MIRA
INFORM REPORT
|
Report Date : |
18.02.2011 |
IDENTIFICATION DETAILS
|
Name : |
SHRENUJ AND COMPANY LIMITED |
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Registered
Office : |
405, |
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Country : |
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Financials (as
on) : |
31.03.2010 |
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Date of
Incorporation : |
13.04.1982 |
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Com. Reg. No.: |
11-026903 |
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CIN No.: [Company Identification
No.] |
L99999MH1982PLC026903 |
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TAN No.: [Tax Deduction &
Collection Account No.] |
MUMS38907B |
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PAN No.: [Permanent Account No.] |
AAACS0690P |
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Legal Form : |
Public Limited Liability Company. Company’s shares are listed on the
stock Exchanges. |
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Line of Business
: |
Manufacturer of consistent quality jewellery from its facilities in
Mumbai and in |
RATING & COMMENTS
|
MIRA’s Rating : |
A (58) |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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Maximum Credit Limit : |
USD 9900000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well established and reputed company having fine track.
Financial position of the company appears to be sound. Directors are reported
as experienced and respectable
businessmen. Trade relations are reported as fair. Business is active.
Payments are reported to be regular and as per commitments. The company can be considered normal for business dealings at usual
trade terms and conditions. |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – April 1, 2010
|
Country Name |
Previous Rating (31.12.2009) |
Current Rating (01.04.2010) |
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A1 |
A1 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
LOCATIONS
|
Registered Office : |
405, |
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Tel. No.: |
91-22-56373500 |
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Fax No.: |
91-22-23632982 |
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E-Mail : |
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Jewellery Division |
G-21, Gem and Jewellery Complex – II, Seepz Andheri ( East ), Mumbai –
400 096, |
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Tel. No.: |
91-22-56946210/ 66946100 |
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Fax: |
91-22-56946161 |
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Email: |
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Overseas Offices : |
Located at: ·
·
Joliese ·
·
·
·
·
·
·
UAE ·
Germay ·
·
·
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DIRECTORS
As on 31.03.2010
|
Name : |
Mr. Kirtilal K Doshi |
|
Designation : |
Chairman Emeritus |
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Name : |
Mr. Shreyas K Doshi |
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Designation : |
Chairman and Managing Director |
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Name : |
Mr. Vishal S Doshi |
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Designation : |
Group Executive Director |
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Name : |
Mr. Nihar N Parikh |
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Designation : |
Executive Director |
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Name : |
Dr. B R Brwale |
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Designation : |
Independent Director |
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Name : |
Dr. Surendra A Dave |
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Designation : |
Independent Director |
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Name : |
Mr. Keki M Mistry |
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Designation : |
Independent Director |
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Name : |
Mr. Minoo R Shroff |
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Designation : |
Independent Director |
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Name : |
Mr. Suresh N Talwar |
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Designation : |
Independent Director |
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Name : |
Mr. S S Thakur |
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Designation : |
Independent Director |
KEY EXECUTIVES
|
Name : |
Mr. Sanjay M Abhyankar |
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Designation : |
Company Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 31.12.2010
|
Names of Shareholders |
No. of Shares |
Percentage |
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(A) Shareholding of Promoter and Promoter Group |
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32,288,814 |
42.49 |
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14,934,665 |
19.65 |
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47,223,479 |
62.15 |
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Total shareholding of Promoter and Promoter Group (A) |
47,223,479 |
62.15 |
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(B) Public Shareholding |
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|
24,750 |
0.03 |
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5,124,255 |
6.74 |
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1,342,519 |
1.77 |
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1,315,182 |
1.73 |
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2,000 |
- |
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|
2,000 |
- |
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7,808,706 |
10.28 |
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4,429,544 |
5.83 |
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10,177,119 |
13.39 |
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2,035,377 |
2.68 |
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4,310,770 |
5.67 |
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1,433,888 |
1.89 |
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1,174,576 |
1.55 |
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1,682,706 |
2.21 |
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19,600 |
0.03 |
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20,952,810 |
27.57 |
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Total Public shareholding (B) |
28,761,516 |
37.85 |
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Total (A)+(B) |
75,984,995 |
100.00 |
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(C) Shares held by Custodians and against which Depository Receipts
have been issued |
- |
- |
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- |
- |
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- |
- |
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- |
- |
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Total (A)+(B)+(C) |
75,984,995 |
100.00 |
(1) Indian
Individuals / Hindu Undivided Family
TrustsBUSINESS DETAILS
|
Line of Business : |
Manufacturer of consistent quality jewellery from its facilities in
Mumbai and in |
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Products : |
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PRODUCTION STATUS AS ON 31.03.2010
|
Particulars |
Unit |
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Actual
Production |
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Diamonds |
Carts |
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314578 |
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Studded Jewellery |
Nos. |
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30381 |
GENERAL INFORMATION
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Bankers : |
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Facilities : |
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Banking
Relations : |
-- |
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Auditors : |
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Name : |
Rajendra and Company Chartered Accountant |
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Wholly Subsidiaries: |
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Subsidiaries: |
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Associates: |
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CAPITAL STRUCTURE
As on 13.08.2010
Authorised Capital : Rs. 350.000 Millions
Issued, Subscribed & Paid-up Capital : Rs. 151.970
Millions
As on 31.03.2010
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 |
|
|
|
|
|
|
69322620 |
Equity Shares |
Rs. 2/- each |
Rs. 138.645
Millions |
Notes:
1) Of the above Equity shares:
a) 80,99,800 shares were issued pursuant to the scheme of amalgamation
without payment being received in cash.
b) 66,92,070 shares were issued pursuant to the exercise of option by
the holders of Foreign Currency Convertible Bonds.
