MIRA
INFORM REPORT
|
Report Date : |
05.03.2012 |
IDENTIFICATION DETAILS
|
Name : |
SHRENUJ AND COMPANY LIMITED |
|
|
|
|
Registered
Office : |
405, Dharam Palace, 100-103, N S Patkar Marg, Mumbai- 400007,
Maharashtra |
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Country : |
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|
|
|
Financials (as
on) : |
31.03.2011 |
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|
|
|
Date of
Incorporation : |
13.04.1982 |
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Com. Reg. No.: |
11-026903 |
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|
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Capital
Investment / Paid-up Capital : |
Rs.151.970 Millions |
|
|
|
|
CIN No.: [Company Identification
No.] |
L99999MH1982PLC026903 |
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|
|
|
TAN No.: [Tax Deduction &
Collection Account No.] |
MUMS38907B |
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|
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PAN No.: [Permanent Account No.] |
AAACS0690P |
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Legal Form : |
A 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 |
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|
|
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No. of Employees
: |
2000 (Approximately) |
RATING & COMMENTS
|
MIRA’s Rating : |
A (58) |
|
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 |
|
Maximum Credit Limit : |
USD 19000000 |
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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 – September 30, 2011
|
Country Name |
Previous Rating (30.06.2011) |
Current Rating (30.09.2011) |
|
|
A1 |
A1 |
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|
|
|
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
Off-credit |
D |
LOCATIONS
|
Registered/ Corporate Office : |
405, Dharam Palace 100-103 N S Patkar Marg, Mumbai- 400007,
Maharashtra, India |
|
Tel. No.: |
91-22-56373500 |
|
Fax No.: |
91-22-23632982 |
|
E-Mail : |
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|
Jewellery Division |
G-21, Gem and Jewellery Complex – II, Seepz Andheri (East), Mumbai –
400 096, India |
|
Tel. No.: |
91-22-56946210/ 66946100 |
|
Fax: |
91-22-56946161 |
|
Email: |
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Overseas Offices : |
Located at: ·
·
Joliese ·
·
·
·
China ·
India ·
·
·
UAE ·
Germany ·
·
Israel ·
Hong Kong |
DIRECTORS
(AS ON 31.03.2011)
|
Name : |
Mr. Kirtilal K Doshi |
|
Designation : |
Chairman Emeritus |
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|
|
|
Name : |
Mr. Shreyas K Doshi |
|
Designation : |
Chairman and Managing Director |
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|
Name : |
Mr. Vishal S Doshi |
|
Designation : |
Group Executive Director |
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|
Name : |
Mr. Nihar N Parikh |
|
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 |
|
Designation : |
Independent Director |
KEY EXECUTIVES
|
Name : |
Mr. Sanjay M Abhyankar |
|
Designation : |
Company Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
(AS ON 31.12.2011)
|
Category |
No. of Shares |
Percentage of
Holding |
|
|
|
|
|
(A) Shareholding
of Promoter and Promoter Group |
|
|
|
|
|
|
|
|
32,438,941 |
42.64 |
|
|
15,189,774 |
19.97 |
|
|
47,628,715 |
62.61 |
|
|
|
|
|
|
|
|
|
Total
shareholding of Promoter and Promoter Group (A) |
47,628,715 |
62.61 |
|
|
|
|
|
(B) Public
Shareholding |
|
|
|
|
|
|
|
|
24,750 |
0.03 |
|
|
5,089,295 |
6.69 |
|
|
426,000 |
0.56 |
|
|
2,000 |
- |
|
|
2,000 |
- |
|
|
5,542,045 |
7.29 |
|
|
|
|
|
|
|
|
|
|
6,810,455 |
8.95 |
|
|
|
|
|
|
|
|
|
|
7,665,910 |
10.08 |
|
|
4,167,574 |
5.48 |
|
|
4,253,346 |
5.59 |
|
|
1,428,078 |
1.88 |
|
|
1,682,706 |
2.21 |
|
|
19,600 |
0.03 |
|
|
1,122,962 |
1.48 |
|
|
22,897,285 |
30.10 |
|
|
|
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|
Total Public
shareholding (B) |
28,439,330 |
37.39 |
|
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|
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Total (A)+(B) |
76,068,045 |
100.00 |
|
|
|
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(C) Shares held
by Custodians and against which Depository Receipts have been issued |
- |
- |
|
|
- |
- |
|
|
- |
- |
|
|
- |
- |
|
|
|
|
|
Total
(A)+(B)+(C) |
76,068,045 |
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 31.03.2011)
|
Particulars |
Unit |
Licensed Capacity |
Installed Capacity |
Actual Production |
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|
Diamonds |
Carts |
Not Applicable |
Not Applicable |
381677* |
|
Studded Jewellery |
Nos. |
Not Applicable |
Not Applicable |
417072 |
GENERAL INFORMATION
|
No. of Employees : |
2000 (Approximately) |
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Bankers : |
·
Bank of ·
Allahbad Bank ·
Export Import Bank of ·
ICICI Bank Limited ·
IDBI Bank Limited ·
Indusind Bank Limited ·
Karnataka Bank Limited ·
Punjab National Bank ·
Standard Chartered Bank ·
State Bank of ·
State Bank of ·
State Bank of ·
Syndicate Bank ·
The Royal Bank of Scotland N.V. ·
Union Bank of India ·
Yes Bank |
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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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Address : |
1311, Dalmal Towers, 211, Nariman Point, Mumbai – 400021, Maharashtra,
India |
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Solicitors : |
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|
Name : |
Talwar Thakore and Associated Advocated and Solicitors |
|
Address : |
3rd Floor, Kalpataru Heritage, 127 M G Road, Fort, Mumbai –
400001, Maharashtra, India |
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|
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|
Wholly Subsidiaries: |
·
Shrenuj Diajewels Limited ·
Shrenuj Gems and Jewellery Limited ·
Shrenuj Lifestyle Limited ·
Shrenuj Overseas Limited ·
Shrenuj DMCC ·
Shrenuj Japan Corporation ·
Shrenuj ( ·
Shrenuj Jewellery ( ·
Shrenuj ·
Shrenuj South ·
Shrenuj N.V. ·
Shrenuj GmbH ·
Shrenuj Australia Pty. Limited ·
Lume Group AG ·
Astral USA, INC. ·
Shrenuj ·
Astral Jewels LLC ·
Astral Holding INC ·
Alija International Pty Limited ·
Global Marine Diamonds Company · Ithemba Diamonds (Pty) Limited · Uxolo Diamond Cutting Works (Pty) Limited |
|
|
|
|
