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Report Date : |
02.02.2013 |
IDENTIFICATION DETAILS
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Name : |
SHRENUJ DMCC |
|
|
|
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Registered Office : |
41 D Al Mas Tower, Jumeirah Lakes Towers Sheikh Zayed Road PO Box
120485 Dubai |
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|
|
|
Country : |
United Arab Emirates |
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|
|
|
Financials (as on) : |
31.12.2012 |
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|
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Date of Incorporation : |
24.07.2005 |
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|
|
|
Legal Form : |
Limited Liability Company |
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|
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Line of Business : |
Traders of cut diamonds and jewellery |
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|
|
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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 : |
Good |
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Payment Behaviour : |
Regular |
|
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 – June 30th, 2012
|
Country Name |
Previous Rating (31.03.2011) |
Current Rating (30.06.2012) |
|
UAE |
A2 |
A2 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
Off-credit |
D |
UAE - ECONOMIC OVERVIEW
The UAE has an open economy with a high per capita income
and a sizable annual trade surplus. Successful efforts at economic
diversification have reduced the portion of GDP based on oil and gas output to
25%. Since the discovery of oil in the UAE more than 30 years ago, the UAE has
undergone a profound transformation from an impoverished region of small desert
principalities to a modern state with a high standard of living. The government
has increased spending on job creation and infrastructure expansion and is
opening up utilities to greater private sector involvement. In April 2004, the
UAE signed a Trade and Investment Framework Agreement with Washington and in
November 2004 agreed to undertake negotiations toward a Free Trade Agreement
with the US, however, those talks have not moved forward. The country's Free
Trade Zones - offering 100% foreign ownership and zero taxes - are helping to
attract foreign investors. The global financial crisis, tight international credit,
and deflated asset prices constricted the economy in 2009. UAE authorities
tried to blunt the crisis by increasing spending and boosting liquidity in the
banking sector. The crisis hit Dubai hardest, as it was heavily exposed to
depressed real estate prices. Dubai lacked sufficient cash to meet its debt
obligations, prompting global concern about its solvency. The UAE Central Bank
and Abu Dhabi-based banks bought the largest shares. In December 2009 Dubai
received an additional $10 billion loan from the emirate of Abu Dhabi. The
economy is expected to continue a slow rebound. Dependence on oil, a large
expatriate workforce, and growing inflation pressures are significant long-term
challenges. The UAE's strategic plan for the next few years focuses on
diversification and creating more opportunities for nationals through improved
education and increased private sector employment.
Source
: CIA
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
SHRENUJ DMCC
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 / 4357242
Facsimile : (971-4)
2295684 / 4357658
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.
Subject operates from a small suite of offices that are rented and
located in the Central Business Area of Dubai.
Name Position
· Apoorva Prakash
Doshi Managing
Director
· Smit Kothari General
Manager
· Arapit Shah Finance
Manager
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
· Shrenuj & Co
Ltd 100%
405 Dharam Palace, 100 - 103 N. S. Patkar
Marg
Mumbai - 400 007
India
Tel:
(91-22) 66373500
Fax:
(91-22) 23632982
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
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 highlights provided by local sources are given below:
Currency: United States Dollars (US$) & Indian Rupees (INR)
Balance Sheet 31/12/12 31/12/11
31/12/12 31/12/11
US$ US$ INR INR
ASSETS
Non-current assets
Property, plant and equipment 4,198,542
3,767,151 213,579,832 191,634,971
Capital work in progress 93,715
219,493 4,767,282 11,165,609
Investments 865,000
865,000 44,002,550 44,002,550
5,157,257 4,851,644 262,349,664 246,803,130
Current assets
Inventories 15,456,827
14,906,810 786,288,789 758,309,425
Trade and other receivables 68,231,719
50,783,484 3,470,947,546 2,583,355,831
Prepayments 208,633
105,083 10,613,161 5,345,572
Due from related parties 2,120,191
5,220,191 107,854,116 265,551,116
Cash and bank balances 7,067,946
1,100,440 359,546,413 55,979,383
93,085,316 72,116,008 4,735,250,025 3,668,541,327
TOTAL ASSETS 98,242,573
76,967,652 4,997,599,689 3,915,344,457
EQUITY AND LIABILITIES
Equity
Share capital 3,054,496
3,054,496 155,382,212 155,382,212
Accumulated profits 24,539,855
17,809,663 1,248,342,424 905,977,557
Total equity 27,594,351
20,864,159 1,403,724,635 1,061,359,768
Non-current liabilities 4,207,732
5,684,114 214,047,327 289,150,879
Current liabilities
Trade and other payables 32,410,079
36,089,051 1,648,700,719 1,835,850,024
Due to related parties 1,333,400
1,333,400 67,830,058 67,830,058
Bank borrowings 32,697,011
12,996,928 1,663,296,950 661,153,727
66,440,490 50,419,379 3,379,827,726 2,564,833,810
TOTAL EQUITY AND
LIABILITIES 98,242,573
76,967,652 4,997,599,689 3,915,344,457
Statement of Income
Sales 161,966,012
91,006,597 8,239,211,844 4,629,505,589
Cost of sales (149,426,685)
(82,962,958) (7,601,335,466) (4,220,325,673)
Gross profit 12,539,327
8,043,639 637,876,378 409,179,916
Other income 39,957
51,152 2,032,613 2,602,102
Expenses (4,960,541)
(1,854,164) (252,342,721) (94,321,323)
Profit from operations 7,618,743 6,240,627 387,566,270 317,460,695
Interest income from banks 22,883
2,808 1,164,058 142,843
Interest income from a related party 85,455
- 4,347,096 -
Finance cost paid to banks (996,889)
(787,777) (50,711,743) (40,074,216)
Profit from operation after finance cost 6,730,192 5,455,658 342,365,681
277,529,322
Profit/(loss) on derivative instruments -
(149,540) - (7,607,100)
Net profit for the
year 6,730,192
5,306,118 342,365,681 269,922,222
Local sources consider subject’s financial condition to be Good.
·
Habib Bank AG Zurich
Baniyas Road
PO Box: 3306
Dubai
Tel: (971-4) 2214535
No complaints regarding subject’s payments have been reported.
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.53.32 |
|
|
1 |
Rs.84.60 |
|
Euro |
1 |
Rs.72.63 |
INFORMATION DETAILS
|
Report
Prepared by : |
SDA |
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%)
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.