MIRA
INFORM REPORT
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Report Date : |
22.12.2008 |
IDENTIFICATION DETAILS
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Name : |
RENAISSANCE
JEWELLERY LIMITED |
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Registered Office : |
Plot No. 36 A and 37, Seepz, Andheri (East), Mumbai - 400 096, Maharashtra |
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Country : |
India |
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Financials (as on) : |
31.03.2008 |
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Date of Incorporation : |
04.12.1989 |
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Com. Reg. No.: |
11-54498 |
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CIN No.: [Company
Identification No.] |
U36911MH1989PLC054498 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
MUMR14877C |
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PAN No.: [Permanent
Account No.] |
AACCR2148B |
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Legal Form : |
A closely held public Limited Liability Company |
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Line of Business : |
Manufacturer
and Exporter of Studded Gold Jewellery |
RATING & COMMENTS
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MIRA’s Rating
: |
Ba |
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RATING |
STATUS |
PROPOSED
CREDIT LINE |
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41-55 |
Ba |
Overall operation
is considered normal. Capable to meet normal commitments. |
Satisfactory |
Maximum Credit
Limit : |
USD 8500000 |
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Status : |
Satisfactory |
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Payment
Behaviour : |
Slow but Correct |
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Litigation : |
Clear |
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Comments : |
Subject is a well
– established company having satisfactory track. Payments are
reported as slow but correct. General Financial position is satisfactory.
Payments are reported as slow but correct. The company’s
performance would be aforesaid due to slowdown in U.S and Europe. However, the
company can be considered normal for business dealings at usual trade terms
and conditions |
LOCATIONS
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Registered Office / Factory
: |
Plot No. 36 A and
37, Seepz, Andheri (East), Mumbai - 400 096, Maharashtra |
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Tel. No.: |
91-22-28291019 / 28291458 / 40551200 / 56938444 |
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Fax No.: |
91-22-28291699 / 66938457/ 8292146 |
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E-Mail : |
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Website : |
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Factory 1 : |
G-42, GEM and
Jewellery, Complex - III, Seepz, MIDC Marol, Andheri (East), Mumbai - 400
096, Maharashtra, India |
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Tel. No.: |
91-22-56938444 |
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Fax No.: |
91-22-8292146 |
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E-Mail : |
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Factory 2 : |
Plot No. 2302,
Hill Drive, Talaja Road, Bhavnagar, Gujarat - 364 002, India |
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Factory 3 : |
12 Hari Niwas, K.
Mathew Road, Opera House, Mumbai 400004, India |
DIRECTORS
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Name : |
Mr. Niranjan A.
Shah |
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Designation : |
Chairman |
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Name : |
Mr. Sumit N. Shah |
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Designation : |
Managing Director |
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Name : |
Mr. Hitesh M.
Shah |
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Designation : |
Executive
Directors |
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Name : |
Mr. Neville
R.Tata |
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Designation : |
Executive
Directors |
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Name : |
Mr. Amit C. Shah |
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Designation : |
Directors |
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Name : |
Mr. Bhupen C.
Shah |
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Designation : |
Directors |
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Name : |
Mr. Arun S. Shah |
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Designation : |
Independent
Directors |
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Name : |
Mr. Veerkumar C.
Shah |
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Designation : |
Non Executive and
Independent Directors |
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Name : |
Mr. Jitendra M.
Shah |
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Designation : |
Independent
Directors |
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Name : |
Mr. Vishwas V.
Mehendale |
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Designation : |
Non Executive and
Independent Director |
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Name : |
Mr. Pramod H.
Lele |
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Designation : |
Non Executive and
Independent Director |
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Name : |
Mr. Anil K.
Chopra |
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Designation : |
Non Executive and
Independent Directors |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
AS ON 31.03.2008
|
Category |
No. of Shares |
Percentage of Holding |
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A. Promoters Holding |
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Promoters |
9515680 |
51.83 |
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Relative of
Directors |
3519440 |
19.17 |
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Corporate Bodies
(Promoter Co.) |
80 |
0.0004 |
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B. Non Promoters Holding Institutional
Investors |
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Mutual Fund |
587691 |
3.20 |
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Insurance
Companies |
164374 |
0.90 |
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Other Bodies
Corporate |
899260 |
4.90 |
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Cleaning Member |
138412 |
0.75 |
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Non Nationalise Banks
|
75000 |
0.41 |
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Foreign Inst.