2) The Company has reserved 31,31,527 Equity shares of Rs. 2/- each to
be issued to eligible employees of the Company and its subsidiary companies
under Employee Stock Option Scheme. During the year 2009-10 the has Company
granted 15,65,763 options to the eligible employees for subscribing to
equivalent numbers of fully paid up equity shares of the Company at a price of
Rs. 21/- per share.
The option would vest over a period of three years from the date of
grant based on specified criteria.
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
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1] Share Capital |
138.645 |
138.645 |
138.645 |
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2] Share Warrents |
0.000 |
0.000 |
20.334 |
|
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3] Reserves & Surplus |
2344.437 |
1842.477 |
2045.817 |
|
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
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NETWORTH |
2483.082 |
1981.122 |
2204.796 |
|
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LOAN FUNDS |
|
|
|
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1] Secured Loans |
7709.229 |
7792.507 |
5346.328 |
|
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2] Unsecured Loans |
284.823 |
1197.144 |
1035.414 |
|
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TOTAL BORROWING |
7994.052 |
8989.651 |
6381.742 |
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DEFERRED TAX LIABILITIES |
61.847 |
61.147 |
58.147 |
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|
|
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TOTAL |
10538.981 |
11031.920 |
8644.685 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
510.927 |
530.575 |
551.687 |
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Capital work-in-progress |
73.738 |
72.072 |
77.061 |
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INVESTMENT |
1268.107 |
1260.001 |
1259.711 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
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Inventories |
6089.400
|
6859.891 |
4206.993 |
|
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Sundry Debtors |
5488.538
|
4832.788 |
3648.720 |
|
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Cash & Bank Balances |
457.826
|
907.872 |
366.098 |
|
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Other Current Assets |
0.000
|
0.000 |
0.000 |
|
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Loans & Advances |
757.087
|
909.634 |
1141.784 |
|
Total
Current Assets |
12792.851
|
13510.185 |
9363.595 |
|
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Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
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Sundry Creditors |
3962.929
|
4202.996 |
1943.341 |
|
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Other Current Liabilities |
2.672
|
4.178 |
2.785 |
|
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Provisions |
141.041
|
133.739 |
661.243 |
|
Total
Current Liabilities |
4106.642
|
4340.913 |
2607.369 |
|
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Net Current Assets |
8686.209
|
9169.272 |
6756.226 |
|
|
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
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TOTAL |
10538.981 |
11031.920 |
8644.685 |
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PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
10352.222 |
9113.661 |
9873.666 |
|
|
|
Other Income |
12.873 |
6.296 |
4.523 |
|
|
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TOTAL (A) |
10365.095 |
9119.957 |
9878.189 |
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|
|
|
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Less |
EXPENSES |
|
|
|
|
|
|
|
Material Cost |
8719.153 |
7453.237 |
7928.110 |
|
|
|
Manufacturing and Other Expenses |
615.820 |
768.773 |
944.929 |
|
|
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TOTAL (B) |
9334.973 |
8222.010 |
8873.039 |
|
|
|
|
|
|
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Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
1030.122 |
897.947 |
1005.150 |
|
|
|
|
|
|
|
|
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Less |
FINANCIAL
EXPENSES (D) |
752.770 |
643.600 |
490.315 |
|
|
|
|
|
|
|
|
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|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
277.352 |
254.347 |
514.835 |
|
|
|
|
|
|
|
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|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
39.912 |
38.737 |
36.924 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
237.440 |
215.610 |
477.911 |
|
|
|
|
|
|
|
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Less |
TAX (I) |
82.700 |
348.220 |
171.647 |
|
|
|
|
|
|
|
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|
PROFIT AFTER TAX
(G-I) (J) |
154.740 |
132.610 |
306.264 |
|
|
|
|
|
|
|
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|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
523.558 |
430.145 |
349.020 |
|
|
|
Excess
Provision for Taxation written back |
0.335 |
-- |
[3.408] |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Transfer to General Reserve |
20.000 |
10.000 |
156.848 |
|
|
|
Proposed Dividend |
34.809 |
24.956 |
55.458 |
|
|
|
Tax on Proposed Dividend |
