MIRA INFORM REPORT

Report Date :

16.12.2014

IDENTIFICATION DETAILS

Name :	POPATLAL NATHALAL SHAH
Registered Office :	1802, Panchratna, Opera House, Mumbai – 400004, Maharashtra
Country :	India
Financials (as on) :	31.03.2014
Year of Establishment :	1956
Capital Investment :	Rs. 509.599 Millions
TAN No.: [Tax Deduction & Collection Account No.]	MUMP04028D
PAN No.: [Permanent Account No.]	AAAFP0468K
Legal Form :	Partnership Concern with an Unlimited Liability of the Partners
Line of Business :	Trader of Diamonds.
No. of Employees :	20 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

Ba (44)

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Satisfactory
Payment Behaviour :	Slow but correct
Litigation :	Clear
Comments :	Subject is an established partnership concern having a satisfactory track record. The concern is progressing well. Trade relations are reported as fair. Business is active. Payment terms are reported to be slow but correct. The concern 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.

EXTERNAL AGENCY RATING

Rating Agency Name	CRISIL
Rating	Long term rating=BB-
Rating Explanation	Moderate risk of default.
Date	07.11.2014

RBI DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available RBI Defaulters’ list.

EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of 31-03-2014.

INFORMATION PARTED BY

Name :	Mr. Jignesh Shah
Designation :	Accountant
Contact No.:	91-22-23611280
Date :	15.12.2014

LOCATIONS

Registered Office :	1802, Panchratna, Opera House, Mumbai - 400004, Maharashtra, India
Tel. No.:	91-22-23611280/ 23693863/ 4782
Fax No.:	91-22-23630083
E-Mail :	info@pnshah.com nirav@pnshah.com
Website :	www.pnshah.com
Location :	Owned
Locality :	Commercial
Corporate Office :	GW-7022, Bharat Diamond Bourse, Bandra Kurla Complex, Bandra East, Mumbai – 400051, Maharashtra, India
Location :	Owned
Branch Office :	Mahavir Chamber, Tartiya Hanuman Sheri, Surat, Gujarat, India
Location :	Leased

PARTNERS

Name :	Mr. Ajay P. Shah
Designation :	Partner
Name :	Mr. Priti Ajay Shah
Designation :	Partner
Name :	Mr. Nirav Ajay Shah
Designation :	Partner

KEY EXECUTIVES

Name :	Mr. Jignesh Shah
Designation :	Accountant

BUSINESS DETAILS

Line of Business :	Trader of Diamonds.
Products :	Diamonds
Exports :
Products :	Diamonds
Countries :	· Hong Kong · America · Shanghai · UAE · Middle East
Imports :
Products :	Rough Diamond
Countries :	· Israel · Belgium
Terms :
Selling :	Cash, Cheque
Purchasing :	Cash, Cheque

GENERAL INFORMATION

Suppliers :

Reference:	NOT DIVULGED
Name of the Person (with Designation):
Contact Number:
Since How Long Known:
Experience :
Maximum Limit Dealt:

· Pan International DMCC

· Paras Gems NV

· Aurostar Jewellery India Private Limited

· Mayur Exports

· Shasvat Diam

· Shital Gems Private Limtied

· Vaibhav Gems

· HRD Diamond Institute Private Limited

· International Gemological Inst. (India) Private Limited

· Oscar Décor Private Limited

Customers :

Reference:	NOT DIVULGED
Name of the Person (with Designation):
Contact Number:
Since How Long Known:
Experience :
Maximum Limit Dealt:

Wholesalers, Retailers

· Ami Impex Company Limited

· Diamond Deal LLC

· Samir Gems HK Limited

· Blue Star Diamonds Private Limited

· AJS Exports

· Jewelex India Private Limited

· R.N. Gems

· Remy Diamonds Private Limited

· Sheel Gems

· Star Brillan

· Veer Gems

No. of Employees :

20 (Approximately)

Bankers :

Bank Name:	The Royal Bank of Scotland N.V.
Branch:	14, Veer Nariman Road, Fort, Mumbai – 400023, Maharashtra, India
Name of the Person (with Designation):	Mr. Vaibhav Shah (Regional Manager)
Contact Number:	91-22-66585982
Name of Account Holder:	POPATLAL NATHALAL SHAH
Account Number:	Not Divulged
Account Since (Date/ Year of A/c Opening):	40 Years
Average Balance Maintained (Optional):	Not Disclosed
Credit Facilities Enjoyed (CC/OD/Term Loan):	Cash Credit: Rs. 650.000 Millions
Account Operation:	Satisfactory
Remarks: Management is very strong, having very good track record and good future prospects. Banking transaction is also very good.