Investors |
747975 |
4.07 |
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Others |
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Non Resident
Indians |
34935 |
0.19 |
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Non Resident (Non
Repatriable) |
2589 |
0.01 |
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Public |
2673812 |
14.56 |
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Trusts |
192 |
0.001 |
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Total |
18359440 |
100.00 |
KEY EXECUTIVES
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Name : |
Mr. S.S.Narayana |
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Designation : |
Company Secretary |
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Name : |
Ms. Manju Batham |
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Designation : |
Company Secretary
and Compliance Officer |
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Tel No. : |
91-22-40551369 |
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Fax No. : |
91-22-66938457 |
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E-mail : |
BUSINESS DETAILS
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Line of Business : |
Manufacturer
and Exporter of Studded Gold Jewellery |
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Products : |
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PRODUCTION
STATUS
Details of Installed Capacities and Actual
Production:
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Jewellery
Division |
2007- 2008 Qty. (KGS) |
2006 – 2007 Qty. (KGS) |
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Manufacturing
Goods |
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Installed
Capacity |
2150 |
1850 |
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Licensed
Capacity |
5650 |
2775 |
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Actual Production
|
1858 |
1642 |
GENERAL INFORMATION
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No. of Employees : |
About 1500 |
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Bankers : |
·
Bank Of
India SEEPZ Branch, Behind Seepz Service Centre, Andheri ( East), Mumbai 400
096 ·
State Bank
Of India SEEPZ Branch, New Bank Building, Andheri ( East), Mumbai 400 096 ·
Punjab
National Bank SEEPZ Branch, Behind Seepz Service Centre, Andheri ( East), Mumbai 400
096 ·
ICICI Bank Offshore Banking Branch, Plot No. 8, Block II, SEEPZ, Andheri (East),
Mumbai 400 096. ·
The Bank of
Nova Scotia 11, Makers Chambers VI, 220, Nariman Point, Mumbai 400 021. ·
Saraswat
Bank Co-operative Bank Limited 1st floor, Kimatrai Building, 77/79, Mahashi Karve Road,
Marine Lines, Mumbai 400 002. ·
Union Bank
of India |
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Facilities : |
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Banking Relations : |
Satisfactory |
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Auditors : |
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Name : |
J. K. Shah and
Company Chartered
Accountants |
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Tel. No.: |
3rd
Floor, Flat No. 14, AL-Karim Manzil,
15, Palton Road, Mumbai - 400 001 |
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Mobile No.: |
91-22-22615581 / 22620352 / 22620183 |
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Fax No.: |
91-22- 2261 9937 |
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Subsidiaries : |
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Associates : |
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CAPITAL STRUCTURE
AS ON 31.03.2008
Authorised
Capital :
|
No. of Shares |
Type |
Value |
Amount |
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25000000 |
Equity Shares |
Rs. 10/- each |
Rs.250.000 Millions |
(Previous Year: 15000000 Equity Share of Rs.10/- Each)
Issued,
Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
18359440 |
Equity Shares |
Rs. 10/- each |
Rs.183.594 Millions |
(Previous Year: 6517600 Equity Share of Rs.10/- Each fully paid- up)
Notes:
- Of the above,
749400 equity share of Rs.10/- each fully paid up were allotted for consideration
other than cash
- Of the above,
11405800 (Previous Year: 4888200) Equity Share of Rs.10/- each have been
allotted as fully paid up bonus share by capitalisation of profit and loss
accountant
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE SHEET
|
SOURCES OF FUNDS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
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SHAREHOLDERS
FUNDS |
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1] Share Capital |
183.594 |
65.176 |
65.176 |
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2] Share
Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves &
Surplus |
1508.976 |
744.562 |
540.121 |
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4] (Accumulated
Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
1692.570 |
809.738 |
605.297 |
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LOAN FUNDS |
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1] Secured Loans |
989.026 |
904.544 |
575.259 |
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2] Unsecured
Loans |
0.000 |
0.000 |
3.850 |
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TOTAL BORROWING |
989.026 |
904.544 |
579.109 |
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DEFERRED TAX
LIABILITIES |
0.000 |
0.000 |
0.000 |
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TOTAL |
2681.596 |
1714.282 |
1184.406 |
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APPLICATION OF
FUNDS |
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FIXED ASSETS [Net
Block] |
163.778 |
167.526 |
178.712 |
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Capital
work-in-progress |
6.762 |
0.000 |
0.000 |
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INVESTMENT |
470.877 |
12.080 |
2.060 |
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DEFERREX TAX
ASSETS |
1.638 |
3.515 |
2.252 |
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CURRENT ASSETS,
LOANS & ADVANCES |
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Inventories |
959.067
|
974.045
|
830.541
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Sundry Debtors |
1015.607
|
945.724
|
855.848
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Cash & Bank
Balances |
73.869
|
14.402
|
17.971
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Other Current
Assets |
0.000
|
0.000
|
0.000
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Loans &
Advances |
354.217
|
105.778
|
23.012
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Total Current Assets |
2402.760
|
2039.949 |
1727.372 |
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Less : CURRENT LIABILITIES & PROVISIONS |
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Current
Liabilities |
326.021
|
501.754
|
718.482
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Provisions |
38.197
|
15.774
|
10.546
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Total Current Liabilities |
364.218
|
517.528 |
729.028 |
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Net
Current Assets |
2038.541
|
1522.421
|
998.344
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MISCELLANEOUS
EXPENSES |
0.000 |
8.740 |
3.038 |
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TOTAL |
2681.596 |
1714.282 |
1184.406 |
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PROFIT & LOSS ACCOUNT
|
PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
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Sales Turnover
[including other income] |
4337.523 |
3883.500 |
3142.530 |
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Profit/(Loss) Before Tax |
183.035 |
205.428 |
145.177 |
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Provision for Taxation |
5.412 |
[0.987] |
[2.273] |
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Profit/(Loss) After Tax |
177.623 |
204.441 |
147.450 |
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Export Value |
4325.196 |
3845.591 |
3136.700 |
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Imports : |
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Raw Materials |
2773.755 |
3258.302 |
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Stores & Spares |
30.060 |
28.074 |
2228.184 |
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Capital Goods |
5.404 |
4.606 |
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Total Imports |
2809.219 |
3290.982 |
2228.184 |
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Expenditure : |
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Consumption of Materials |
2942.082 |
3199.623 |
2500.809 |
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Purchase of Materials for resale |
747.230 |
79.736 |
0.235 |
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Decretion/ [Accretion] to Inventories |
0.000 |
0.000 |
179.498 |
|
Personal Costs |
218.904 |
168.367 |
119.296 |
|
Manufacturing & Other Expenses |
139.485 |
161.141 |
124.359 |
|
Interest & Financial Charges |
81.798 |
42.686 |
52.253 |
|
Depreciation |
24.989 |
26.519 |
20.906 |
|
Total
Expenditure |
4154.488 |
3678.072 |
2997.206 |
QUARTERLY RESULTS
|
Year |
30.06.2008 |
30.09.2008 |
|
Type |
1st Quarter |
2nd Quarter |
|
Sales Turnover |
598.000 |
1149.300 |
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Other Income |
3.400 |
3.000 |
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Total Income |
601.400 |
1152.300 |
|
Total Expenditure |
576.500 |
1036.300 |
|
Operating Profit |
24.900 |
116.000 |
|
Interest |
16.400 |
22.100 |
|
Gross Profit |
8.500 |
93.900 |
|
Depreciation |
5.900 |
6.900 |
|
Tax |
-0.600 |
1.400 |
|
Reported PAT |
3.200 |
85.600 |
Key
ratios
|
PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
Debt-Equity Ratio |
0.76 |
1.05 |
0.99 |
|
Long Term Debt-Equity Ratio |
0.00 |
0.00 |
0.00 |
|
Current Ratio |
1.60 |
1.38 |
1.37 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
13.77 |
12.91 |
12.69 |
|
Inventory |
4.48 |
4.27 |
5.02 |
|
Debtors |
4.42 |
4.27 |
4.35 |
|
Interest Cover Ratio |
3.24 |
3.75 |
3.77 |
|
Operating Profit Margin(%) |
6.69 |
7.97 |
6.95 |
|
Profit Before Interest & Tax
Margin(%) |
6.12 |
7.28 |
6.28 |
|
Cash Profit Margin(%) |
4.68 |
6.00 |
5.36 |
|
Adjusted Net Profit Margin(%) |
4.10 |
5.31 |
4.69 |
|
Return On Capital Employed(%) |
12.07 |
19.40 |
18.64 |
|
Return On Net Worth(%) |
14.19 |
28.90 |
27.73 |
LOCAL AGENCY FURTHER INFORMATION
Financial highlights
The Company earned a profit before tax of Rs. 183.035 millions as compared to a
profit of Rs. 205.428 millions the previous year.