5.781 |
4.241 |
9.425 |
|
|
BALANCE CARRIED
TO THE B/S |
618.043 |
523.558 |
430.145 |
|
|
|
|
|
|
|
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EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Export Earnings |
7618.268 |
7538.302 |
9199.687 |
|
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TOTAL EARNINGS |
7618.268 |
7538.302 |
9199.687 |
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|
|
|
|
|
|
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IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
5755.057 |
6463.547 |
5688.059 |
|
|
|
Stores & Spares |
2.277 |
60.005 |
14.355 |
|
|
|
Capital Goods |
10.178 |
6.606 |
19.767 |
|
|
TOTAL IMPORTS |
5767.512 |
6530.158 |
5722.181 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
|
|
|
|
|
|
Basic |
2.24 |
1.91 |
4.37 |
|
|
|
Diluted |
2.21 |
1.91 |
4.37 |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2010 |
30.09.2010 |
31.12.2010 |
|
Type |
1st
Quarter |
2nd
Quarter |
3rd
Quarter |
|
Net Sales |
2503.200 |
3175.240 |
5232.260 |
|
Total Expenditure |
2277.590 |
2906.560 |
4912.320 |
|
PBIDT (Excl OI) |
225.610 |
268.680 |
319.940 |
|
Other Income |
1.890 |
2.910 |
1.640 |
|
Operating Profit |
227.490 |
271.590 |
321.580 |
|
Interest |
139.320 |
159.050 |
206.530 |
|
Exceptional Items |
0.000 |
0.000 |
0.000 |
|
PBDT |
88.170 |
112.540 |
115.050 |
|
Depreciation |
10.330 |
14.910 |
15.700 |
|
Profit Before Tax |
77.840 |
97.620 |
99.350 |
|
Tax |
26.600 |
20.120 |
24.800 |
|
Provisions and contingencies |
0.000 |
0.000 |
0.000 |
|
Profit After Tax |
51.250 |
77.500 |
74.550 |
|
Extraordinary Items |
0.000 |
0.000 |
0.000 |
|
Prior Period Expenses |
0.000 |
0.000 |
0.000 |
|
Other Adjustments |
0.000 |
0.000 |
0.000 |
|
Net Profit |
51.250 |
77.500 |
74.550 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
PAT / Total Income |
(%) |
1.49
|
1.45 |
3.10 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
2.29
|
2.37 |
4.84 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
1.78
|
1.54 |
4.82 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.10
|
0.11 |
0.22 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
4.87
|
6.73 |
4.08 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
3.12
|
3.11 |
3.59 |
LOCAL AGENCY FURTHER INFORMATION
BUSINESS
PERFORMANCE:
Remarkable economic recovery was witnessed in the global markets in the
second half of FY 2009-10 from the recessionary trends of the previous year. The
entire luxury market segment gained from increased consumer spending. Sales
performance in diamonds as well as jewellery segments met the target, with
marked improvements in margins. Initiatives to improve operational efficiencies
and synergising operations worldwide led to reduced costs and improvements in
product and service quality.
During the year 2009-10, the Company recorded revenue of Rs. 10365.100
Millions, an increase of 13.65% over the previous year. EBIDTA at Rs. 1030.100
Millions rose to 9.95% of the turnover from 9.49% in FY’09. Net Profit at Rs.
155.100 Millions has increased by 17% compared to previous year’s profit
despite higher interest outgo at Rs. 752.800 Millions (Rs. 643.600 Millions)
due to increased share of rupee borrowings owing to limited availability of USD
loans. However, despite the global financial turmoil, the increase in
profitability is a reflection of improved operational efficiencies.
There was wide disparity in growth rates across countries resulting in
serious impact on risk perceptions. Abundant caution in managing country
specific risks had hence to be exercised. The mitigation of this country
specific risk was achieved through spreading the distribution footprint across
15 countries in four continents, an initiative that has been the key focus over
the past 10 years. In a year where the growth was driven by emerging markets,
they were able to swiftly shift focus to high growth markets in the eastern
hemisphere while maintaining the position in the western markets, which were
reeling under financial crisis. They were also able to penetrate new markets in
Northern Africa, Middle East and
The group companies worldwide continued to perform well in their
respective regions and reported higher than projected growth in sales. The
consolidated sales revenue in FY’10 increased by 29% to Rs. 18899.600 Millions
(Rs. 14601.000 Millions). Net profit registered a growth of 114% to Rs. 507.700
Millions (Rs. 237.200 Millions). EPS for the period (basic) stood at Rs. 7.32
(Rs. 3.42) on a face value of Rs. 2/- each.
As a result of the superior product and service offerings over the past
few years, they have gained larger market shares in each of the major markets
where they operate.
They are witnessing high growth in the operations in
The volatility in currency rates was also a major cause of concern in
FY’10. However, with the rupee stabilizing against US dollar, the adverse MTM
reported in FY’09 was turned favourable. The treasury operations of the Company
continue to be closely monitored to track currency movements and appropriate
measure are taken to hedge currency risks. With the ensuing gain in forex, the
net worth of the Company has been restored, in line with the revised
projections. They have also taken adequate care to protect against the
volatility in gold and precious metal prices.