Subsidiaries: |
·
Simon Golub and Sons INC. ·
Daily Jewellery Limited ·
Intergems H.K. Limited ·
Shrenuj Shanghai Diamonds Private Limited ·
Bernies International, LLC |
|
|
|
|
Associates: |
·
Kiara Jewellery Private Limited ·
Arisia Jewellery Private Limited ·
Jomard SAS ·
SWA Trading Limited ·
Copem and Shrenuj ·
Trapz, LLC ·
SHL Gems and Jewellery Limited ·
K. K. Doshi and Company ·
Shrenuj Investments and Finance Private Limited |
CAPITAL STRUCTURE
(AS ON 10.08.2011)
Authorised Capital : Rs. 450.000 Millions
Issued, Subscribed & Paid-up Capital : Rs. 152.208
Millions
AS ON 31.03.2011
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
225000000 |
Equity Shares |
Rs.2/- each |
Rs.450.000 Millions |
|
|
|
|
|
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
75984995 |
Equity Shares |
Rs.2/- each |
Rs.151.970
Millions |
|
|
|
|
|
NOTES:
1) Of the above Equity shares:
a) 14122325 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 company has
granted Nil 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. During the year 639850 equity shares have
been allotted to eligible employees / Directors of the company and its subsidiaries
on exercise of options.
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
151.970 |
138.645 |
138.645 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
4697.426 |
2344.437 |
1842.477 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
4849.396 |
2483.082 |
1981.122 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
8601.692 |
7709.229 |
7792.507 |
|
|
2] Unsecured Loans |
631.825 |
284.823 |
1197.144 |
|
|
TOTAL BORROWING |
9233.517 |
7994.052 |
8989.651 |
|
|
DEFERRED TAX LIABILITIES |
82.960 |
61.847 |
61.147 |
|
|
|
|
|
|
|
|
TOTAL |
14165.873 |
10538.981 |
11031.920 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
2145.817 |
510.927 |
530.575 |
|
|
Capital work-in-progress |
367.578 |
73.738 |
72.072 |
|
|
|
|
|
|
|
|
INVESTMENT |
1164.267 |
1268.107 |
1260.001 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
8442.191
|
6089.400
|
6859.891 |
|
|
Sundry Debtors |
6752.039
|
5488.538
|
4832.788 |
|
|
Cash & Bank Balances |
396.005
|
457.826
|
907.872 |
|
|
Other Current Assets |
0.000
|
0.000
|
0.000 |
|
|
Loans & Advances |
1022.735
|
757.087
|
909.634 |
|
Total
Current Assets |
16612.970
|
12792.851
|
13510.185 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditor |
5900.496
|
3962.929
|
4202.996 |
|
|
Other Current Liabilities |
14.023
|
2.672
|
4.178 |
|
|
Provisions |
210.240
|
141.041
|
133.739 |
|
Total
Current Liabilities |
6124.759
|
4106.642
|
4340.913 |
|
|
Net Current Assets |
10488.211
|
8686.209
|
9169.272 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
14165.873 |
10538.981 |
11031.920 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
15542.097 |
10352.222 |
9113.661 |
|
|
|
Other Income |
8.973 |
12.873 |
6.296 |
|
|
|
TOTAL (A) |
15551.070 |
10365.095 |
9119.957 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Material Cost |
13223.915 |
8719.153 |
7453.237 |
|
|
|
Manufacturing and Other Expenses |
1167.834 |
615.820 |
768.773 |
|
|
|
TOTAL (B) |
14391.749 |
9334.973 |
8222.010 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
1159.321 |
1030.122 |
897.947 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
675.613 |
752.770 |
643.600 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
483.708 |
277.352 |
254.347 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
58.611 |
39.912 |
38.737 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
425.097 |
237.440 |
215.610 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
119.900 |
82.700 |
348.220 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-H) (I) |
305.197 |
154.740 |
132.610 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
618.043 |
523.558 |
430.145 |
|
|
|
|
|
|
|
|
|
|
Excess
Provision for Taxation written back |
0.000 |
0.335 |
-- |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Transfer to General Reserve |
35.000 |
20.000 |
10.000 |
|
|
|
Proposed Dividend |
45.729 |
34.809 |
24.956 |
|
|
|
Tax on Proposed Dividend |
7.420 |
5.781 |
4.241 |
|
|
BALANCE CARRIED
TO THE B/S |
835.091 |
618.043 |
523.558 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Export Earnings |
11660.560 |
7618.268 |
7538.302 |
|
|
TOTAL EARNINGS |
11660.560 |
7618.268 |
7538.302 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
8506.036 |
5755.057 |
6463.547 |
|
|
|
Stores & Spares |
7.464 |
2.277 |
60.005 |
|
|
|
Capital Goods |
14.461 |
10.178 |
6.606 |
|
|
TOTAL IMPORTS |
8527.961 |
5767.512 |
6530.158 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
|
|
|
|
|
|
- Basic and Diluted |
4.03 |
2.24 |
1.91 |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2011 |
30.09.2011 |
31.12.2011 |
|
Type |
1st
Quarter |
2nd
Quarter |
3rd
Quarter |
|
Net Sales |
4867.710 |
5327.860 |
5167.890 |
|
Total Expenditure |
4553.320 |
5010.950 |
4807.330 |
|
PBIDT (Excl OI) |
314.390 |
316.910 |
360.560 |
|
Other Income |
1.930 |
2.260 |
2.030 |
|
Operating Profit |
316.320 |
319.170 |
362.590 |
|
Interest |
156.070 |
192.200 |
255.200 |
|
Exceptional Items |
0.000 |
0.000 |
0.000 |
|
PBDT |
160.250 |
126.970 |
107.390 |
|
Depreciation |
15.600 |
15.950 |
16.330 |
|
Profit Before Tax |
144.650 |
111.020 |
91.060 |
|
Tax |
43.200 |
29.010 |
13.490 |
|
Provisions and contingencies |
0.000 |
0.000 |
0.000 |
|
Profit After Tax |
101.450 |
82.010 |
77.570 |
|
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 |
101.450 |
82.010 |
77.570 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
PAT / Total Income |
(%) |
1.96
|
1.49
|
1.45 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
2.74
|
2.29
|
2.37 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
2.27
|
1.78
|
1.54 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.09
|
0.10
|
0.11 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
3.17
|
4.87
|
6.73 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
2.71
|
3.12
|
3.11 |
LOCAL AGENCY FURTHER INFORMATION
OPERATIONAL:
The Company’s
performance was satisfactory with sales increasing to Rs.15542.097 Millions
from Rs.10352.222 Millions and Net Profit growing to Rs.305.197 Millions from Rs.155.075
Millions previous year. The results of the current year include figures of
amalgamating companies and are therefore, to that extent, not comparable with
those of previous year.