Use
of IPO proceeds
In December 2007, the Company completed its Initial Public Offer (IPO) in India
and listed its shares on the National Stock Exchange of India Limited (NSE) and
Bombay Stock Exchange Limited (BSE). Out of the IPO proceeds of Rs.798.64
million, the Company has utilized Rs. 650.48 million up to March 31, 2008 The
detailed statement of utilization of fund vis-a-vis IPO objects is as
follows:
(Rs.
in million)
|
Objects
of IPO as projected in the prospectus
|
Utilisation
Till March, 31, 2008 |
Balance
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Sr.
No. |
Particular
|
Total
|
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1. |
Expansion of Manufacturing capacity at
bhavnagar unit (100% EOU) |
105.00 |
10.74 |
94.26 |
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2. |
Expansion of Capacity and modernization of
their Mumbai units |
35.72 |
15.40 |
20.32 |
|
3. |
Investment in foreign Subsidiary |
350.00 |
353.66 |
-3.66* |
|
4. |
Augmenting working capital requirements |
209.25 |
209.48 |
-0.23* |
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5. |
Further expansion/General corporate
purposes |
33.79 |
-- |
33.79 |
|
6. |
To meet expenses of the Issue |
64.88 |
61.20 |
3.68 |
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Total |
798.64 |
650.48 |
148.16 |
Subsidiaries
During the financial year under review the had two Indian subsidiaries i.e.
Veri-gold Fine Jewellery Private Limited (VFJPL) and Renaissance Retail Venture
Private Limited (RRVPL). During the financial year, the company has disinvested
its shares in RRVPL and acquired a 1000%o equity capital of Renaissance
Jewellery New York, Inc. (RJNY). The Company has also acquired a 100% equity
capital of L. J. Creations Private Limited on April 15, 2008.
Pursuant to Section 212 of the Companies Act, 1956, the Company is required to
attach to its Annual Report the Directors' Report and financial statements of
its subsidiaries. Since the Company presents audited consolidated financial
statements under Indian GAAP in its Annual Report, the Company has applied to
the Central Government of India for an exemption from attaching the Directors'
Report, Balance Sheet and Profit and Loss Account of its subsidiaries to the
Annual Report. The approval from the Central Government in this regard is
awaited and in case the exemption under Section 212 (8) of the Act is granted
to the Company by the Central Government, the financial statements of the
subsidiaries of the Company shall not be attached to the Annual Report of the
Company. In that case the Company undertakes that the financial statements of
the subsidiary companies for the year ended March 31, 2008 will be made
available to the members on request at the Registered Office/Corporate Office
of the Company and the same will be kept open for inspection by any member
between 10:00 a.m. and 1:00 p.m. on all working days of the Company.
Honors
and recognitions
The Company has consistently received wide recognition for Quality, Designs,
leadership and achievements.
The GEM and JEWELLERY EXPORT PROMOTION COUNCIL has awarded the Company for
outstanding export performance and contribution in the trade Category 'Studded
precious metal jewellery exports by units in EPZ/EOU Complexes', during the
year 2007-08.
MANAGEMENT'S
DISCUSSION AND ANALYSIS
Business of the Company:
They are in the business of manufacture and sale of studded gold, platinum and
silver jewellery and are primarily focused on international markets including
the USA. They have been in the studded jewellery business for over a decade and
operate through three manufacturing units of which two units are located at
SEEPZ-SEZ at Mumbai and one 100% EOU unit at Bhavnagar in Gujarat.
Their product profile includes rings, earrings, pendants, bracelets, necklaces,
etc. which are manufactured using polished diamonds, precious and other semi
precious stones which are set in precious metals like gold, platinum and
silver. They have a talent base of about 40 designers, who on an average
develop about 500 new designs every month.
They have been awarded a Certificate of Merit by GJEPC for being the
second largest exporter of studded precious metal Jewellery from SEEPZ-SEZ for
the year 2005-06. In the year 2004, they were awarded International Supplier of
the Year' by Wal-Mart and Rio Tinto Diamonds has conferred them with Business
Excellence Model (BEM) in the year 2005 certification.
Financial Performance:
The details of the financial performance of
the Company are appearing in the Balance sheet, Profit and Loss Account along
with other financial statement. Financial Highlights are as under:
Sales Turnover of Rs. 4330.000 millions compared to Rs. 3848.400 millions which
is 12.51% higher compared to the previous year. This increase in sales is
mainly on account of their focused entry into newer segments of the Jewellery
market such as Bridal and Gemstone jewellery.