NEW INITIATIVES:
Presence in rough diamond producing countries has assumed a high
priority for many years. In 2009, an opportunity emerged for acquiring a
diamond manufacturing unit in
The Company commissioned its manufacturing facility in
In 2009-10, the Company also started its operations in
With the gradual recovery in world economy, consumer interest in
jewellery has revived. The Company’s retail strategy has focused on high growth-low
risk developing markets like
They are progressing well with the retail expansion in
The Company plans to increase its presence at the higher end of value
chain, i.e. jewellery manufacturing and retailing, while maintaining its focus
on diamond processing. The superior and innovative jewellery designing and
efficient manufacturing capabilities, significant experience in branding and
sales of branded jewellery lines, marketing capabilities and well-developed
retail operations will enable the Company to pursue this strategy with great
success, thereby improving margins.
MANAGEMENT
DISCUSSION AND ANALYSIS
2009-10: An
overview
The 2009 scenario for diamond and jewellery industry was exceptional.
The rate of decline in 2008 was equally matched by the rise in 2009. The
economic swings were far more pronounced than ever in the recent past.
Consumers across the globe were uncertain whether the recovery was transient or
permanent. Luxury markets across the globe were faced with sharp declines in
demand. Prices of precious metals recorded sharp movements in both directions.
Consumer confidence indices did show some improvements towards the latter half
of the year but did not convert into sales of diamond jewellery in all markets.
Despite this, the fact that the diamond industry survived the brunt of economic
downturns with minimal bankruptcies is remarkable.
The long-term supply fundamentals and the reduced rough diamonds
availability will drive the recovery in prices of rough diamonds but the prices
are not likely to go back to 2007 levels yet. Russian mining production
continued but was being stocked rather than being sold in the market as the
demand declined. Towards the end of the year, Russian goods were available
again through tender sales. The 2009 pipeline reflects the most severe
single-year contraction of the diamond pipeline since World War II, as a result
of the economic crisis and the resultant liquidity shortages. The industry
managed the crisis remarkably well, and a “free fall” of prices and a spate of
bankruptcies and/or insolvencies were avoided.
The amount of “distress” sales was minimal, at least in terms of “what
could have been.” The industry realized that the contraction was the logical result
of the (reverse) ripple effect, the process of severe de-stocking at all levels
of the pipeline. This culminated in about a 50 percent reduction in rough
diamond supplies into the pipeline.
Anticipating this fall in demand, producers reduced mining operations.
Most of the diamond mines underwent “maintenance” and resumed production only
in the latter part of the year.
Consumer Demand
Declined Modestly
On the downstream side of the pipeline, worldwide diamond jewellry
consumer demand fell by less than 10 percent. The decline was not distributed
equally. The most severely hit was the
modest at around 2 percent.
While the
Global Mining
Output Down 40 Percent
The value of the worldwide mining output fell from $14.3 billion in 2008
to $8.4 billion in 2009. In terms of carats, worldwide production went down
from 165 million carats in 2008 to 124 million carats in 2009, including
industrial qualities.
The Zimbabwean output was out of bounds due to restrictions posed by
Kimberley Certification authorities.
The Manufacturers
Destocked Heavily
The diamond content in retail sales, measured in polished diamond
wholesale prices, went down from $18.4 billion in 2008 to $15.9 billion in
2009. In 2009, mostly pipeline stocks were sold, which resulted in new polished
diamond production of some $12.6 billion; this figure was well below the sales
of $15.9 billion.
The $3 billion stock withdrawal does not only represent what they call
the “overhang” but also shows stocks becoming available because of the decision
to replenish at a lower level. This is part of the ripple effect. At the end of
2009, they did not see excess stocks in the diamond cutting centers – on the
contrary, there was probably a $0.05 billion shortage at year’s end, causing
such a buoyant rough diamond demand in early 2010.
The year ahead:
forecast
The year 2009 was unusual, and they expect the 2010 pipeline to look
quite different. The most exciting news is that at the end of 2009, the retail
level reached a stabilization phase as the downward slide came to a halt. The
retail level will move sideways in 2010. Because of the ripple effect, this
means that in all upstream levels of the pipeline they expect a healthier
demand to materialize.
In 2010, they envisage that rough diamond demand from the cutting
centers to go up by some 30 percent to touch $17 billion. The Rough diamond
producers’ sales to industry will jump from its $7.1 billion to reach $12
billion.
Indian Diamond Industry: 2009-10 Gems and jewellery form an integral
part of Indian tradition. A legacy passed from one generation to another. The
components of jewellery include not only traditional gold but also diamond,
platinum accompanied by a variety of precious and semi-precious stones.