The Company
strengthened several organizational processes across a wide range of functions
with a view to enhancing its business capabilities. It continues to deliver
strong overall performance this year and its growth plans continue to remain on
track.
Revenues from
retail and branded jewellery operations have recorded an impressive 82% growth
in FY 2010-11, rising to Rs.1595.100 Millions (Rs.876.070 Millions last year).
The Company's focus on retail and branding operations is delivering the desired
results. The Company has 114 points of sales in 26 cities across India, reaching
over 85% of the target consumer segment. The Company's retail ventures ‘Diti’
in India and "Joliesse" in Hong Kong continue to record impressive
growth.
The consolidated
sales revenue increased by 30% to Rs.24565.152 Millions (Rs.18899.587 Millions).
Net profit registered a gain of 12% to Rs.568.447 Millions (Rs.507.749
Millions). EPS for the period (Basic and Diluted) stood at Rs. 7.50 (Rs.7.32)
per share (face value of Rs.2/-).
PROSPECTS:
Shrenuj Botswana
(Pty.) Limited, a step-down subsidiary has commenced a new jewellery
manufacturing facility in Botswana, the very first in the country. This new
unit will not only contribute incremental revenue but also lead to improved
captive consumption of the high end diamonds produced within Botswana. This
unit will also gain from tax advantage enjoyed by Botswana based units for
export to the US markets. The Company is adding manpower to create additional
capacities that will support Diamond manufacturing operations in Botswana. In
addition to the normal bridal jewellery, we have developed a special brand
''ZANZOTH'' which will be first ''Made in Botswana'' brand. The Company will
also continue to improve the throughput of their existing units through
technological and skill upgradations.
The Company 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 Master Cut (Australia), and Amante88 (Hong
Kong). In addition, Shrenuj is a leading participant in DTC''s Forevermark
Programme in Japan and India and one of the authorised manufacturers of
Platinum Guild International. These
brands are managed independently by the company's marketing teams in each
country, backed by a strong downstream distribution worldwide. The Company now
intends to garner a larger share of the jewellery value chain pie and targets
to increase its presence in the higher end of the value chain, i.e. jeweler manufacturing and retailing.
The Company has
launched the new "Embrazo" Collection in US during the Christmas
Season and is now ready to unveil "Zanzoth" collection in near
future.
The Company has
recently acquired state of the art Sarin Galaxy 1000 diamond planning machines in
Mumbai and Botswana, the very first in their regions. The Company's focus on
technology upgradation has helped them remain at the forefront of product
quality and efficiencies in manufacturing operations. These machines will ramp
up the productivity and reduce tolerance to bare minimum level in diamond
operations.
The Company
expects to continue its growth momentum in an expanding global diamond and
jewellery market by organic and inorganic growth. Overall market sentiments
have improved and the consumer confidence indices in all the key markets are
showing positive growth.
MANAGEMENT
DISCUSSION AND ANALYSIS
MACRO-ECONOMIC OUTLOOK
Despite the continued after-effects of the economic crisis, the global economy continued to expand. After sharp deceleration in 2008 and contraction in 2009, global GDP is estimated to have grown by 3.9 percent in 2010, led by growing domestic demand in developing economies. However, macroeconomic problems and consequent volatility remained a dominant factor, and the recovery is expected to be slower with factors such as contagion in Euro zone, oil shocks resulting from political uncertainty in Middle-East and rising commodity prices impacting the recovery.
Amidst the churn emanating from global economic crisis, Indian economy registered a growth of 8.6% during fiscal 2010-11, with revival in agriculture output and sustained momentum in manufacturing. The impetus provided by stimulatory monetary and fiscal policies helped the economic recovery, with key indicators such as industrial production, consumer and business confidence and exports showing an uptrend. Fiscal deficit as percentage of GDP came down to 4.8% from 6.3% during the previous year. While inflation remains a key concern, with successive rounds of monetary tightening in recent past expected to impact growth, increased thrust on infrastructure projects, renewed buoyancy in exports and rebound in investment activity would help to sustain the growth momentum. Although global events, especially movement in commodity prices and crude oil, pose a concern, Indian economy is poised to sustain its growth momentum.
BUSINESS OVERVIEW: DIAMOND INDUSTRY
2010-11: Headwinds to recovery
After witnessing a pronounced contraction in 2009, the gems and jewellery demand recovered strongly in 2010. The year saw a forward ripple effect, with re-stocking of inventory in the value chain, evident from significant sales growth at cutting centers.