The total operating costs excluding depreciation and interest aggregated to Rs.
4047.700 millions compared to Rs. 3564.100 millions during the previous year.
This increase is mainly due to cost of traded goods through newly started
Diamond Trading Division.
The other income was Rs. 7.500 millions as compared to Rs. 22.200 millions in
the previous year.
PBIDT to sales ratio was 6.68% compared to 7.97% in the previous year.
Profit before tax (PBT) was Rs. 183.000 millions as compared to Rs. 205.400
millions for the previous year. The profit after tax for the year was Rs.
177.600 millions, 13.11% lower as compared to Rs. 204.400 millions for the
previous year. The fall in the profit margins is mainly on account of the
higher consumption of material.
Earnings per equity share were Rs. 12.14 for the year as against the EPS of Rs.
15.68 for the previous year.
Provisions for Income Tax and deferred tax at Rs. 5.400 millions has been
made as per the Income Tax Act 1961 and in accordance with the provision of
Accounting Standard AS-22 relating to Accounting for Taxes on Income issued by
the Institute of Chartered Accountants of India, as against Rs. 1.000 million
during the previous year.
Industry
Overview
Global
Gems and Jewellery industry
The size of the global gems and jewellery
industry has been estimated at 146 billion US dollars at retail prices in 2005.
The industry has grown at an average CAGR rate of 5.2% since 2000. Diamond
studded jewellery is the largest segment of this industry (2005 sales estimated
at USD 69 billion) which constitutes approximately to 48% of the industry
sales. The second largest segment is plain gold jewellery segment with total
retail sales of USD 60.7 billion, constituting approximately 41% of the total
sales.
Sale of jewellery is concentrated in eight key world markets, which account for
about 75% of the total world sales of gems and jewellery. The US is the world
biggest market which accounts for approximately 31 % of the total sales. The
share of India and China has steadily shown an increase and currently account
for 8.3 and 8.9 percent of world sales respectively.
Under the gems and jewellery segment maximum value is added at the two ends of
the value chain, with intermediate segments adding relatively lower value.
Diamond cutting and polishing contributes 29% where as jewellery manufacturing
contributes 32% to the value in the final product.
Indian Gems and Jewellery
industry
The gems and jewellery industry is one of
the oldest and largest industries in terms of export earnings for India. India
today is one of the leader's in processing of near gemstone quality (low
caratage) stones. The Gems and Jewellery industry contributes around 15% of
India's exports. Exports of Gems and Jewellery aggregated to Rs. 688.30 billion
(US$15.55 billion) during FY2006, accounting for 15.1% of India's exports. As
per data released by the Gems and Jewellery Export Promotion Council (GJEPC),
during FY2006, gold jewellery exports account for 23.2%, rough diamonds 3.4%,
and others 2.3% of India's Gem and Jewellery exports.
The exports of gems and jewellery from India are mainly from the Mumbai port
which constitutes 84.4% of the total exports. Mumbai SEEPZ which is a notified
SEZ, contributes to around 8.78% of the sale from the Mumbai port.
With various government initiatives in recent years, export of gold jewellery
has increased in recent years. India's export of gold jewellery has grown at
CAGR of 25% over the last 8 years (Source: www.gjepc.org) this increase is
attributable to healthy growth in demand in key markets especially that of the
US.
US Gems and Jewellery Market
USA is the world's largest jewellery market
- the total US jewellery sales, including watches and fashion jewellery have
been estimated at $59 billion in 2005 (2004: $57 billion). In the US,
Christmas, Thanksgiving, Valentine's Day and Mother's Day are the important
jewellery-buying occasions. The US jewellery market has grown at a compound
annual growth rate of 5.7% over the last 25 years. The US retail jewellery
industry is competitive and fragmented. The US retail jewellery market includes
formats such as department stores, discount outlets, television home shopping,
internet retailers and general merchandise, apparel and accessory stores. The
largest jewellery retailer is believed to be Wal-Mart Stores, Inc., which
includes a wide assortment of costume jewellery. The US diamond jewellery sales
are believed to account for about 50% of worldwide diamond jewellery sales. In
the US market, diamond jewellery sales accounted for about 55% of total j
jewellery sales in the year 2005. In the last ten years the growth in diamond
jewellery sales has been more than a third faster than that of the total
jewellery market. The US Jewellery market is divided on the basis of store type
into two basic segments i.e. Major retail chains and independent mid-range
retailers. On the basis of data, around 43.10% and 56.90% of the jewellery
market in the US is catered by the Major retail chains and independent
retailers respectively.
Outlook:
Global jewellery sales are expected to grow
and touch USD 185 billion by 2010 and USD 230 billion by 2015. Palladium is
expected to establish itself as an alternative metal for jewellery fabrication,
while gold and diamond jewellery will continue to dominate the market together,
accounting for about 82%. The projected share of industry segments and key
consumption market trend shows that by 2015 China and India together will
emerge as a market equivalent to the US market. The Middle East will surface as
another large market, accounting for close to 9 % of the global jewellery sales
by 2015. The industry has a potential to grow up to USD 280 billion by 2015 at
a CAGR of 6.7%.
Segment
wise Performance:
The Company's operations predominantly
relate to export of Diamonds and Gold Studded Jewellery. Based on the guiding
principle given in the Accounting Standard - 17 'Segment Reporting' issued by
the institute of Chartered Accountants of India, the Company's primary segments
are Diamonds and Gold Studded Jewellery.