According to Credit Analysis and Research Limited (CARE), the domestic
jewellery market in
With consumer consciousness increasing, the future of organised retail
in
The Gem and Jewellery Export Promotion Council’s (GJEPC) performance
figures for the financial year 2009-10 showcased the true resilience of the
Indian industry over the last year whence it continued with its consistent
plans of building trading relations and penetrating newer markets. Total net
exports of gems and jewellery in April 2009 - March 2010, touched US$ 27.67
billion posting a growth of 16.67% over the previous year, according to the
GJEPC. In rupee terms, the growth was 21.09%. Cut and polished diamonds
registered a growth of 20.11%, resulting in net exports of US$ 17.54 billion,
while there was a marked decline in the exports of rough diamonds from 30.71
million carats in 2008-09 to 24.47 million carats in 2009-10.
OPERATIONAL
PERFORMANCE:
While the management was actively consolidating its operations it
focussed on optimizing cost efficiencies to enable the business to cope with
the economic crisis. The result of this is reflected in the exceptional
performance, viewed in perspective of the dwindling consumer confidence. The
Company has been able to gain inroads in new markets and strengthen its
presence in the existing markets. The Company recorded 29% increase in its
sales revenue (consolidated) in the year ending 31 March 2010 to Rs. 18899.500
Millions (Rs. 14601.000 Millions). Net profit registered a growth of 114% to
Rs. 507.700 Millions (Rs. 237.200 Millions).
Having consolidated its business in manufacturing and distribution, the
management is now focussed on expanding Company’s retail footprint. It has
continued its growth in the retail segment in
Financial
performance:
Overview
The financial statements have been prepared in compliance with the
requirements of the Companies Act, 1956, and Generally Accepted Accounting
Principles (GAAP) in
Results
The financial performance reflects the strength of the Company’s
leadership, strategy and ability to navigate through challenging economic
environment. The Company’s revenues grew by 13.65% from Rs. 9113.600 Millions
to Rs. 10365.100 Millions. Net profit after tax rose marginally from 1.45% to
1.50%. The consolidated revenues grew by 29% from Rs. 14601.000 Millions to Rs.
18899.600 Millions. Consolidated profit after tax recorded an impressive growth
of 114% from Rs. 237.200 Millions Rs. 507.700 Millions. The basic EPS on
consolidated basis more than doubled from Rs. 3.42 to Rs. 7.32.
Outlook,
opportunities and threats
Outlook
The world diamond market has recovered well from the bottoms of 2008-09.
The recovery has been prompt and sustained and they expect the trend to
continue over the coming years. The
The liquidity position for companies in diamond industry remains a
matter of concern as the credit cycles have remained long. However, the profit
margins are now stable and have shown some growth over the last quarter. As the
consumer demand picks up in the major markets, they expect the stress on cash
liquidity to ease, along with overall reduction in debt of the industry.
The price of rough diamonds has shown an upward trend in the recent months.
The future of diamond manufacturing entities will depend on securing continued
supplies from larger mining companies. The Company was able to add DTC Botswana
to its list of reputed suppliers such as DTC, Rio Tinto and Harry Winston
during the last year. After stabilizing the functioning of a diamond cutting
facility, work has started for setting up a jewellery manufacturing unit in
The Company is likely to outperform the Indian industry in the coming
years, as it has done over the past many years. Management’s efforts to
rationalize manufacturing operations have yielded desired results. The thrust
now is on integrating the new technology for maximizing the output from each
unit and maintaining highest levels of quality in products.
In the fast growing jewellery operations of the Company, the efforts to
achieve optimal capacity utilization have delivered higher profit margins. The
in-house teams have worked on creating defect-free products and minimizing the
process lead-times. They are now rated amongst the best-in-class manufacturers
of diamond jewellery by some of the leading national retailers and have
received accolades and awards for the performance.
They use the service of in-house designers as well as those of
free-lancers in developing product designs as per emerging market trends. They
also use innovation in designs as well as in technology to develop new
products. The product development is an interactive exercise with inputs from
customers as well as consumers. The product designs have been acclaimed at
international forums.
Opportunities
The share of luxury products of disposable incomes is increasing across
all growing economies. This augurs well for the jewellery industry. The diamond
and jewellery industry is uniquely positioned in the luxury segment as the
products are classified not only as lifestyle products but also as high quality
investment avenues. The traditional markets such as
The opportunities with bridal jewellery and exciting new products have
shown immense potential in recent times. These segments will continue to grow
and realize higher profit margins in the
Threats
They are exposed to various threats including the ones related to
product, marketing, competition, economic downturns, financial risks and pricing.
They have established a wide supply base for the supply of rough diamonds and
have adequately hedged its purchase of gold and platinum.
They continue to promote the branded jewellery and retail products
through appropriate channels to sustain visibility, brand recall and premiums.
In order to sustain the competitive advantage, they continue the efforts on
technology and skill upgradations. The treasury team has taken adequate
measures to hedge against the currency fluctuations.
Fixed Assets:
·
·
Building
·
Leasehold Improvements
·
Plant and Machinery
·
Electrical Installation
·
Office Equipments
·
Furniture and Fixture
·
Vehicles
·
Computer Software
·
Trade Mark
As per website
Business Model
The goal is to manufacture and market high quality diamond products that
excite and attract consumers. They believe the best way of creating value is
through a fully integrated business model, benefiting from efficiency gains and
better product control.