This process of supplies, with estimated rough supplies of USD 12.25 billion, there was a mismatch between supply of rough of 9.4%, resulting in a 27% price rise during the year. The parity between the demand for rough, polished and retail markets was restored to a significant extent, signifying a return of the market to normalcy.
During 2010, the demand for rough increased substantially, by 77%, almost back top re-recession levels. While we do not expect this pace of growth to sustain going forward, They expect a growth of 21.5% in 2011, majorly on the back of increasing prices rather than volumes.
The revival of demand
The great impetus to demand across the diamond chain came from the cutting centresupply of polished diamonds, registering an increase of 38% y-o-y, from USD 13.7 billionin 2009 to USD 18.9 billion in 2010, almost at pre-contraction levels. We expect thisdemand growth to continue going forward, albeit at a more sustainable, lower rate.
MINING OUTLOOK
In recent times, the depletion in mining reserves with no new major discoveries has led to a decelerating rate of growth of rough production. This trend continued in 2010, though rough diamond production from mines is estimated at 125 million carats (valued at USD 12billion approx.), as against 120 million carats in the crisis year of 2009 (valued at USD11.5 billion approx). The stocking of output by the Russian Government contributed to the widening supply-demand gap. We expect this gap to continue in near future, even after mines returning to full production levels. While the new mining development in Zimbabwe might have a marginal contribution to market supply, no other significant discoveries were reported during the year.
EMERGING TRENDS
The gap in rough diamond supply and consequent higher prices has led to an interesting trend, which we expect to pick-up in near term – recycling of diamonds. Development of this secondary market, especially in USA, has been prompted by socio-economic factors. As per industry estimates, the USD 20 billion polished imports in India in 2010 included USD 4-6 billion worth of recycled goods.
The rising prices and future expectations of the demand-supply gap have also catalyzeda revival in investment demand for diamonds. With attributes of being safe and discrete and higher values being easily transportable, diamonds as an investment opportunity in hard assets is uniquely poised.
The year 2010 witnessed a return of a semblance of normalcy to the diamond pipeline, with healthy growth across all 3 components of the value chain (rough, polished and retail) – in stark contrast to the crippling conditions faced by the industry in2009. While the recent price volatility and supply-demand forecasts pose a unique challenge, the industry has managed one of the severest crises in recent history really well, and the process of stabilization is expected to continue during 2011.
Industry Outlook: 2010-11
The Indian gems and jewellery industry witnessed strong performance, assisted by revival in global demand. Export of Gems and Jewellery during the year registered a gain of 46.6% over the previous year and stood at US$ 43.14 billion. This assumes importance in light of the fact that the industry contributes 16.67% to India’s total merchandise exports.
The export of cut and polished diamonds aggregated to US$ 28.25 billion, growing at81.6% over the previous year, signifying revival of demand in key markets of USA, Middle East, South East Asia and Europe and improved prices. The net export of rough diamonds was valued at US$ 1.08 billion, a growth of over 45%, as compared to a decline of 4.1% during FY 2009-10.
PRECIOUS METALS SCENARIO
Gold
The global demand for gold remained strong during the year, reaching a 10-year high of3812.2 tonnes, an increase of 9% year-on-year. In value terms, annual demand reached USD150 billion, an increase of 38%. The major drivers of this demand were robust jeweler demand, purchases by Central Banks and by individuals as a hedge against inflation. Inflationary pressures and currency fluctuations led to an upward pressure on demand. This surge in demand is despite an increase of 24.2% in average price of gold in last year.
Gold supply increased by 2% over 2009 to reach 4108 tonnes, across mine supply, Central Bank sales and supply from recycling.
Silver
The key drivers of demand for silver are jewellery, investments and industrial uses. Global demand for silver during 2010 was 1056.8 million ounces, as compared to 922.2million ounces in 2009, an increase of 14.6%. Silver prices rose by 78% from USD 14.67 per ounce in 2009 to USD 20.19 per ounce in 2010, primarily on the back of strong investment demand from Exchange Traded Funds (ETFs), over-the-counter market and physical bullion. Industrial demand for silver also increased by 20.7% over the previous year. The buoyancy in silver prices is expected to continue though at a subdued level.
Platinum
The global demand for platinum registered an increase of 16% in 2010 to 7.88 million ounces, the key triggers being demand from automotive and industrial sectors. In response, supplies of platinum increased by 0.6% to 6.06 million ounces. While overall platinum demand for jewellery declined by 14% to 2.42 million ounces in 2010, purchases by Chinese jewellery sector were robust. As a result of strong demand conditions, average annual platinum prices rose by 17%, an all-time high.
Jewellery Scenario
Global jewellery sector demonstrated a strong recovery during 2010, with a 17%year-on-year increase in demand, from 1760.3 tonnes in 2009 to 2059.6 tonnes in 2010.Annual average prices rose 26% and annual jewellery demand globally stood at USD 81 billion.
Asian consumers, especially China and India led this demand. Together, these two countries account for 51% of global jewellery and bullion (bars / coins) demand. India led the growth with demand increasing to reach 745.7 tonnes. While the value (rupee price) growth was 20%, volume growth stood at 69%, with resulting gold value demand at Rs. 1342billion. Apart from buoyant festival season demand around Diwali, the expectations of increasing gold prices also generated additional demand.
Global retail sales of diamond jewellery during 2010 were estimated at USD 60.17billion, with India accounting for USD 7.28 billion. It is estimated that diamond contenting global retail sales was over 30%, at USD 18.2 billion. While diamond jewellery had a38% share of jewellery retail sales in USA, for India and China this figure was at around10%, signifying the market potential.