· State Bank of India, Diamond Branch, 1^st Floor Majestic Shopping Centre, 144, J.S.S. Road, Mumbai – 400004, Maharashtra, India

· The Vysya Bank Limited

· Antwerp Diamond Bank NV

Facilities :

SECURED LOANS	31.03.2014 (Rs. In Millions)	31.03.2013 (Rs. In Millions)
Loan and Borrowings From Bank
The Royal bank of Scotland N.V. (Post Shipment)	52.784	216.354
The Royal bank of Scotland N.V. (Packing Credit)	452.131	276.220
Antwerp Diamond Bank N.V. (Post Shipment)	143.101	114.785
Antwerp Diamond Bank N.V. (Packing Credit)	0.000	49.595
State Bank of India (Packing Credit)	0.023	4.035
State Bank of India (Packing Credit)	38.599	6.963
State Bank of India (Post Shipment)	25.265	31.209
Add: Borrowing Translation Control A/C	(3.152)	4.252
Total	708.751	703.413

Auditors :
Name :	Sampat Mehta and Associates Chartered Accountants
Address :	Mumbai, Maharashtra, India
Related Parties :	· Nirjay Diamond · Shatrunjay Diamond · Paras Gems NV · Ashwin Gems

CAPITAL STRUCTURE

As on 31.03.2014

Capital Investment :
Owned :	Rs. 509.599 Millions
Borrowed :	--
Total :	Rs. 509.599 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

Expected Sales (2014-2015): Rs. 3000.000 Millions

The above information has been parted by Mr. Jignesh Shah (Accountant).

Note: Sole Proprietary and Partnership concerns are exempted from filing their financials with the Government Authorities or Registry.

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2014	31.03.2013	31.03.2012
SHAREHOLDERS FUNDS
1] Partners Capital		509.599	459.173	394.230
2] Share Application Money		0.000	0.000	0.000
3] Profit and Loss Account		0.000	0.000	0.000
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		509.599	459.173	394.230
LOAN FUNDS
1] Secured Loans		708.751	703.413	658.614
2] Unsecured Loans		6.898	1.355	1.355
TOTAL BORROWING		715.649	704.768	659.969
DEFERRED TAX LIABILITIES		2.370	1.901	1.795
TOTAL		1227.618	1165.842	1055.994
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		188.505	185.093	173.586
Capital work-in-progress		0.000	0.000	0.000
INVESTMENT		0.000	0.000	0.000
DEFERRED TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	815.765	708.989	502.596
	Sundry Debtors	394.950	725.594	547.730
	Cash & Bank Balances	16.888	15.882	19.438
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	22.654	27.449	27.707
Total Current Assets		1250.257	1477.914	1097.471
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	211.144	497.165	215.063
	Other Current Liabilities	0.000	0.000	0.000
	Provisions	0.000	0.000	0.000
Total Current Liabilities		211.144	497.165	215.063
Net Current Assets		1039.113	980.749	882.408
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		1227.618	1165.842	1055.994

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2014	31.03.2013	31.03.2012
	SALES
		Income	2749.674	2175.112	2105.553
		Other Income	6.115	12.053	4.120
		TOTAL	2755.789	2187.165	2109.673
Less	EXPENSES
		Cost of Goods Sold	2487.814	2002.464	1950.826
		Labour Charges	47.765	36.838	30.320
		Salaries	3.607	1.328	1.237
		Foreign Tour Expenses	1.483	2.144	1.237
		Printing and Stationery	0.182	0.133	0.114
		Telephone Expenses	0.601	0.572	0.473
		Internet Expenses	0.107	0.028	0.022
		Electricity Expenses	0.699	0.491	0.388
		Export Clearing Charges	0.632	0.405	0.126
		Exports Freight	2.994	2.000	1.887
		Import License Fees	0.000	0.005	0.000
		Office Repairs and Maintenance	1.509	1.379	1.512
		Bank Charges	16.297	14.789	27.167
		Loan Rating Charges	0.000	0.101	0.132
		Motor Car Expenses	1.149	0.955	0.436
		Audit Fees	0.337	0.337	0.168
		Other Expenses	145.132	91.823	67.842
		TOTAL	2710.308	2155.792	2083.887
	PROFIT / (LOSS) BEFORE DEPRECIATION AND AMORTISATION		45.481	31.373	25.786
Less	DEPRECIATION/ AMORTISATION		5.694	3.970	3.772
	NET PROFIT/ (LOSS)		39.787	27.403	22.014

KEY RATIOS

PARTICULARS		31.03.2014	31.03.2013	31.03.2012
Net Profit Margin (PAT/Sales)	(%)	1.45	1.26	1.05
Operating Profit Margin (PBDIT/Sales)	(%)	100.22	100.55	100.20
Return on Total Assets (PBT/Total Assets}	(%)	2.77	0.02	1.73
Return on Investment (ROI) (PBT/Networth)		0.08	0.06	0.06
Debt Equity Ratio (Total Debt/Networth)		1.40	1.53	1.67
Current Ratio (Current Asset/Current Liability)		5.92	2.97	5.10