Diamond and
jewellery manufacturing
They create products that consumers value for their inspirational design
and uncompromising quality. They are committed to improving processes,
continuously investing in the best technology and developing an expert workforce.
This means they can manufacture the highest quality polished diamond and
jewellery products whilst creating costs advantages.
They employ talented and seasoned product design teams in each of the main
consumer markets. These teams use their deep understanding of local consumer
needs and analysis developing trends to create fresh, creative designs.
Distribution
They distribute the loose polished diamonds and diamond jewellery
products to all the major global consumer markets. Having a global balance of
sales reduces the exposure to any one market, and gives them flexibility to
capture opportunities as demand changes.
They have a network of sales offices around the world. Each local office has an
intimate knowledge of its market needs, and strives to offer the best possible
service to its customers
Marketing
Diamond jewellery holds a special place in the hearts and minds of
consumers. It is often purchased to celebrate a precious relationship, or mark
an important occasion. They recognise that connecting with these emotional
needs and motivations through effective marketing is just as important as
creating great products.
They run high‐impact branding programmes to support a large and
growing proportion of the products. They have 14 distinct brands, each focused
on meeting the needs of a target consumer segment.
Retailing
In 2003, they added retailing operations to the Group. This completed
the pipeline integration, giving them a direct route to take diamonds right
through to the consumer.
They have concentrated the retail operations on the emerging markets of
Team:
BOARD OF DIRECTORS
Shri. Shreyas K.
Doshi. (CMD)
Shri. Shreyas K. Doshi, aged 59 has been with the organization for more
than 40 years. He is one of the most dynamic youngsters who have transformed the
Indian Diamond Industry and the youngest Chairman of the Gem and Jewellery
Council at the age of 31. He alongwith his father Shri Kirtilal K. Doshi,
Chairman Emeritus of the Company were the first to introduce the laser
technology in diamond cutting in
Shri. Vishal S Doshi.
(Group Executive Director)
Shri Vishal S. Doshi, aged 31 is a member of Board since 2007. He has
been instrumental in the launch of number of successful diamond jewellery
brands in
Shri. Nihar
Parikh. (Executive Director)
Shri Nihar N. Parikh, aged 43 has joined of the Company in 1992 as
Vice-President of the Jewellery Division at SEEPZ and was promoted as an
Executive Director of the Company w.e.f. 27th April, 1999. He is a driving
force behind the jewellery division of the Company. He is an expert in
jewellery manufacturing. Under his guidance the Jewellery Division has
progressed and contributed to the overall profits of the Company. He travels
extensively in quest of latest technology and designs. He has developed some
excellent business relations abroad.
Shri. Badrinarayan
R. Barwale.
Dr. Badrinarayan R. Barwale, aged 78 is the Chairman of Maharashtra
Hybrid Seeds Company Limited He is a winner of World Food Prize, which is
comparable to Nobel Prize in agriculture. He has also received “Padma Bhushan”
award from the President of India. Shri B. R. Barwale is on the Boards of
several reputed companies.
Shri. S. S.
Thakur.
Shri S. S. Thakur, aged 80 is a well known banking professional and has
held important positions in his long professional career in the field of
banking and foreign exchange. He was the Controller of Foreign Exchange of
Reserve Bank of
Shri. Minoo
Shroff.
Shri Minoo R. Shroff, aged 82 is a Fellow of the Institute of Management
Accountants (U.K.), Fellow member of the
Dr. S A Dave.
Dr. Surendra A. Dave, aged 73 is a doctorate of Economics and holds a
master degree in economics from the
Shri. Suresh N.
Talwar.
Shri Suresh N. Talwar, aged 73 is an eminent solicitor and advocate.
Currently he is a partner of M/s Talwar Thakore and Associates. He retired as a
Senior Partner of M/s. Crawford Bayley and Company w.e.f. 1st April, 2006. He
is a legal counsel to numerous Indian companies, multinational corporations and
Indian and foreign banks. He is on the Board of many leading companies such as
Larsen and Toubro Limited, Blue Star Limited, Merck Limited, Biocon Limited,
Birla Sun Life Insurance Company Limited, Cadbury India Limited, etc.
Shri. Keki M
Mistry.
Shri Keki M. Mistry, aged 56 is a Bachelor
of Commerce degree in Advanced Accountancy and Auditing and is also a Chartered
Accountant. Shri. Mistry is also a member of the Michigan Association of
Certified Public Accountants,
Leadership
The goal is to manufacture and market high
quality diamond products that excite and attract consumers. They believe the
best way of creating value is through a fully integrated business model,
benefiting from efficiency gains and better product control.
The leaders of the company are motivated not only by business success, but by a
commitment to the industry and wider community.
Kirtilal Doshi, Chairman Emeritus. Kirtilal has worked at Shrenuj and
Companysince 1982 and brings 64 years of industry experience to the Group. He
was a founding member of the Gems and Jewellery Export Promotion Council,
serving on its committee for 17 years, including one as Chairman. He was also
inducted to GIA League of Honor in 2005.