RETAIL OUTLOOK
After two consecutive years of de-growth, retail demand witnessed a growth of 6.8%y-o-y (in USD value). While still below the 12.7% growth achieved in 2007, the recovery is significant. While USA, the largest diamond market registered a steady 7% growth, fast growing markets notably India and China, reported a growth of 37% and 26% respectively.
OPERATIONAL PERFORMANCE:
With continued emphasis on leveraging the Company’s strengths in designing and producing quality products, strong commitments to consumer satisfaction and its global market presence, the management was able to participate in the buoyant markets and registered strong operating performance during the year. The Company was well positioned to benefit from the revival of demand and its focus on serving the entire value chain in its business segments. This reflected in a 30% increase in the consolidated sales revenue during 2010-11, to Rs. 24565.152 Millions (Rs.18899.587 Millions). The focus on top-line growth, coupled with continued initiatives to leverage operating efficiencies and controlling costs, resulted in a 7.7% increase in EBIDTA to Rs.1688.016 Millions (Rs. 1567.172 Millions) on a consolidated basis.
During the period, sales revenue on stand-alone basis grew to Rs.15542.097 Millions (Rs.10352.222 Millions). EBIDTA for the period stood at Rs.1159.321 Millions (Rs.1030.123 Millions).
With the stated objectives of being present and leveraging opportunities across the entire value chain, the expansion of domestic retail business continued during the year. The Company’s retail brand "Diti", continued to expand, with 114 points of sale pan-India currently. The management plans to increase this presence to 150 stores by financial year 2011-12. International branded jewellery collections of Shrenuj were well received and also contributed to the positive operating margins.
Compliance with the Best Practices in the industry
The Company remains committed to adhering to and adapting to global best practices, statutory as well as voluntary. As a DTC Supplier of Choice, the Company follows the Best Practices Principles (BPP) Guidelines of De Beers and Forever mark, including but not limited to periodic third party audit of their systems and procedures by internationally accredited independent agencies. It also follows the World Diamond Council’s System of Warranties for polished diamonds and studded jewellery.
The Company does not buy diamonds from any sources involved in conflict, terrorism and illicit trade activity. The diamond procurement is always from verifiable sources, not engaged in money laundering activity. The Company follows the Kimberly Process Certification norms in this regard, for all its imports and exports of diamonds. The Company also undertakes scheduled internal audits to track its products through the operating value chain.
The Company has built a team of qualified professionals to ensure complete compliance with statutory norms and adoption of international best practices. Also, systems and procedures have been developed and installed to ensure the same.
COMMITMENT
The Company continues to remain an equal opportunity employer and does not discriminate between employees on the basis of caste, religion, sex, color or creed, and ensures the health and welfare of all its employees by providing a safe and healthy working environment. They recognize that human capital is vital to the long term business sustainability and accordingly, have adopted employee selection and performance appraisal criteria based on objectivity and merit.
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 India. The management accepts responsibility for the integrity and objectivity of these financial statements, as well as for various estimates and judgments used therein. The estimates and judgments relating to the financial statements have been made on a prudent and reasonable basis, in order that the financial statements reflect in a true and fair manner the form and substance of the transactions, and reasonably present the Company’s state of affairs, profits and cash flows.
RESULTS
The robust performance of the Company during the year reflected the strong management bandwidth, evolving sustainable business strategy and ability to respond to the evolving market dynamics. The stand-alone sales revenue increased from Rs. 10352.222 Millions to Rs.15542.097 Millions in 2010-11, a growth of 50%. In line with the top line growth, net profit after tax registered a growth of 97%. The consolidated sales revenue increased toRs.24565.152 Millions (Rs.18899.587 Millions) a gain of 30%. Consolidated net profit after tax stood at Rs. 568.447 Millions, 12% over the previous year. The strong performance resulted in basic EPS (consolidated) increasing to Rs.7.50 from Rs.7.32.
OUTLOOK
While the global recovery is yet patchy, outlook for consumer demand remains positive, on the back of strong retail confidence and demand growth, especially in emerging economies. With various government efforts and incentives coupled with private sector initiatives, they expect Indian gems and jewellery sector to grow at a CAGR of around 13% during 2011– 2013. While increasing gold prices and rising inflation could be factors to watch, consumer demand is expected to continue its momentum.
UNAUDITED
STANDALONE FINANCIAL RESULTS (PROVISIONAL)
FOR THE QUARTER
ENDED 31ST DECEMBER, 2011
(RS. IN MILLIONS)
|
Particulars |
Quarter Ended on
|
Nine Months
Ended |
|
|
|
31.12.2011 |
30.09.2011 |
31.12.2011 |
|
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
|
|
|
|
|
|
1 (a) Net Sales/ Income from Operations |
5167.886 |
5327.856 |
15363.450 |
|
(b) Other Operating Income |
-- |
-- |
-- |
|
Total |
5167.886 |
5327.856 |
15363.450 |
|
|
|
|
|
|
2. Expenditure |
|
|
|
|
a) Increase/ Decrease in stock in trade and
work in progress |
(798.508) |
(122.833) |
(963.020) |
|