FINANCIAL ANALYSIS

[all figures are in Rupees Millions]

DEBT EQUITY RATIO

Particular	31.03.2012	31.03.2013	31.03.2014
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Share Capital	394.23	459.173	509.599
Reserves & Surplus	0.000	0.000	0.000
Net worth	394.230	459.173	509.599
Secured Loans	658.614	703.413	708.751
Unsecured Loans	1.355	1.355	6.898
Total borrowings	659.969	704.768	715.649
Debt/Equity ratio	1.674	1.535	1.404

YEAR-ON-YEAR GROWTH

Year on Year Growth	31.03.2012	31.03.2013	31.03.2014
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Sales	2105.553	2175.112	2749.674
		3.304	26.415

NET PROFIT MARGIN

Net Profit Margin	31.03.2012	31.03.2013	31.03.2014
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Sales	2105.553	2175.112	2749.674
Profit	22.014	27.403	39.787
	1.05%	1.26%	1.45%

LOCAL AGENCY FURTHER INFORMATION

CURRENT MATURITIES OF LONG TERM DEBT IS NOT AVAILABLE

Sr. No.	Check List by Info Agents	Available in Report (Yes / No)
1]	Year of Establishment	Yes
2]	Locality of the firm	Yes
3]	Constitutions of the firm	Yes
4]	Premises details	No
5]	Type of Business	Yes
6]	Line of Business	Yes
7]	Promoter's background	Yes
8]	No. of employees	Yes
9]	Name of person contacted	Yes
10]	Designation of contact person	Yes
11]	Turnover of firm for last three years	Yes
12]	Profitability for last three years	Yes
13]	Reasons for variation <> 20%	-----
14]	Estimation for coming financial year	Yes
15]	Capital in the business	Yes
16]	Details of sister concerns	Yes
17]	Major suppliers	Yes
18]	Major customers	Yes
19]	Payments terms	Yes
20]	Export / Import details (if applicable)	Yes
21]	Market information	-----
22]	Litigations that the firm / promoter involved in	-----
23]	Banking Details	Yes
24]	Banking facility details	Yes
25]	Conduct of the banking account	Yes
26]	Buyer visit details	-----
27]	Financials, if provided	Yes
28]	Incorporation details, if applicable	No
29]	Last accounts filed at ROC	No
30]	Major Shareholders, if available	No
31]	Date of Birth of Proprietor/Partner/Director, if available	Yes
32]	PAN of Proprietor/Partner/Director, if available	No
33]	Voter ID No of Proprietor/Partner/Director, if available	No
34]	External Agency Rating, if available	Yes

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 8^th Century B.C.  India, in fact, remained undisputed leader till 18^th 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.

- 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 30^th October 2010 is as under –

- Gem and Jewellery Export Promotion Council in its statistical data has shown the export of polished diamonds to have increase by 28 % in February 2013. Compared to $ 1.4 bn worth of polished diamond export in February, 2012, India exported $ 1.84 billion worth of polished diamonds in February 2013. A senior executive of GJEPC said, “Export of cut and polished diamonds started falling month-wise after the imposition of 2 % of import duty on the polished diamonds. But February, 2013 has given a new ray of hope to the industry as the export of polished diamonds has actually increased by 28 %. It means the industry  is on the track of recovery and round tripping of diamonds has stopped completely.” Demand has started coming from the US, the UK, Japan and China. India’s polished diamond export is expected to cross $ 21 bn in 2013-14.

- The banking sector has started exercising restraint while following prudent risk management norms when lending money to gems and jewellery sector. This follows the implementation of Basel III accord – a global voluntary regulatory standard on bank capital adequacy, stress testing and market liquidity.

UNSECURED LOAN

PARTICULAR	31.03.2014 (Rs. In Millions)	31.03.2013 (Rs. In Millions)
Loan and Borrowings From Others
Paruben N. Shah Estate A/C	0.024	0.024
Popatlal N. Shah Estate A/C	1.330	1.331
Nirjay Diamond	5.544	0.000
Total	6.898	1.355

FIXED ASSETS

· Air Condition

· Computer and Software

· Electric Scale

· Godrej Safe

· Machinery

· Office Furniture

· Office Premises

· Safeguard

· Telephone System

· CCTV Camera

· Office Furniture

· Honda Motor Car

· Computers

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No 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.62.65
UK Pound	1	Rs.98.53
Euro	1	Rs.78.02

INFORMATION DETAILS

Information Gathered by :	GYT
Analysis Done by :	DIV
Report Prepared by :	NKT

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILITY	1~10	5
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--RESERVES	1~10	4
--CREDIT LINES	1~10	4
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
DEFAULTER
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		44

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	--

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.