Shreyas Doshi,Chairman and Managing Director. Shreyas has worked at Shrenuj and
Companysince 1985, and brings 39 years of industry experience to the Group. He
was awarded the Lifetime Contribution Award by the International Colored
Gemstone Association, and inducted to GIA League of Honor. In 2005, Shreyas was
appointed Honorary Consul for
Vishal Doshi, Group Executive Director. Vishal has worked at Shrenuj and
Companysince 2001, President from Marketing Director for the polished diamond
division. He was appointed to the Board in
2007. In 2008 Vishal was appointed Honorary Consul for
Awards
The jewellery design and production expertise has been regularly
commended by leading industry bodies.
They have received several significant awards, some of which are illustrated
here.
- 2009
- 2008 JCK
Jewellers Choice Award
- 2007 HRD
Award
- 2000 De Beers
Diamonds International Award
- 1998 De Beers
Diamonds International Award
UNAUDITED
STANDALONE FINANCIAL RESULTS (PROVISIONAL)
FOR THE QUARTER
ENDED 31ST DECEMBER, 2010
(Rs. in Millions)
|
Particulars |
Third Quarter
Ended |
Nine Months
Ended |
|
|
31.12.2010 |
31.12.2010 |
|
1 (a) Net Sales/ Income from Operations |
5232.262 |
11332.666 |
|
(b) Other Operating Income |
-- |
-- |
|
Total |
5232.262 |
11332.666 |
|
2. Expenditure |
|
|
|
a) Increase/ Decrease in stock in trade and
work in progress |
1502.458 |
[46.070] |
|
b) Consumption of Raw Materials |
2920.212 |
9079.690 |
|
c) Purchase of Traded Goods |
202.232 |
644.415 |
|
d) Employee Cost |
85.003 |
242.239 |
|
e) Depreciation |
15.696 |
45.757 |
|
f) Other Expenditure |
202.418 |
570.351 |
|
g) Total |
4928.018 |
10536.382 |
|
3. Profit from operations before other
income, Interest and Exceptional Item (1-2) |
304.243 |
796.284 |
|
4. Other Income |
1.641 |
7.138 |
|
5.Profit before Interest and Exceptional
Items (3+4) |
305.884 |
803.422 |
|
6. Finance Cost |
206.531 |
514.572 |
|
7. Profit After Interest but before
exceptional items (5-6) |
99.353 |
288.850 |
|
8. Exceptional Items |
-- |
-- |
|
9. Profit/ Loss from ordinary Activities
before tax (7+8) |
99.353 |
288.850 |
|
10. Tax Expenses |
|
|
|
a) Provision for Taxation |
24.300 |
72.100 |
|
b) Deferred Tax Liability |
0.500 |
1.000 |
|
11. Net Profit/ Loss from ordinary
Activities after tax (9-10) |
74.553 |
215.750 |
|
12. Extraordinary item (net of tax expenses
Rs.) |
-- |
-- |
|
13. Net Profit/ Loss fro the period (11-12) |
74.553 |
215.750 |
|
14. Paid-up Equity Shares Capital (Face Value of Rs. 2/- each) |
151.970 |
151.970 |
|
15. Reserves excluding Revaluation Reserve
as per balance sheet of previous accounting year) |
-- |
-- |
|
16. Earning per share (EPS) |
|
|
|
a) Basic and Diluted EPS before
Extraordinary items for the year to date and for the previous year. (not to
be annualized) |
0.91 |
2.86 |
|
b) Basic and Diluted EPS after Extraordinary
items for the period, for the year to date and for the previous year
(including to be annualized) |
0.91 |
2.86 |
|
17. Public shareholding |
|
|
|
- Number of Shares |
28761516 |
28761516 |
|
- Percentage of shareholding |
37.85 |
37.85 |
|
18. Promoters and promoter group
shareholding |
|
|
|
a) Pledged/ Encumbered |
|
|
|
- Number of shares |
10000000 |
10000000 |
|
- Percentage of Share (as a % of the total
shareholding of promoter and promoter group) |
21.18 |
21.18 |
|
- Percentage of share (as a % of the total
share capital of the company) |
13.16 |
13.16 |
|
b) Non-encumbered |
|
|
|
- Number of shares |
37223479 |
37223479 |
|
- Percentage of Share (as a % of the total
shareholding of promoter and promoter group) |
78.82 |
78.82 |
|
- Percentage of share (as a % of the total
share capital of the company) |
48.99 |
48.900 |
Notes:
- The above results were reviewed by the Audit Committee and subsequently
approved by the Board of their respective meetings held on 10th
February 2011.
- The company has applied hedge accounting principles in respect of
forward exchange contracts as set out in Accounting standard As 30-
Financial Instruments, Recognition and Measurement issued by the Institute
of Chartered Accountants of India Accordingly, contracts as on 31st
December, 2010 are Market to Market and a notional gain aggregating to Rs.