A
detailed statement of segment wise performance is given under notes to the accounts
which form part of this Annual Report. Highlights are as follows:
(Rs. in million)
|
Sr. No. |
Particular (Rs.) |
Diamonds
(Rs.) |
Jewellery
(Rs.) |
Total
(Rs.) |
|
1. |
Revenues |
768.478 |
3561.510 |
4329.989 |
|
2. |
Segmental Results |
4.300 |
239.152 |
243.453 |
|
3. |
Operating Profit
Before Tax (PBT) |
-- |
-- |
183.035 |
|
4. |
Profit After Tax
(PAT) |
-- |
-- |
177.623 |
|
5. |
Segment Assets |
143.748 |
2095.593 |
2223.141 |
|
|
Unallocated
Assets |
-- |
-- |
806.474 |
|
|
Total Assets |
143.748 |
2095.593 |
3045.816 |
|
|
|
|
|
|
|
6. |
Segment
Liabilities |
139.453 |
183.473 |
322.927 |
|
|
Unallocated
Liabilities |
-- |
-- |
1030.318 |
|
|
Total Liability |
139.454 |
183.473 |
1353.245 |
INDUSTRY
Overview
Global Gems and Jewellery industry
The size of the global gems and jewellery
industry is estimated at 146 billion US dollars at retail prices in 2005. The
industry has grown at an average CAGR rate of 5.2% since 2000 (Source:
GJEPC-KPMG Report titled “The Global Gems and Jewellery Industry” (GJEPC-KPMG),
2006). Diamond studded jewellery is the largest segment of this industry (2005
sales estimated at USD 69 billion) which constitutes approx to 48% of the
industry sales. The second largest segment is plain gold jewellery segment with
total retail sales of USD 60.7 billion, constituting 41% of the total sales.
Global jewellery sales are expected to grow
and touch USD 185 billion by 2010 and USD 230 billion by 2015 (Source:
GJEPCKPMG Report titled “The Global Gems and Jewellery Industry” (GJEPC-KPMG),
2006).
Indian Gems and Jewellery industry
The Indian domestic diamond jewellery market
is estimated at around Rs. 80 billion per annum in retail value (Source: ICRA “The
Indian Gems and Jewellery Sector, July, 2006).
The Gems and Jewellery industry is one of
the oldest and largest industries in terms of export earnings for India. India
today is the one of the leader’s in processing of near gemstone quality (low
caratage) stones. The Gems and Jewellery industry contributes around 15% of
India’s exports. As per the table, exports of Gems and Jewellery aggregated Rs.
688.30 billion US$15.55 billion) during FY2006, accounting for 15.1% of India’s
exports. As per data released by the Gems and Jewellery Export Promotion
Council (GJEPC), during FY2006, gold jewellery exports account for 23.2%, rough
diamonds 3.4%, and others 2.3%.
Jewellery Exports from India to USA
With various government initiatives in
recent years, export of gold jewellery has increased in recent years. India’s
export of gold jewellery has grown at CAGR of 25% over the last 8 years
(Source: www. gjepc.org) India’s exports of gold jewellery have increased in
recent years because of healthy growth in demand in key markets especially that
of the US.
USA- Jewellery Market
In terms of consumption demand, USA is the
world’s second largest gold jewellery market by volume (around 350 tonnes) and
largest by retail value (around $16billion). In the US, Christmas, end of year
festivals, Valentine’s Day, Thanksgiving Day and Mother’s Day are the important
gold-buying occasions. The total US jewellery sales, including watches and
fashion jewellery, are estimated by the US Department of Commerce to have been
$59 billion in 2005 (2004: $57 billion). The US jewellery market has grown at a
CAGR of 5.7% over the last 25 years.
The US retail jewellery industry is
competitive and fragmented. The broader total US retail jewellery market
includes formats such as department stores, discount outlets, television home
shopping, internet retailers and general merchandise, apparel and accessory
stores.
The US diamond jewellery sales are believed
to account for about 50% of worldwide diamond jewellery sales. In the US
market, diamond jewellery sales account for about 55% of total jewellery sales.
In the last ten years the growth in diamond jewellery sales has been more than
a third faster than that of the total jewellery market.
BUSINESS
Overview
They are in the business of manufacture and
sale of studded gold, platinum and silver jewellery and are primarily focused
on international markets including the USA besides marketing their studded
jewellery products through their retail stores operated by their subsidiary,
Renaissance Retail Venture Private Limited.
They have been in the studded jewellery
business for over a decade and operate through three manufacturing units of
which two units are located at SEEPZ-SEZ at Mumbai and one 100% EOU unit at
Bhavnagar in Gujarat. Besides, their subsidiary Renaissance Retail Venture
Private Limited has a manufacturing facility at MIDC, Andheri for catering to
the domestic retail market. Their subsidiary, Verigold Fine Jewellery Private
Limited has a manufacturing facility for studded jewellery in SEEPZSEZ at
Mumbai. Both their subsidiaries are wholly-owned by their Company. In July
2007, they also commenced exports of loose diamonds from their facility
situated at Opera House, Mumbai.
Their product profile includes rings,
earrings, pendants, bracelets, necklaces, etc. which are manufactured using
polished diamonds, precious and other semi precious stones which are set in
precious metals like gold, platinum and silver. They have a talent base of
about 40 designers, who on an average develop about 500 new designs every
month.
They have been awarded a Certificate of
Merit by GJEPC for being the second largest exporter of studded precious metal
jewellery from SEEPZ-SEZ for the year 2005-06. In the year 2004, they were
awarded ‘International Supplier of the Year’ by Wal-Mart and Rio Tinto Diamonds
has conferred them with Business Excellence Model (BEM) in the year 2005
certification.
On a consolidated basis, their sales for
Fiscal 2003 was Rs. 1223.24 million which has increased to Rs. 4384.49 million
for Fiscal 2007 at a CAGR of 37.59%. Their sales for the three months period
ended June 30, 2007 was Rs. 1176.52 million. Their Net profit after taxes for
Fiscal 2003 was Rs. 37.21 million which has increased to Rs. 254.12 million for
Fiscal 2006 at a CAGR of 61.66%. Their net profit for the three months period
ended June 30, 2007 was Rs. 72.26 million.
