MIRA INFORM REPORT

 

 

Report Date :

27.04.2012

 

IDENTIFICATION DETAILS

 

Name :

SHRENUJ DMCC

 

 

Registered Office :

41 D Al Mas Tower, Jumeirah Lakes Towers, Sheikh Zayed Road, P O Box 120485, Dubai

 

 

Country :

United Arab Emirates 

 

 

Financials (as on) :

31.12.2011

 

 

Date of Incorporation :

24.07.2005

 

 

Legal Form :

Limited Liability Company

 

 

Line of Business :

Traders of cut diamonds and jewellery

 

 

No. of Employees :

15

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

 

Status :

Satisfactory

 

 

Payment Behaviour :

Usually Correct 

 

 

Litigation :

Clear

 

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 – March 31st, 2012

 

Country Name

Previous Rating

(31.12.2011)

Current Rating

(31.03.2012)

United Arab Emirates 

A2

A2

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

SUMMARY

 

Company Name                         : SHRENUJ DMCC

Country of Origin                                    : Dubai, United Arab Emirates

Legal Form                                            : Limited Liability Company

Registration Date                                   : 24th July 2005

Trade Licence Number                            : 30243, DMCC

Issued Capital                                        : UAE Dh 300,000

Paid up Capital                                      : UAE Dh 300,000

Total Workforce                                     : 15

Activities                                               : Traders of cut diamonds and jewellery.

Financial Condition                                 : Good

Payments                                             : Nothing detrimental uncovered

Operating Trend                         : Steady

 

 

 

COMPANY NAME

 

SHRENUJ DMCC

 

 

company ADDRESS

 

Registered & Physical Address

Building             : 41 D Al Mas Tower, Jumeirah Lakes Towers

Street               : Sheikh Zayed Road

PO Box             : 120485

Town                 : Dubai

Country             : United Arab Emirates

Telephone         : (971-4) 2259552 / 2295683

Facsimile          : (971-4) 2295684

Email                : shrenujdmcc@shrenuj.com / smitkothari@shrenuj.com

 

Please note that subject’s previous address was, Gold Land Building, 1st Floor, Suite 106, Al Daghaya, Deira, Dubai.

 

Premises

Subject operates from a small suite of offices that are rented and located in the Central Business Area of Dubai.

 

 

KEY PRINCIPALS

 

     Name                                                                                              Position

·       Smit Kothari                                                                                     General Manager

·       Arapit Shah                                                                                      Finance Manager

 

 

LEGAL FORM & OWNERS

 

Date of Establishment  : 24th July 2005

 

Legal Form                  : Limited Liability Company

 

Trade Licence No.       : 30243, DMCC

 

Issued Capital              : UAE Dh 300,000

 

Paid up Capital            : UAE Dh 300,000

 

Name of Shareholder (s)                                              Percentage

 

·       Shrenuj & Co                                                                100%

405 Dharam Palace, 100 - 103 N. S. Patkar Marg

Mumbai - 400 007

     India

     Tel: (91-22) 66373500

     Fax: (91-22) 23632982

 

 

AFFILIATED COMPANIES

 

Subject is a member of the Shrenuj Group of Companies, which includes the following concerns:

 

     Name                                                                      Country Incorporated

 

·       Alija International Pty Ltd                                           Australia

 

·       Shrenuj NV                                                               Belgium

 

·       Shrenuj (Shanghai) Diamond Co. Ltd                           China

 

·       Jomard SAS (JV)                                                      France

 

·       Shrenuj GmbH                                                          Germany

 

·       Inter-gems (HK) Limited                                             Hong Kong

 

·       SWA Trading Company (JV)                                       Israel

 

·       Copem & Shrenuj (JV)                                               Italy

 

·       Shrenuj Japan Corporation                                         Japan

 

·       Shrenuj USA                                                             United States of America

 

 

OPERATIONS

 

Activities: Engaged as traders of cut diamonds and jewellery.

 

Import Countries: India and Europe

 

Operating Trend: Steady

 

Subject has a workforce of 15 employees.

 

 

FINANCIAL DATA

 

Financial highlights provided by local sources are given below:

 

Currency: United States Dollars (US$) & Indian Rupees (INR)

 

Balance Sheet                                                 31/12/11            31/12/10              31/12/11            31/12/10

 

                                                                           US$                   US$                    INR                   INR

ASSETS

Non-current assets

Property plant and equipment                              3,767,151          3,672,077          168,014,935      163,774,634

Capital work in progress                                     219,493             50,311              9,789,388          2,243,871

Investments                                                       865,000             865,000             38,579,000        38,579,000

4,851,644          4,587,388          216,383,323      204,597,505

Current assets

Inventories                                                         14,906,810        8,716,568          664,843,726      388,758,933

Trade and other receivables                                 50,783,484        45,462,691        2,264,943,386    2,027,636,019

Prepayments                                                     105,083             44,882              4,686,702          2,001,737

Due from related parties                          5,220,191          2,300,191          232,820,519      102,588,519

Cash and bank balances                                    1,100,440          2,346,142          49,079,624        104,637,932

