MIRA INFORM REPORT

Report Date :

17.07.2014

IDENTIFICATION DETAILS

Name :	SHRENUJ FAR EAST LTD.
Registered Office :	5/F., Kaiseng Commercial Centre, 4-6 Hankow Road, Tsimshatsui, Kowloon,
Country :	Hong Kong
Date of Incorporation :	15.10.1997
Com. Reg. No.:	21311654
Legal Form :	Private Limited Company
Line of Business :	Importer, Exporter and Wholesaler of all kinds of diamonds and jewellery products, emerald, precious stones
No. of Employees	45

RATING & COMMENTS

MIRA’s Rating :

Ba

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

Status :	Satisfactory
Payment Behaviour :	No complaints
Litigation :	Clear

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – March 31, 2014

Country Name	Previous Rating (31.12.2013)	Current Rating (31.03.2014)
Hong Kong	A1	A1

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

HONG KONG ECONOMIC OVERVIEW

Hong Kong has a free market economy, highly dependent on international trade and finance - the value of goods and services trade, including the sizable share of re-exports, is about four times GDP. Hong Kong has no tariffs on imported goods, and it levies excise duties on only four commodities, whether imported or produced locally: hard alcohol, tobacco, hydrocarbon oil, and methyl alcohol. There are no quotas or dumping laws. Hong Kong's open economy left it exposed to the global economic slowdown that began in 2008. Although increasing integration with China, through trade, tourism, and financial links, helped it to make an initial recovery more quickly than many observers anticipated, its continued reliance on foreign trade and investment leaves it vulnerable to renewed global financial market volatility or a slowdown in the global economy. The Hong Kong government is promoting the Special Administrative Region (SAR) as the site for Chinese renminbi (RMB) internationalization. Hong Kong residents are allowed to establish RMB-denominated savings accounts; RMB-denominated corporate and Chinese government bonds have been issued in Hong Kong; and RMB trade settlement is allowed. The territory far exceeded the RMB conversion quota set by Beijing for trade settlements in 2010 due to the growth of earnings from exports to the mainland. RMB deposits grew to roughly 12% of total system deposits in Hong Kong by the end of 2013. The government is pursuing efforts to introduce additional use of RMB in Hong Kong financial markets and is seeking to expand the RMB quota. The mainland has long been Hong Kong's largest trading partner, accounting for about half of Hong Kong's total trade by value. Hong Kong's natural resources are limited, and food and raw materials must be imported. As a result of China's easing of travel restrictions, the number of mainland tourists to the territory has surged from 4.5 million in 2001 to 34.9 million in 2012, outnumbering visitors from all other countries combined. Hong Kong has also established itself as the premier stock market for Chinese firms seeking to list abroad. In 2012 mainland Chinese companies constituted about 46.6% of the firms listed on the Hong Kong Stock Exchange and accounted for about 57.4% of the Exchange's market capitalization. During the past decade, as Hong Kong's manufacturing industry moved to the mainland, its service industry has grown rapidly. Credit expansion and tight housing supply conditions have caused Hong Kong property prices to rise rapidly; consumer prices increased by more than 4% in 2013. Lower and middle income segments of the population are increasingly unable to afford adequate housing. Hong Kong continues to link its currency closely to the US dollar, maintaining an arrangement established in 1983. In 2013, Hong Kong and China signed new agreements under the Closer Economic Partnership Agreement, adopted in 2003 to forge closer ties between Hong Kong and the mainland. The new measures, effective from January 2014, cover services and trade facilitation, and will improve access to the mainland's service sector for Hong Kong-based companies

Source : CIA

Company name and address

SHRENUJ FAR EAST LTD.

ADDRESS: 5/F., Kaiseng Commercial Centre, 4-6 Hankow Road, Tsimshatsui, Kowloon, Hong Kong.

PHONE: 852-2368 5589, 2186 2400

FAX: 852-2368 9116, 3543 1134

E-MAIL: dipan@inter-gemshk.com

vinod.shetye@shrenuj.com

MANAGEMENT

Managing Director: Mr. Milind Harendra Jhaveri

SUMMARY

Incorporated on: 15th October, 1997.

Organization: Private Limited Company.

Capital: Nominal:HK$501,000.00

Issued: HK$501,000.00

Business Category: Jewellery Trader.

Company Turnover: US$75.0 million (Year ended 31-03-2014) [Estimated]

Group Turnover: Rs 46,431.80 million (Year ended 31-03-2014)

Employees: 45. (Company)

1,700. (Group)

Main Dealing Banker: Hang Seng Bank Ltd., Hong Kong.