b) Consumption of Raw Materials |
5031.609 |
4509.089 |
13438.517 |
|
c) Purchase of Traded Goods |
271.467 |
377.816 |
1032.818 |
|
d) Employee Cost |
90.395 |
91.820 |
270.123 |
|
e) Depreciation |
16.332 |
15.953 |
47.882 |
|
f) Other Expenditure |
212.360 |
155.060 |
593.162 |
|
g) Total |
4823.655 |
5026.906 |
14419.481 |
|
|
|
|
|
|
3. Profit from operations before other
income, Interest and Exceptional Item (1-2) |
344.231 |
300.950 |
943.969 |
|
4. Other Income |
2.031 |
2.262 |
6.218 |
|
5.Profit before Interest and Exceptional
Items (3+4) |
346.262 |
303.213 |
950.187 |
|
6. Interests |
255.204 |
192.196 |
603.467 |
|
7. Profit After Interest but before
exceptional items (5-6) |
91.058 |
111.016 |
346.720 |
|
8. Exceptional Items |
-- |
-- |
-- |
|
9. Profit/ Loss from ordinary Activities
before tax (7+8) |
91.058 |
111.016 |
346.720 |
|
|
|
|
|
|
10. Tax Expenses |
|
|
|
|
a) Provision for Taxation |
13.489 |
29.011 |
84.700 |
|
b) Deferred Tax Liability |
-- |
-- |
1.000 |
|
|
|
|
|
|
11. Net Profit/ Loss from ordinary
Activities after tax (9-10) |
77.569 |
82.005 |
261.020 |
|
12. Extraordinary item (net of tax expenses
Rs.) |
-- |
-- |
-- |
|
13. Net Profit/ Loss for the period (11-12) |
77.569 |
82.005 |
261.020 |
|
14. Paid-up Equity Shares Capital (Face Value of Rs. 2/- each) |
152.136 |
152.072 |
152.136 |
|
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) |
1.02 |
1.08 |
3.43 |
|
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) |
1.02 |
1.07 |
3.42 |
|
|
|
|
|
|
17. Public shareholding |
|
|
|
|
- Number of Shares |
28439330 |
28463439 |
28439330 |
|
- Percentage of shareholding |
37.39 |
37.43 |
37.39 |
|
|
|
|
|
|
18. Promoters and promoter group shareholding |
|
|
|
|
a) Pledged/ Encumbered |
|
|
|
|
- Number of shares |
27456700 |
34985000 |
27456700 |
|
- Percentage of Share (as a % of the total
shareholding of promoter and promoter group) |
57.65 |
73.54 |
57.65 |
|
- Percentage of share (as a % of the total share
capital of the company) |
36.09 |
46.01 |
36.09 |
|
|
|
|
|
|
b) Non-encumbered |
|
|
|
|
- Number of shares |
20172015 |
12587606 |
20172015 |
|
- Percentage of Share (as a % of the total
shareholding of promoter and promoter group) |
42.35 |
26.46 |
42.35 |
|
- Percentage of share (as a % of the total
share capital of the company) |
26.52 |
16.55 |
26.52 |
SEGMENT WISE
REVENUE, RESULTS AND CAPITAL EMPLOYED (STANDALONE)
(RS. IN MILLIONS)
|
Particulars |
Quarter Ended on
|
Nine Months
Ended |
|
|
|
31.12.2011 |
30.09.2011 |
31.12.2011 |
|
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
|
|
|
|
|
|
1. Segment Revenue (Net Sale/ Income from) |
|
|
|
|
-
Diamond |
3047.830 |
3684.724 |
10046.912 |
|
-
Studded Jewellery |
2121.765 |
1713.932 |
5473.547 |
|
Total |
5169.595 |
5398.656 |
15520.459 |
|
|
|
|
|
|
Less: Inter Segment Revenue |
1.709 |
70.800 |
157.009 |
|
Net Sales/ Income from Operation |
5167.886 |
5327.856 |
15363.450 |
|
|
|
|
|
|
2. Segment Results (profit before tax and Interests) |
|
|
|
|
-
Diamond |
220.787 |
224.537 |
647.804 |
|
-
Studded Jewellery |
125.475 |
78.675 |
302.382 |
|
Total |
346.262 |
303.212 |
950.186 |
|
|
|
|
|
|
Less: Interests |
255.204 |
192.196 |
603.467 |
|
Unallocated Income /(Expenditure) |
-- |
-- |
-- |
|
|
|
|
|
|
Total Profit before Tax |
91.058 |
111.016 |
346.720 |
|
|
|
|
|
|
3. Capital Employed |
|
|
|
|
(Segment Assets – Segment Liabilities) |
|
|
|
|
-
Diamond |
3555.461 |
3545.556 |
3555.461 |
|
-
Studded Jewellery |
1490.377 |
1588.089 |
1490.377 |
|
Total Capital Employed in Segment |
5045.838 |
5133.645 |
5045.838 |
|
|
|
|
|
|
Add: Unallowable assets less liabilities |
(120.051) |
(213.627) |
(120.051) |
|
|
|
|
|
|
Total capital employed in the company |
4925.787 |
4920.018 |
4925.787 |
NOTES:
1.
The above results were
reviewed by the Audit Committee and subsequently approved by the Board of their
respective meetings held on 13th February 2012.
2.
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, 2011 are Market to Market and a
notional gain aggregating to Rs.177.441 Millions (Rs.18.258 Millions as at 31st
December 2010) arising on contracts that were designated as effective hedges of
future cash flows, has been directly reflected in the reserves.
3.
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.
4.
The company had reveled /
fair valued its land and building situated at Mumbai and consequently, there is
an additional charge for depreciation of Rs.15.838 Millions for the nine months
ended 31st December 2011 (Rs.17.172 Millions) and an amount of
Rs.10.379 Millions and Rs.5.459 Millions (Rs.11.713 Millions and Rs.5.459) has
been withdrawn from revaluation Reserve and Amalgamation Reserve respectively
as per the scheme sanctioned by the
Hon’ble High Court of judicature at Bombay vide order dated 1st
October2010. This has no impact the profit for the period.
5.
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
6.
There were no investor
complaints pending at the beginning of the quarter. Thirteen complaints
received during the quarter out of which twenty one were resolved. There are no
complaints remaining unresolved at the end of the quarter.
7.
Previous year’s quarter’s
figures are re-grouped wherever necessary.
FIXED ASSETS:
·
·
Leasehold Land
·
Building
·
Leasehold Improvements
·
Plant and Machinery
·
Electrical Installation
·
Office Equipments
·
Furniture and Fixture
·
Vehicles
·
Computer Software
·
Trade Mark
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:
8.
The above results were
reviewed by the Audit Committee and subsequently approved by the Board of their
respective meetings held on 10th February 2011.
9.
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.
10.
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.
11.
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
a.
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.
b.
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.
c.