18.258 Millions (Rs. 2.844 Millions as at 31st December 2009)
arising on contracts that were designated as effective hedges of future
cash flows, has been directly reflected in the reserves.
- In compliance with caluse 41 of the Listing Agreement with the Stock
exchanges a limited review of the unaudited financial results of Shrenuj
and Company limited (standalone) has been carried out by the statutory
auditors.
- The scheme of amalgamation of Shrenuj Diajewels Limited and Shrenuj
Gems and Jewellerry Limited with the company w.e.f. 1st April,
2010 (the appointed date) has been approved by the Hon’ble High Court of
Judicature at
- The assets and liabilities of the transferor companies are taken
over at fair value and excess of fair value of assets over liabilities amounting
to Rs. 538.543 Millions has been credited to the Amalgamation Reserve. As
per the scheme. Some of the fixed assets of the transferee company have
also been revailed and an amount of Rs. 1351.114 Millions ins credited to
Revaluation Reserve.
- Consequent to the above there is an additional charge for
depreciation of Rs. 17.172 Millions for the nine months ended 31st
December 2010 and an amount of Rs. 11.713 Million and an amount of Rs.
5.459 Millions has been withdrawn for the Revaluation Reserve and Amalgamation
Reserve respectively. This has no impact the profit for the period.
- The amounts for the period ended 31st December 2010 are
strictly not comparable with the corresponding previous period amounts.
- 6022525 Equity Shares of Rs. 2/- each were allotted to the lenders
of Unsecured loans at a price of Rs. 46.33 per share on conversion of the
said loans into equity.
- The Company has opted to publish only consolidated financial
results. The standalone results of the company will be available on the
company’s website: www.shrenuj.com
- There were no investor complaints pending at the beginning of the
quarter. Thirteen complaints received during the quarter were resolved.
There are no complaints remaining unresolved at the end of the quarter.
- Previous year’s quarter’s figure are re-grouped wherever necessary.
PRESS RELEASE:
Shrenuj Highlights
Company : Shrenuj and Company Limited
Sector : Diamonds,
Jewellery, RetaiL
Mkt Cap : Rs.
259.96 crs as on
Shrenuj Sparkles: Announces 58% rise in PAT despite
economic slowdown
Highlights:
Shrenuj posts a PAT of Rs. 131.200 Millions in Q1, 2009.
Additional 34% shares acquired in Intergems (H.K.) Limited (
100% Equity Holding of Alija International Pty. Limited (
100% equity holding of Global Marine Development Company (USA) acquired
during the quarter.
Profile
Shrenuj and Company Limited, presently spearheaded by Shreyas Doshi,
Vice Chairman and Managing Director and Vishal S Doshi, Group Executive
Director ; is an integrated gem and jewellery conglomerate with presence in 13
countries and a workforce of over 3,000 employees worldwide. 2008 marks 102
years of Shrenuj’s entry into the Diamond Business. Shrenuj has activities
ranging from diamond processing, jewellery manufacturing to branding and
retailing. Shrenuj Group’s state-of-the-art diamond manufacturing facilities in
Shrenuj’s international distribution model complements its international
manufacturing platform. Its 15 ofices worldwide cater to all parts of the
world. The Company has entered into JVs in
Shrenuj is a recipient of many national and international awards. The Company’s
jewellery division has won the De Beers India jewellery design contest for the
best design, the Indian National Design Contest and the prestigious Diamonds
International Award organized by DeBeers for the best jewellery designed.
In recent years, Shrenuj’s jewellery has won the 2007 HRD Award and 2008
JCK Jeweler’s Choice Award.
Brand Strategy
An active player in mass marketing since 2001 with brand presence in
over 9 countries, Shrenuj has effectively used B2B and B2C in its Brand
strategy. Shrenuj has developed many successful international diamond jewellery
brands, such as Arisia, Sveni and Bhavya (India and middle East), Valina and
Caro 74 (USA), Fiana (France), Scintilla88 and MasterCut (Australia) and
Amante88 (Hong Kong).
Shrenuj’s retail strategy focuses on leveraging the potential in high growth
developing markets in
Future Plans
The Company is piloting an automation project in diamond manufacturing
A new 30,000 sq ft standalone unit in Seepz will ensure full steam
production from October 2008
The management targets US $ 1 billion in sales by FY2012
Plans to expand retail operations in
Financials
The Company posted a PAT of Rs. 131.200 Millions in Q1, 2009, a hop of 58.5%
from Rs. 82.800 Millions in the previous fiscal. Consolidated Revenues for the
same period stand at Rs. 3388.200 Millions, an 18.5% growth over Rs. 2859.000 Millions
in the last fiscal.
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON DESIGNATED
PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions involving
their assets have been blocked or convicted, found guilty or against whom a
judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.45.38 |
|
|
1 |
Rs.73.08 |
|
Euro |
1 |
Rs.61.60 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
6 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
6 |
|
--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 |
NO |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
58 |
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 |
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 |
|
- |
NB |
New Business |
- |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.