72,116,008        58,870,474        3,216,373,957    2,625,623,140

TOTAL ASSETS                                                76,967,652        63,457,862        3,432,757,280    2,830,220,645

 

EQUITY AND LIABILITIES

Equity

Share capital                                                     3,054,496          3,054,496          136,230,522      136,230,522

Accumulated profits                                           17,809,663        12,503,545        794,310,970      557,658,107

Total equity                                                       20,864,159        15,558,041        930,541,492      693,888,629

Non-current liabilities                                          5,684,114          44,203             253,511,484      1,971,454

Current liabilities

Trade and other payables                                    36,089,051        31,863,339        1,609,571,675    1,421,104,919

Due to related parties                                         1,333,400          1,333,400          59,469,640        59,469,640

Bank borrowings                                                12,996,928        14,658,879        579,662,989      653,786,003

50,419,379        47,855,618        2,248,704,304    2,134,360,562

TOTAL EQUITY AND LIABILITIES                       76,967,652        63,457,862        3,432,757,280    2,830,220,645

 

Statement of Income

 

Revenue                                                            91,006,597        66,196,383        4,058,894,226    2,952,358,682

Cost of sales                                                     (83,139,989)      (61,140,783)      (3,708,043,509) (2,726,878,922)

Gross profit                                                       7,866,608          5,055,600          350,850,717      225,479,760

Other income                                                     51,152              38,875              2,281,379          1,733,825

Expenses                                                          (1,677,133)        (1,313,282)        (74,800,132)      (58,572,377)

Profit from operations                                         6,240,627          3,781,193          278,331,964      168,641,208

Interest income from bank                                   2,808                518,881             125,237             23,142,093

Finance cost                                                     (787,777)           (489,353)           (35,134,854)      (21,825,144)

Profit from operation after

finance cost                                                       5,455,658          3,810,721          243,322,347      169,958,157

Profit/(loss) on derivative instruments                   (149,540)           533,281             (6,669,484)        23,784,333

Net profit for the year                                          5,306,118          4,344,002          236,652,863      193,742,490

 

Local sources consider subject’s financial condition to be Good.

 

 

BANKERS

 

·       Habib Bank AG Zurich

Baniyas Road

PO Box: 3306

Dubai

Tel: (971-4) 2214535

 

 

PAYMENT HISTORY

 

No complaints regarding subject’s payments have been reported.

 

 

GENERAL COMMENTS

 

During the course of this investigation nothing detrimental was uncovered regarding the manner in which payment obligations are fulfilled. The operating history is clear and the financial situation is satisfactory. As such we are of the opinion that the subject is a fair trade risk.

 

 

 

 

DIAMOND INDUSTRY – INDIA

 

-          From time immemorial, India is well known in the world as the birthplace for diamonds.  It is difficult to trace the origin of diamonds but history says that in the remote past, diamonds were mined only in India. Diamond production in India can be traced back to almost 8th Century B.C.  India, in fact, remained undisputed leader till 18th Century when Brazilian fields were discovered in 1725 followed by emergence of S. Africa, Russia and Australia.

-          The achievement of the Indian diamond industry was possible only due to combination of the manufacturing skills of the Indian workforce and the untiring and unflagging efforts of the Indian diamantaires, supported by progressive Government policies.

-          The area of study of family owned diamond businesses derives its importance from the huge conglomerate of family run organizations which operate in the diamond industry since many generations.

-          Some of the basic traits of family run business enterprises include spirit of entrepreneurship, mutual trust lowers transaction costs, small, nimble and quick to react, information as a source of advantage and philanthropy.

-          Family owned diamond businesses need to improve on many fronts including higher standard of corporate governance, long-term performance – focused strategies, modern management and technology.

-          The diamond jewellery industry in India today may be more than Rs 60000 mil and is rated amongst the fastest growing  in the world. Indi ranks third in the world in domestic diamond consumption.

-          Utmost caution is to be exercised while dealing with some medium and large diamond traders which are usually engaged in fictitious import – export, inter-company transactions, financially assisted by banks. In the process, several public sector banks lost several hundred million rupees. They mostly diverted borrowed money for diamond business into real estate and capital markets.

-          Excerpts from Times of India dated 30th October 2010 is as under –

 

DIAMOND SAGA – DIRTY DOZEN STUCK WITH 2K CR DEBT

 

This could be the biggest credibility crisis the Indian diamond industry has ever faced. Fifteen banks run the risk of losing Rs 2000 crore lent to a dozen diamond firms in Surat. Until about two months ago, they had not repaid  these dues. Bankers believe many diamantaires borrowed money during the economic downturn two years ago and diverted funds to businesses like real estate and capital markets. Many of themselves made money from these businesses but their diamond companies have gone sick and declared insolvency.

-          Most of the money borrowed from the banks in the name of their diamond business has been diverted in real estate and the share market. The banks are not in a position to seize their properties because in many cases, these were purchased in the name of their relatives and friends.

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.52.57

UK Pound

1

Rs.85.03

Euro

1

Rs.69.56

 

 

INFORMATION DETAILS

 

Report Prepared by :

MNL

 

 

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 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%)

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.