·
Unaudited
(Standalone) Financial Results For The Quarter Ended 30th June, 2008
·
(Standalone) Segment
Wise Revenue, Results And Capital Employed For The Quarter Ended 30th June,
2008
·
Unaudited
(Consolidated) Financial Results For The Quarter Ended 30th June, 2008
·
(Consolidated)
Segment Wise Revenue, Results And Capital Employed For The Quarter Ended 30th
June, 2008
UNAUDITED
(STANDALONE) FINANCIAL RESULTS FOR THE QUARTER ENDED 30TH JUNE, 2008
(Rs. In Millions)
|
SR No. |
Particulars |
Three Months Ended Unaudited |
|
1 |
Net Sales/Income
from Operations |
598.010 |
|
2 |
Other Income |
3.404 |
|
3 |
Total Income
(1+2) |
601.414 |
|
4 |
Expenditure |
|
|
|
a)
(Increase)/Decrease in Stock in Trade |
- |
|
|
b) Consumption of
Raw Materials |
449.368 |
|
|
c) Cost of Traded
Goods |
- |
|
|
d) Employees Cost
|
68.048 |
|
|
e) Other
Expenditure |
59.060 |
|
|
f) Depreciation |
5.863 |
|
|
g) Total
Expenditure (a+f) |
582.340 |
|
5 |
Finance Cost |
16.437 |
|
6 |
Exceptional Items
|
- |
|
7 |
Profit /
(Loss) from Ordinary Activities before Tax (3)- (4+5+6) |
2.637 |
|
8 |
Tax expense |
(0.576) |
|
9 |
Net Profit /
(Loss) from Ordinary Activities After Tax (7-8) |
3.214 |
|
10 |
Extraordinary
Items (net of tax Expense) |
- |
|
11 |
Net Profit /
(Loss) for the Period (9-10) |
3.214 |
|
12 |
Paid-up Equity Share
Capital |
183.594 |
|
|
( Face Value of
Rs.10/- each ) |
|
|
13 |
Reserves
excluding Revaluation Reserves |
- |
|
14 |
Earning Per Share
EPS |
|
|
|
Basic (* Not
Annualized) |
0.018 |
|
|
Diluted (* Not
Annualized) |
0.018 |
|
15 |
Public
Shareholding |
|
|
|
Number of Shares |
5324240 |
|
|
Percentage of
Shareholding |
29 |
UNAUDITED
(CONSOLIDATED) FINANCIAL RESULTS FOR THE QUARTER ENDED 30TH JUNE, 2008
(Rs. In Millions)
|
SR No. |
Particulars |
Three Months Ended Unaudited |
|
|
|
30.06.2008 |
|
1 |
Net Sales/Income
from Operations |
1105.593 |
|
2 |
Other Income |
6.899 |
|
3 |
Total Income
(1+2) |
1112.492 |
|
4 |
Expenditure |
|
|
|
a)
(Increase)/Decrease in Stock in Trade |
- |
|
|
b) Consumption of
Raw Materials |
804.019 |
|
|
c) Cost of Traded
Goods |
44.641 |
|
|
d) Employees Cost
|
109.277 |
|
|
e) Other
Expenditure |
78.667 |
|
|
f) Depreciation |
7.745 |
|
|
g) Total
Expenditure (a+f) |
1044.350 |
|
5 |
Finance Cost |
24.569 |
|
6 |
Exceptional Items
|
- |
|
7 |
Profit /
(Loss) from Ordinary Activities before Tax (3)- (4+5+6) |
43.574 |
|
8 |
Tax expense |
(0.412) |
|
9 |
Net Profit /
(Loss) from Ordinary Activities After Tax (7-8) |
43.986 |
|
10 |
Extraordinary
Items (net of tax Expense) |
- |
|
11 |
Net Profit /
(Loss) for the Period (9-10) |
43.986 |
|
12 |
Paid-up Equity
Share Capital |
183.594 |
|
|
( Face Value of
Rs.10/- each ) |
|
|
13 |
Reserves
excluding Revaluation Reserves |
- |
|
14 |
Earning Per Share
EPS (Rs.) |
|
|
|
Basic (* Not
Annualized) |
0.240 |
|
|
Diluted (* Not
Annualized) |
0.240 |
|
15 |
Public
Shareholding |
|
|
|
Number of Shares |
5324240 |
|
|
Percentage of
Shareholding |
29 |
Notes:
1. The above Unaudited Consolidated
Financial Results have been reviewed by the Audit Committee in the meeting held
on July 30, 2008 and approved by the Board of Directors in its meeting held on
July 30,2008.
2. A Limited Review of the Consolidated
Financial Results for the quarter ended June 30, 2008 has been carried out by
the Statutory Auditors of the Company.
3. The company has acquired 100% holding in
"L.J. Creations Private Limited" during the quarter and the results
of the said company are incorporated in the consolidated financial statements
of the company.
4. The Unaudited Consolidated Financial
Results consists of the results of Renaissance Jewellery Limited, Verigold Fine
Jewellery Private Limited, Renaissance Jewelry New York Inc. and L.J. Creations
Private Limited, which together constitutes the "Group".