The amounts for the
period ended 31st December 2010 are strictly not comparable with the
corresponding previous period amounts.
d.
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.
12.
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
13.
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.
14.
Previous year’s quarter’s
figure are re-grouped wherever necessary.
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
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
BUSINESS DESCRIPTION
Subject is engaged in the diamond and jewellery
manufacturing. It has an international presence in 15 countries with a
geographically diversified customer base. The Company is organized into two
business segments: diamonds, which represent cutting and polishing of diamonds
and jewellery, which represent diamond studded gold/platinum jewellery. It has
developed international jewellery brands, such as Arisia, Sveni and Bhavya
(India and Middle East), Valina and Caro 74 (USA), Fiana (France), Scintilla88
and Mater Cut (Australia), and Amante88 (Hong Kong). The Company’s subsidiaries
include Shrenuj Lifestyle Limited, Shrenuj Overseas Limited, Shrenuj Botswana
(Pty) Limited, Shrenuj DMCC, Shrenuj Gems and Jewellery Limited and Shrenuj
Japan Corporation. During the fiscal year ended March 31, 2011 (Fiscal 2011),
the Company launched Embrazo collection in the United States. During fiscal 2011,
it acquired Sarin Galaxy 1000 diamond planning machines in Mumbai and Botswana.
For the six months ended 30 September 2010, subject’s revenues increased 47% to
RS10.72B. Net income increased 24% to RS285.1M. Revenues reflects an increase
in income from Diamond Segment and higher income from Studded Jewellery
segment. Net income was partially offset by an increase in consumption of raw
materials, higher employees cost, increased depreciation expenses and an
increase in other expenditure.
BOARD OF DIRECTORS
Mr. Shreyas K. Doshi
Mr. Shreyas K. Doshi is Executive Chairman of the Board,
Managing Director of company. He joined the business 38 years ago and was the
Chairman of the Gem and Jewellery Export Promotion Council. He was conferred with
Lifetime Achievement Award by the International Colorstone Association in 2003.
He is the Honorary Consul for Finland in Mumbai. He is on the Board of Amritlal
Chemaux (Private) Limited, a member of Indian Merchants Chambers Managing
Committee for more than a decade and is a Trustee of Saurashtra Trust.
Dr. Badrinarayan R.
Barwale
Dr. Badrinarayan R. Barwale is Non-Executive Independent
Director of subject. He is a winner of World Food Prize, which is comparable to
NOBEL prize in agriculture. He is the Chairman of Maharashtra Hybrid Seeds
Company Limited and Mahyco Vegetable Seeds Limited. He has received Padma
Bhushan and Freedom Fighter awards from the President of India
and Annasaheb Chirmule award for his
contribution to the Indian Agriculture. Business Week recognized Dr.
Barwale a The Star of Asia in 1999.
Dr. B. R. Barwale is on the Board of several reputed companies. He is
dedicated in the field of education, Indian agriculture, particularly the seed
industry and the eye care in big way.
Dr. Surendra Ambalal
Dave
Dr. Surendra Ambalal Dave is Non-Executive Independent
Director of Subject. He is the Chairman of Centre for Monitoring Indian
Economy, the premier economic monitoring institution of the country. He has a
diversified work experience with Reserve Bank of India, IDBI, SEBI and Unit
Trust of India. He was the founder Chairman of SEBI and also Chairman of Unit
Trust of India from where he retired in 1996. By training Dr. Dave is an
economist and topped the list of students both at B.A. and M.A. level in
economics in the University of Bombay. He started his career in India with
Reserve Bank of India as an economist. He has been associated with various
Committees of the Government of India dealing with reforms in the Capital
Market, Mutual Funds Sector, Insurance Sector and Pensions. He is on the Board
of several reputed companies such as HDFC Limited, Escort Limited, SBI DFHI
Limited, Mudra Lifestyle Limited, etc.
Mr. Vishal Shreyas
Doshi
Mr. Vishal Shreyas Doshi is Group Executive Director of
subject. He has been trained in all the aspects of diamonds and jeweIIery
manufacturing and sales. He achievement include: He has been instrumental in
the launch of a number of diamond jewellery brands in India (such as Arisia,
Sveni and Bhavya) and overseas (such as Joliesse). At the young age he has
earned remarkable respect for himself within the diamond and jewellery
business. He has been Director of Shrenuj Diajewels Limited, SHL Gems and
Jewellery Limited, Shrenuj Overseas Limited, Shrenuj Glitters Limited, Shrenuj
DMCC, Dubai, Astral Holding Inc., Shrenuj U.K. Limited, Shrenuj Jewellery (Far
East) Limited, SWA Trading Company Trapz LLC.
Mr. Keki Minoo Mistry
Mr. Keki Minoo Mistry is Non-Executive Independent Director
of subject. He holds a Bachelor of Commerce degree in Advanced Accountancy and
Auditing and is a Fellow Member of the Institute of Chartered Accountants of
India. He was actively involved in setting up of several HDFC group companies.
He was deputed on consultancy assignments for the Commonwealth Development
Corporation (CDC) in Thailand, Mauritius, and Caribbean Islands Jamaica. He has
also worked as a consultant for the Mauritius Housing Company and Asian
Development Bank. Mr. Mistry is Vice Chairman and Managing Director of Housing
Development Finance Corporation Limited (HDFC) and Chairman of Gruh Finance
Limited. He is also a Director on the Board of various other companies viz. IL
and FS Limited, Sun Pharmaceutical Industries Limited, The Great Eastern
Shipping Company Limited etc.
Mr. Nihar Nitin
Parikh
Mr. Nihar Nitin Parikh is Executive Director of subject. He
is a commerce graduate. He joined the Company on 1st October, 1992 as
Vice-President of the Jewellery Division at SEEPZ. He was appointed as
Executive Director with effect from 27th April, 1999. He is a driving force
behind the jewellery division of the Company; he is in jewellery manufacturing.
