- each at a premium of Rs. 49.55 to its promoters.

v Total income of the Company for the year ended March 81, 2007 was Rs. 8841.900 Millions. The Net block of assets of the company as at March 31, 2007 stood at Rs. 622.500 Millions (including capital work in progress) and the net worth of the company was Rs. 1677.800 Millions . The Company has reported a PAT of Rs. 300.500 Millions. The above data is not strictly comparable with the previous year due to merger of the abovementioned group companies with Shrenuj & Company Limited.

Outlook, opportunities and threats:

Outlook

Increase in number of brands, marketing spend and rise in personal disposable incomes in emerging markets such as China, India, Middle East and Turkey will drive the growth in the next few years. There have been no major economic events that could lead to long-term slow down. The traditional markets such as USA, Japan and Europe will continue to account for significant consumption of diamonds and jewellery.

While the new markets are growing at a rapid rate, the growth may come gradually in the sub-segments your company operates in. Penetrating such markets remains a challenge and the Company will gain through a cautious and gradual entry to prevent itself from over exposure and additional credit risk with new customers. Your company's hub-and-satellite office approach has prepared it to reach closer to the end consumers and be more flexible in presenting its offerings, based on fast changing trends.

Opportunities

In addition to focusing on emerging markets, your company is targeting a larger market share in the traditional markets. The Company now has operational offices in USA, Japan and Antwerp to provide the desired local presence in these large markets for diamonds and jewellery. These offices will be able to generate fresh demand and work towards enhancing their brand recall in the local market.

A new factory is being constructed in Seepz to increase the production capacity of jewellery operations. The work on the factory is likely to be completed in early 2008. This factory will be the largest amongst all present facilities and will provide additional manufacturing capacity that is required to support targeted growth in the next 5 years.

Website Details Attached:

Almost a century old, Shrenuj is a name to reckon with in the international diamond and jewellery trade. From it modest beginning in 1906, the company today is amongst the leading manufacturers jewellery and a reputed brand in diamond industry.Subject today represents some of the largest diamond traders in procuring and marketing their goods.

Equipped with the latest machinery and most advanced designing facilities, Subject is a reliable source to many brand owners globally. It's factory is rated among the best in India and it's systems are of international standards.

Globally, subject is also a known name as a manufacturer of consistent quality jewellery from its facilities in Mumbai. In India, they are the authorized manufacturers for Platinum Guild International (PGI) and a distinguished partner in the prestigious Solitaire Program, Arisia, of DTC.

On-time delivery, impeccable quality standards, innovative designing and fine craftsmanship distinguish subject from the ordinary. Shrenuj is a name you can put your trust on without any hesitation for sourcing your requirements.

History

1906: Mr. Kalidas Sankalchand Doshi enters into the diamond trade as a broker.

1922: is appointed sole selling agent for India, Burma and Ceylon for M/s. Walk & Co. of Antwerp.

1926: is appointed sole selling agent for India, Burma and Ceylon for M/s. Valensa & Co. of Antwerp (1929-1942)

1942: Mr. Kalidas Doshi is joined by his sons, Mr. Shantilal Doshi and Mr. Kirtilal Doshi in his business of import of polished diamonds.

1943: Mr. Kirtilal Doshi starts working independently in diamonds.

1947: Mr. Kalidas Doshi starts a new firm by the name of K.S.Doshi & Co., to deal in polished diamonds.
Mr. Kirtilal Doshi visits Antwerp to purchase polished diamonds.

1948: Imports of polished diamonds having been banned by the Government of India, the firm starts exporting precious stones.

1956: K.S.Doshi & Co. starts importing rough diamonds cutting them for exports. One of the pioneers in export of

diamonds.

1958: Mr. Kirtilal Doshi visits Europe and America and starts developing market for diamond exports and precious stones.

1969: Mr. Shreyas Doshi representing the third generation, joins the family business at the age of 19.

1970: Mr. Kalidas Doshi retires from business at the age of 87.

A new partnership firm "SHRENUJ & CO." formed, which soon developed into a major diamond and precious

stones exporting firm.

1971: Mr. Kirtilal Doshi is elected Chairman of the Gem & Jewellery Export Promotion Council. In that capacity, he makes representations to Government to introduce Jewellery Policy.

1975: Shrenuj & Co. is recognized by the Gem & Jewellery Export Promotion Council through Awards of Excellence in exports.

1979-82: is recognized by the Council every year for excellence in exports.

1982: A new private limited company is incorporated in the name of Shrenuj & Co. Private Limited

Mr. Shreyas Doshi becomes youngest Chairman of the Gem & Jewellery Export Promotion Council.

1983: Shrenuj & Co. becomes sightholder of the DTC.

1984: Sawn manufacturing starts - 2nd or 3rd in India.

1986: Shrenuj & Co. Private Limited. is converted into a public limited company under the name of Shrenuj & Co.Limited.

Shrenuj & Co. Limited, becomes sightholder of DTC.

1987: India's diamond cutting industry crosses an important landmark when Shrenuj sets up India's first sophisticated factory using laser technology in diamond processing.

1989: Shrenuj & Co.Limited, is listed on Bombay Stock Exchange with a $ 2.55 million issue of equity shares to the public. Issue is oversubscribed 31 times with 20,000 shareholders.

Second laser machine is imported and installed.

1992: Sets up modern 100% export oriented jewellery manufacturing unit in SEEPZ, Mumbai.

1996: Five jewellery designs sponsored by Shrenuj & Co. Limited, reached to the final stage out of which two were selected as overall winners in De Beers India Jewellery Design Awards Contest - 1996.

Second Jewellery unit set up in SEEPZ.

1997: Design sponsored by Shrenuj & Co. Limited Was selected in the final 20s of the India International Jewellery Design Contest 1997.

Jewellery design sponsored by Shrenuj & Co. Limited, won the 1997 Diamonds International Award organized by De Beers.

1998: Shrenuj Group got accreditation as ISO 9002 Company.

2000: Jewellery design sponsored by Shrenuj & Co. won the 2000 Diamonds International Award organized by De Beers.

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 :

Their 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.

Their 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. 39.83
UK Pound	1	Rs. 81.75
Euro	1	Rs. 57.54

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

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