5. The Board at its meeting held on June 30,
2008, has approved the amalgamation of "Verigold Fine Jewellery Private
Limited" and "L.J. Creations Private Limited" which are each
100% Subsidiaries with "Renaissance Jewellery limited" and necessary
formalities are in progress
6. The position of funds raised in IPO
including share premium and utilisation thereof as per the Objects of the issue
upto June 30, 2008 is as under:
|
Particulars |
Rs. In Millions |
|
Funds raised
(including share premium) |
798.636 |
|
Utilisation |
|
|
Expansion of
manufacturing Capacity at Bhavnagar Unit ( 100% EOU) |
16.340 |
|
Expansion of Capacity
and modernisation of Mumbai units |
22.021 |
|
Investment in
Foreign subsidiary |
353.656 |
|
Augmentng working
capital requirements |
227.761 |
|
Expenses incurred
towards the IPO |
61.208 |
|
Total
Utilisation : |
680.986 |
|
Balance of Unutilised
funds |
|
|
Lying in
Liquid Mutual Funds and Fixed Deposits |
117.650 |
7. Status of Investors Complaints (Nos):
Opening Balance as on April 01, 2008 (Nil);Received during the quarter(91);Disposed
of during the quarter (91);Closing Balance as on June 30, 2008(Nil).
8. During the quarter ended June 30, 2008,
there was only one reportable segment i.e. Studded Jewellery.
9. As per Clause 41 of the Listing
Agreement, the standalone results will be available on the Company's website
www.renjewellery.com
10. As the Company's Equity Shares were
listed on Stock Exchanges in the month of December 2007, compliance under
Listing Agreement was not applicable before such date and hence, the comparative
figures of the corresponding quarter ended June 30, 2007 have not been
disclosed.
11. Previous year's
figures have been re-grouped/ re-arranged wherever considered necessary.
NOTES TO ACCOUNTANT
(Rs. In millions)
|
Contingent liabilities not provided in
respect of: |
31.03.2008 |
|
|
1 |
Guarantee given
by banks on behalf of the company to third parties |
80.000 |
|
2 |
Guarantee given
by banks against credit facilities extended to subsidiary company |
26.000 |
|
3 |
Penalty levied by
the custom authorities |
0.311 |
|
4 |
Income tax demand
disputed in appeal |
|
|
|
Disputed by the
company |
5.654 |
|
|
Disputed by the
department |
6.111 |
|
5 |
Estimated amount of
contact remaining to be executed on capital amount (Net of advances) |
4.684 |
Segment Reporting
Primary Segment
The company
operations predominantly relate to expert of diamond and gold studded jewellery.
Based on the guiding principle given in the accounting slandered – 17 segment
reporting issued by the institute of chartered accountant of India, the company
primary segments are gold studded jewellery.
As per website
The Innovation
Subject takes pride
in their modern design studio complete with a state-of-the-art CAD/CAM
facility. Their dedicated team of 40 designers is, well versed on the latest
international trends and contributes at least 400 innovative designs monthly to
their ever-expanding portfolio of over 25,000 styles. The majority of their
current models are produced using CAD/CAM to ensure precision.
The Creation
Their world-class
production units consist of 1,400 plus highly skilled workers with access to
the latest in tools and machinery including a laser-soldering machine, Nutech
J10 casting machine and OTEC Stream Liner machine, just to mention a few.
Production is geared for over 80,000 pieces a month. Their production unit is
capable of meeting their clients’ most stringent requirements. High quality and
efficient production are the bywords of the shop floor.
The Relation
Subject values
developing a long-term partnership above marking a short-term sale. Their focus
has always been on the timely delivery of quality goods. Every piece is assayed
on their CMI machine for correct karatage and checked by an independent quality
control team before shipping. Their customer-oriented marketing team ensures a
quick turnaround of information and a consistent follow up customer requirements.
Promoters
Mr.
Niranjan A. Shah aged 60 years, has over 37 years experience in the gems and
jewellery business. He started his career as partner of N Kumar Diamonds and
Company on July 23, 1970. He later also became partner of M/s Sumit Diamond on
March 22, 1978. He is a Promoter Director and the Chairman of their Company. He
is the managing director of one of their group companies Housefull
International Limited. As a non- executive chairman, he advises on the overall
strategy of their Company. He is also a director of Fancy Jewellery Private
Limited, Verigold Fine Jewellery Private Limited, Anika Jewellery Private
Limited, N. Kumar Diamonds Exports Limited and Renaissance Retail Venture
Private Limited.
Mr. Niranjan A. Shah joined the Board of Directors of their
Company in 1995 and was appointed as Chariman of their Company with effect from
January 1, 2003.
Mr. Sumit N. Shah, aged 33 years, Son of Mr. Niranjan
A. Shah, is a graduate from the Bentley College, Boston and has over 10 years
of experience in the gems and jewellery business. He started his career with
Mayur Gems and Jewellery Private Limited as a Director in the year 1995. He is
the Managing Director of their Company and he is responsible for strategic
planning, business promotion, monitoring long-term plans of their Company and
technology transfer/ up-gradation. He is also a Director of N. Kumar Diamond
Exports Limited, Fancy Jewellery Private Limited, Anika Jewellery Private
Limited, House Full International Limited, and Renaissance Retail Venture
Private Limited. He is also a partner in M/s Sumit Diamond.
Mr. Sumit N. Shah joined the Board of Directors of their
Company in August 3 1995, and was appointed as Managing Director with effect
from February 1, 2006.
Mr. Hitesh M. Shah, aged 35 years, is a bachelor in
Commerce from Bombay University and has over 12 years of experience in the gems
and jewellery business. He was earlier working with Sudiam B.V.BA, Japan as
president and was responsible for managing operations. Mr. Hitesh M. Shah
joined their Company as Chief Financial Officer and was appointed as an
Executive Director in January 2003. He is responsible for product development,
merchandising, marketing and financial planning. He is also a Director in N.
Kumar Diamond Exports Limited, Fancy Jewellery Private Limited, Anika Jewellery
Private Limited, House Full International Limited, and Renaissance Retail
Venture Private Limited. He is also a partner in M/s Sumit Diamond.
Mr. Hitesh M. Shah joined the Board of Directors of their
Company on September 3, 2003, and was re-appointed as Executive Director with
effect from January 1, 2006.
Mr. Veerkumar C. Shah, 61 years is an
Independent Director of their Company. He is a practicing Chartered Accountant.