Under his guidance the Jewellery Division has contributed a great deal to the
overall growth of the Company. He travels in quest of latest technology and
designs. He has developed excellent business relations abroad.
Mr. Minoo R. Shroff
Mr. Minoo R. Shroff is Non-Executive Independent Director of
Subject. He has been Management Accountant, Business Economist and a Corporate Counsellor
to the industrial groups for last 40 years. His achievements include, The
Emperor of Japan conferred the award of the Order of the Rising Sun, Gold Rays
with Neck Ribbon in the year 2000 and
he was elected as President of the Indo Iranian Friendship Society in
2003. He has been Director of Amzel Automotive Limited, STI India Limited, AFL
Limited, Nagarajuna Oil Corporation Limited and M. P. Paschim Kshetra Vidyut
Vitran. He has been a member of Audit Committee of Nagarajuna Oil Corporation
Limited and STI India Limited.
Mr. Suresh N. Talwar
Mr. Suresh N. Talwar is Non-Executive Independent Director
of subject. He is a solicitor and
advocate. He was a partner of Crawford Bayley and company till 31st March,
2006. He continued his association with the said firm as a special advisor till
31st December, 2006. He is now a founder partner of Talwar, Thakore and
Associates with effect from 1st January, 2007. He is a legal counsel to
numerous Indian companies, multinational corporations, Indian and foreign
banks. He specializes in corporate law, corporate tax and foreign exchange
laws. He holds directorships in several public, private and foreign companies
such as Larsen and Toubro Limited, Blue Star Limited, Merck Limited, Cadbury
India Limited, Birla Sun Life Insurance Company Limited, Biocon Limited etc.
Mr. Shobha Singh
Thakur
Mr. Shobha Singh Thakur is Non-Executive Independent
Director of Subject. He 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 India, founder Chairman of HDFC Bank and
Senior Advisor of United Nations Development Programme (UNDP). Mr. Thakur has
experience of central banking functions covering, among others, management of
foreign exchange, exchange rate and external debt, regulation and monitoring of
external trade financing, foreign investment, exchange market etc. He was on
the Board of the Bombay Stock Exchange of India Limited (BSE) as a Public
Representative Director for five years. Currently he is the Chairman of Central
Depository Services (India) Limited. Mr. Thakur is also on the Board of several
other reputed companies such as Kotak Mahindra Old Mutual Life Insurance
Company Limited, DSP Merrill Lynch Trustee Company (Private) Limited, KEC
International Limited, HDFC Securities Limited, Kamat Hotels (India) Limited,
Lafarge India Private Limited, etc.
PRESS RELEASE:
GEM OF A GUINNESS
RECORD BY SURAT
04 JANUARY 2012
SURAT: The
sparkling gems cut and polished by the skilled diamond workers in the world's
biggest diamond cutting and polishing centre in Surat have found a coveted
place in the Guinness Book of World Records.
A diamond ring
named 'Tsarevna Swan', which made it to the Guinness Book of World Records
recently as a ring studded with most number of diamonds, has a Surat
connection.
The 64 mm tall,
highly stylized 18 carat white gold ring created by Lobortas Classic Jewellery
House of Kiev in Ukraine is set with 2,525 miniscule diamonds exclusively
supplied by Shrenuj and Company Limited from its Surat factory.
The Guinness Book
of World Records defines this record as 'the most diamonds set in one ring
wearable on the human finger'. The ring is studded with a total of 2,525
diamonds in minuscule size ranging from 0.001 to 0.05 carat with total weight
of 10.48 carat.
"It is a
great honour for us to get an international recognition in the Guinness book of
world records. All the 2,525 diamonds were cut and polished exclusively for the
Ukraine based jewellery house and the order was executed in the later part of
2011," said a company spokesperson.
"The owner of
Tsarevna Swan ring has set the price at $1.3 million (Rs70.000 Millions). The
ring is currently being showcased in Keiv, Ukraine and will be taken across
various other exhibitions globally, including in India," he added.
This is the second
time that the skills of the diamond polishers in Surat have received global
recognition.
In April-2010, the
Surat-based Bhavani Gems made a record of sorts by polishing 3,333 pieces of
world's smallest diamonds from a one carat stone with each stone weighing
0.0003 carat - usually a one carat stone can yield up to 2,000 to 2,500 stones.
The 3,333 pieces
of the world's smallest diamonds were specially made for the internationally
renowned wristwatch manufacturing company in Switzerland.
ACQUISITION OF SHARES
UNDER REGULATION 11(2A) OF SEBI TAKEOVER CODE
21 DECEMBER 2011
India, Dec. 21 -- Shrenuj and Company Limited has informed BSE
that Prest Impex Private Limited, a Promoter Group Company has acquired 2000
Equity Shares of Rs. 2/- each i.e. 0.003% of the existing paid up capital of
the Company through open market purchases in normal segment on Stock
Exchange(s).
PURCHASE OF SHARES
20 DECEMBER 2011
India, Dec. 20 -- Shrenuj and Company Limited has informed the Exchange
that pursuant to the amended Regulation 11(2A) of SEBI (Substantial Acquisition
of Shares and Takeovers) Regulations, 1997 (SEBI Takeover Code), Prest Impex Private
Limited, a Promoter Group Company has acquired 10,000 Equity Shares of Rs.2/-
each i.e. 0.01% of the existing paid up capital of the Company through open
market purchases in normal segment on Stock Exchange(s).
ACQUISITION OF
SHARES
19 DECEMBER 2011
India, Dec. 19 -- Shrenuj and Company Limited has informed BSE that Prest Impex Private Limited, a Promoter Group Company has acquired 10,000 Equity Shares of Rs. 2/- each i.e. 0.01% of the existing paid up capital of the Company through open market purchases in normal segment on Stock Exchange(s).
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.49.35 |
|
|
1 |
Rs.78.68 |
|
Euro |
1 |
Rs.65.63 |
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.