MIRA INFORM REPORT

Report Date :

19.12.2014

IDENTIFICATION DETAILS

Name :	K P SANGHVI AND SONS
Registered Office :	GW-7011/12, Bharat Diamond Bourse, Bandra Kurla Complex, Bandra (East) Mumbai – 400051, Maharashtra
Country :	India
Financials (as on) :	31.03.2014
Year of Establishment :	1965
Capital Investment / Paid-up Capital :	Rs. 3824.786 Millions
TAN No.: [Tax Deduction & Collection Account No.]	Not Available
PAN No.: [Permanent Account No.]	Not Available
Legal Form :	Partnership Concern with an Unlimited Liability of the Partners
Line of Business :	Processor of Rough Diamonds to Polish Diamonds.
No. of Employees :	2000 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

Ba (49)

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

Status :	Satisfactory
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is old and well established partnership concern having satisfactory track. Trade relations are fair. Business is active. Payment terms are reported to be regular and as per commitment. The concern can be considered 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, 2014

Country Name	Previous Rating (30.06.2014)	Current Rating (30.09.2014)
India	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

EXTERNAL AGENCY RATING

Rating Agency Name	ICRA
Rating	Long term fund based limits = BBB+
Rating Explanation	Moderate degree of safety and moderate credit risk.
Date	June, 2014

Rating Agency Name	ICRA
Rating	Short term fund based limits = A2
Rating Explanation	Strong degree of safety and low credit risk.
Date	June, 2014

RBI DEFAILTERS’ LIST STATUS

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

EPF (Employee Provident Fund) DEFAILTERS’ 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. Saju Joseph
Designation :	Finance Manager
Contact No.:	91-22-61122222
Date :	18.12.2014

LOCATIONS

Registered Office :	GW-7011/12, Bharat Diamond Bourse, Bandra Kurla Complex, Bandra (East) Mumbai – 400051, Maharashtra, India
Tel. No.:	91-22-61122222 / 61233333
Fax No.:	91-22-23630813
E-Mail :	info@kpsanghvi.com
Website :	http://www.kpsanghvi.com
Location :	Owned
Factory :	Umaiya Chawk, Near Umaiya Mata Temple, Surat -, Gujarat, India
Tel. No.:	91-261-2569100
Fax No.:	91-261-2569000
E-Mail :	surat@kpsanghvi.com

PARTNERS

Name :	Mr. Babulal P Sanghvi
Designation :	Partner
Name :	Mr. Kishore Sanghvi
Designation :	Partner
Name :	Kirti Sanghvi
Designation :	Partner
Name :	Mr. Arvind Sanghvi
Designation :	Partner
Name :	Mr. Dilip Sanghvi
Designation :	Partner
Name :	Mr. Ambrish Sanghvi
Designation :	Partner
Name :	Mr. Samira Sanghvi
Designation :	Partner

KEY EXECUTIVES

Name :	Mr. Saju Joseph
Designation :	Finance Manager

BUSINESS DETAILS

Line of Business :	Processor of Rough Diamonds to Polish Diamonds.
Brand Names :	Not Divulged
Agencies Held :	Not Divulged
Exports :
Products :	Polish Diamonds
Countries :	USA Hong Kong Dubai
Imports :
Products :	Rough Diamonds
Countries :	Belgium UAE Hong Kong
Terms :
Selling :	Cash and Credit
Purchasing :	Cash, Credit and Advance

GENERAL INFORMATION

Suppliers :

Reference :	DBS, London
Name of the Person :	Not Divulged
Contact No.:	Not Divulged
Since How Long Known :	Not Divulged
Experience :	Not Divulged
Maximum Limit Dealt :	Not Divulged

Customers :

Reference :	Sam Diamond BVBA
Name of the Person :	Not Divulged
Contact No.:	Not Divulged
Since How Long Known :	Not Divulged
Experience :	Not Divulged
Maximum Limit Dealt :	Not Divulged

No. of Employees :

2000 (Approximately)

Bankers :

State Bank of India (Lead Bank), Nariman Point, Mumbai, Maharashtra, India

Facilities :

Fund and Non-Fund = Rs. 12000.000 Millions

Banking Relations :
Auditors :
Name :	Vipin and Company Chartered Accountants
Name :	Suresh Surana and Associates Chartered Accountants
Memberships :	Not Available
Collaborators :	Not Available
Associates/Subsidiaries :	Not Available