He has over 35 year experience in accountancy. He is a director in Kotak
Chemicals Limited. He is also member of Audit Committee, Shareholders and
Investor Grievance Committee, Remuneration Committee and Chairman of the Audit
committee.
Mr. Veerkumar. C Shah joined the Board of Directors of their
Company on February 1, 2006
Mr. Anil K. Chopra, 63 years, is an additional Director
of their Company. He has a Post Graduate Diploma in Management (recognized in
India as equivalent to a Masters in Business Administration) from Indian
Institute of Management, Ahmedabad and holds a B,Sc (Honours) Degree in
Chemistry from the Calcutta University. He has 40 years experience interalia
marketing of durables and non-durables, commercial operations and management of
Business Ethics. He started his career in Voltas Limited in 1967 and continued
in various corporate assignments with them till 1998. From 1999 to 2004, till
his retirement, he was on deputation from Voltas to Tata Sons Limited, as
Senior Consultant, Management of Business Ethics, Tata Quality Management
Services. Mr. Chopra has been active in various positions in academics,
Industry Associations and Social institutions including Rotary International,
Transparency International, Center for Business Ethics, Bentley College,
Waltham USA, Conference Board and Tiri, a London based NGO.
Mr. Anil K. Chopra joined the Board of Directors of their
Company on April 3, 2007.
Mr. Pramod H. Lele, 58 years is an Independent Director
of their Company. He holds a Bachelor’s Degree in Commerce from Mumbai University,
a Bachelor’s Degree in Law from Mumbai University, and is a qualified member of
the Association of Cost Accountants and Institute of Cost and Work Accountants
of India. Mr. Lele is the CEO of P.D. Hinduja National Hospital and Medical
Research Centre. He has over 31 years of experience. Mr. Pramod H. Lele has
formerly been associated with the organizations namely Park Davis (India)
Limited as Managing Director, Johnson And Johnson Limited, as Executive Vice
President- Consumer Business and HRD, and Board of Internal Trade, Dar- Es-
Salaam as Internal Auditor, and Duphar-Interfran Ltd as Internal Auditor.
Mr. Pramod H. Lele joined the Board of Directors of their
Company on April 3, 2007
Mr. Vishwas. V. Mehendale, 49 years is an Additional Director of their Company.
He holds a Bachelor’s Degree in Commerce from Sydenham College, Mumbai and a
Bachelor’s Degree in law from New Law College, Matunga and is a qualified
F.C.A. Mr. Vishwas. V Mehendale is a practicing Chartered Accountant. He is the
proprietor of V. V.Mehendale and Co., Chartered Accountants and a partner in a
firm of chartered accountants M/s Trilokekar Thosar and Associates. Mr.Vishwas
V. Mehedalehas over 27 years of experience in areas relating to finance,
taxation and auditing.
Mr. Vishwas V. Mehendale joined the Board of Directors of
their Company on April 3, 2007
Mr. Neville R. Tata, 32 years their Executive Director,
has been associated with their Company since the last 7 years. He has total
work experience of 14 years. He has completed his H.S.C education from Mithibai
College, Mumbai. Prior to joining them, Mr. Tata has worked with Inter Gold
Private Limited as a Production Manager. Mr. Tata was Chief Operating Officer
and was responsible for overseeing operational functioning of their factories.
He is currently responsible for the entire operations with relation to
production activities’ starting with product planning, ensuring quality of
product and taking corrective and preventive actions while producing the
product.
Mr. Neville Tata joined the Board of Directors of their
Company as Executive Director with effect from February 1, 2006
FIXED ASSETS
Tangible Assets
·
Land
·
Building
·
Plant and
Machinery
·
Furniture and
Fittings
·
Electrical
Installations
·
Office
Equipment
·
Computers
·
Vehicles
Intangible Assets
·
Computer
Software
Press
Releases
Renaissance
Jewellery files prospectus for IPO
Bureau
Mumbai , May 4
Mumbai-based Renaissance Jewellery has filed draft prospectus for its initial public offer (IPO) with the Securities and Exchange Board of India.
The company intends to offer 3.510 millions equity shares of Rs 10 each at a price to be fixed through the book-building route.
The issue would constitute 35 per cent of the fully diluted post issue paid-up capital of the company.
They have filed the red herring draft prospectus with Securities and Exchange Board of India on April 28 last, and when to hit the market depends on market conditions," Mr Hitesh Shah, Executive Director, Renaissance Jewellery Ltd, said in a release. A 100 per cent export oriented unit (EOU), Renaissance Jewellery is a leading manufacturer of studded gold, platinum and silver jewellery for over 10 years. The company has manufacturing unit at Mumbai (two units located at SEEPZ, SEZ, Andheri, Mumbai) and one unit at Bhavnagar, Gujarat.
CMT REPORT [Corruption, Money laundering and 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 Diigence 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.47.08 |
|
UK Pound |
1 |
Rs.71.17 |
|
Euro |
1 |
Rs.66.98 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
7 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
NO |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
63 |
This score serves as a reference to assess SC’s credit risk and
to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial condition (40%) Ownership background
(20%) Payment record (10%)
Credit history (10%)
Market trend (10%)
Operational size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED
CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely
sound financial base with the strongest capability for timely payment of
interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses
adequate working capital. No caution needed for credit transaction. It has
above average (strong) capability for payment of interest and principal sums |
Large |
|
56-70 |
A |
Financial and
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 and
favourable factors carry similar weight in credit consideration. Capability to
overcome financial difficulties seems comparatively below average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors
are apparent. Repayment of interest and principal sums in default or expected
to be in default upon maturity |
Limited with full security |
|
<10 |
C |
Absolute credit
risk exists. Caution needed to be exercised |
Credit not recommended |
|
NR |
In view of the
lack of information, we have no basis upon which to recommend credit dealings |
No Rating |
|