CAPITAL STRUCTURE

AS ON 31.03.2014

PARTNER’S CAPITAL ACCOUNT

Particulars	Amount
Partner’s Capital	Rs. 3824.786 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2014	31.03.2013	31.03.2012
SHAREHOLDERS FUNDS
1] Partner's Capital	3824.786	3481.084	2916.018
2] Share Application Money	0.000	0.000	0.000
3] Reserves & Surplus	0.000	0.000	0.000
4] (Accumulated Losses)	0.000	0.000	0.000
NETWORTH	3824.786	3481.084	2916.018
LOAN FUNDS
1] Secured Loans	8954.119	9122.475	6812.776
2] Unsecured Loans	0.000	0.000	0.000
TOTAL BORROWING	8954.119	9122.475	6812.776
DEFERRED TAX LIABILITIES	0.000	0.000	0.000
TOTAL	12778.905	12603.559	9728.794
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]	826.779	887.532	526.283
Capital work-in-progress	216.055	88.213	0.000
INVESTMENT	161.873	210.473	304.663
DEFERRED TAX ASSETS	8.319	3.023	3.146
CURRENT ASSETS, LOANS & ADVANCES
Inventories	9620.112	10129.379	9010.742
Sundry Debtors	3059.203	3504.606	3643.119
Cash & Bank Balances	157.337	367.205	34.936
Other Current Assets	146.052	5.180	87.938
Loans & Advances and Deposits	115.422	95.895	0.000
Total Current Assets	13098.126	14102.265	12776.735
Less : CURRENT LIABILITIES & PROVISIONS
Sundry Creditors	0.000	0.000	0.000
Other Current Liabilities	1510.981	2687.666	3882.033
Provisions	21.266	0.281	0.000
Total Current Liabilities	1532.247	2687.947	3882.033
Net Current Assets	11565.879	11414.318	8894.702
MISCELLANEOUS EXPENSES	0.000	0.000	0.000
PROFIT AND LOSS	0.000	0.000
TOTAL	12778.905	12603.559	9728.794

PROFIT & LOSS ACCOUNT

	PARTICULARS	31.03.2014	31.03.2013	31.03.2012
	SALES
	Income	16967.990	16191.529	14924.820
	Other Income	159.623	10.076	2.349
	TOTAL	17127.613	16201.605	14927.169
Less	EXPENSES
	Cost of Materials Consumed	12045.798	13977.969	12965.915
	Purchases of Stock-in-Trade	0.000	0.000	0.000
	Changes in inventories of finished goods, work-in-progress and Stock-in-Trade	1179.996	(1560.438)	0.000
	Employees benefits expense	275.611	273.069	242.947
	Other expenses	1403.434	2057.060	158.568
	TOTAL	14904.839	14747.660	13367.430
Less	PROFIT/ (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION	2222.774	1453.945	1559.739
Less	FINANCIAL EXPENSES	1471.268	770.728	940.074
	PROFIT / (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION	751.506	683.217	619.665
Less/ Add	DEPRECIATION/ AMORTISATION	79.563	81.418	67.749
	PROFIT/ (LOSS) BEFORE TAX	671.943	601.799	551.916
Less	TAX	185.470	188.161	172.937
	PROFIT/ (LOSS) AFTER TAX	486.473	413.638	378.979

Expected Sales ( 2014-2015 ) : Rs.19750.000 Millions

The above information has been parted by Mr. Saju Joseph.

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

KEY RATIOS

PARTICULARS		31.03.2014	31.03.2013	31.03.2012
Net Profit Margin PAT/ Sales	(%)	2.87	2.55	2.54
PBIDT / Sales	(%)	13.10	8.98	10.45
Return on Total Assets (PBT/Total Assets}	(%)	4.83	4.01	4.15
Return on Investment (ROI) (PBT/Networth)		0.18	0.17	0.19
Debt Equity Ratio (Total Debt /Networth)		2.34	2.62	2.34
Current Ratio (Current Asset/Current Liability)		8.55	5.25	3.29

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)
Partner's Capital	2916.018	3481.084	3824.786
Reserves & Surplus	0.000	0.000	0.000
Net worth	2916.018	3481.084	3824.786
Secured Loans	6812.776	9122.475	8954.119
Unsecured Loans	0.000	0.000	0.000
Total borrowings	6812.776	9122.475	8954.119
Debt/Equity ratio	2.336	2.621	2.341

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	14924.820	16191.529	16967.990
		8.487	4.795

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	14924.820	16191.529	16967.990
Profit	378.979	413.638	486.473
	2.54%	2.55%	2.87%

LOCAL AGENCY FURTHER INFORMATION

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	No
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	--
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	No
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	No

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.

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 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.63.31
UK Pound	1	Rs.98.67
Euro	1	Rs.78.10

INFORMATION DETAILS

Information Gathered by :	HNA
Analysis Done by :	SUM
Report Prepared by :	SNT

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	6
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	6
--RESERVES	1~10	5
--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	YES
--AFFILIATION	YES/NO	NO
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
DEFAULTER
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		49

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.