Banking Relation: Satisfactory.

ADDRESS

Registered Head Office:-

5/F., Kaiseng Commercial Centre, 4-6 Hankow Road, Tsimshatsui, Kowloon, Hong Kong.

Holding Company:-

Shrenuj (Mauritius) Pvt. Ltd., Mauritius.

Ultimate Holding Company:-

Shrenuj & Co. Ltd., India.

Associated/Affiliated Companies:-

Shrenuj Group of Companies

Alija International Pty. Ltd., Australia.

Arisia Jewellery Pvt. Ltd., India.

Astral Holding Inc., US.

Astral Jewels LLC, US.

Astral USA Inc, US.

Bernie’s International LLC, US.

C & A Diamonds International LLC, US.

Copem & Shrenuj, Italy.

Daily Jewellery Ltd., Hong Kong. [Trading as Joeliesse] (Same address)

Ever Gold (HK) Ltd., Hong Kong. (Same address)

Facet (Hong Kong) Ltd., Hong Kong. (Same address)

Global Marine Diamond Corporation, US.

Inala Metals & Minerals Pvt. Ltd., India.

Intergems H.K. Ltd., Hong Kong. (Same address)

Ithemba Diamonds (Pty) Ltd., South Africa.

Jomard SAS, France.

Kiara Jewellery (H.K.) Ltd., Hong Kong. (Same address)

Kiara Jewellery Pvt. Ltd., India.

Lume Group AG, Switzerland.

Shrenuj Australia Pty. Ltd., Australia.

Shrenuj Botswana Pty. Ltd., Botswana.

Shrenuj DMCC, UAE.

Shrenuj GmbH, Germany.

Shrenuj Japan Corporation, Japan.

Shrenuj Jewely (Far East) Ltd., Hong Kong.

Shrenuj Lifestyle Ltd., India.

Shrenuj N.V., Belgium.

Shrenuj Overseas Ltd., India.

Shrenuj Shanghai Ltd., China.

Shrenuj South Africa Pty. Ltd., South Africa.

Shrenuj USA LLC, US.

Simon Golub & Sons Inc., US.

SWA Trading Ltd., Israel.

Trapz LLC, US.

Uxolo Diamond Cutting Works (Pty) Ltd., South Africa.

BUSINESS REGISTRATION NUMBER

21311654

COMPANY FILE NUMBER

0626569

MANAGEMENT

Managing Director: Mr. Milind Harendra Jhaveri

CAPITAL

Nominal Share Capital: HK$501,000.00 (Divided into 501,000 shares of HK$1.00 each)

Issued Share Capital: HK$501,000.00

SHAREHOLDERS: (As per registry dated 15-10-2013)

Name		No. of shares
Shrenuj (Mauritius) Pvt. Ltd. St. James Court, Suite 308, St. Denis Street, Port Louis, Republic of Mauritius.		500,999
Smit Subhashbhai KOTHARI		1
		–––––––
	Total:	501,000 ======

DIRECTORS: (As per registry dated 15-10-2013)

Name (Nationality)	Address
Vishal Shreyas DOSHI	162, Neelamber, 37, Gopalrao Deshmukh Marg, Mumbai 400026, M.S., India.
Vinod Mahadeo SHETYE	C-0712, Harbourfront Horizon All-Suite Hotel, 8 Hung Luen Road, Hunghom Bay, Kowloon, Hong Kong.
Milind Harendra JHAVERI	Flat D, 46/F., Block T15, Crystal Cove, Caribbean Coast Ph4, Tung Chung, Lantau, Hong Kong.

SECRETARY: (As per registry dated 15-10-2013)

Name	Address	Co. No.
Cheng & Cheng Corporate Services Ltd.	Room 1201, 12/F., Allied Kajima Building, 138 Gloucester Road, Wanchai, Hong Kong.	0307222

HISTORY

The subject was incorporated on 15th October, 1997 as a private limited liability company under the Hong Kong Companies Ordinance.

Originally the subject was registered under the name of Inter-Gems (H.K.) Ltd., name changed to the present style on 8th August, 2013.

Formerly the subject was located at Room 707, 7/F., Kowloon Centre, 33 Ashley Road, Tsimshatsui, Kowloon, Hong Kong, moved to the present address in March 2004.

Apart from these, neither material change nor amendment has been ever traced and noted.

OPERATIONS

Activities: Importer, Exporter and Wholesaler.

Lines: All kinds of diamonds and jewellery products, emerald, precious stones, etc.

Employees: 45. (Company)

1,700. (Group)

Commodities Imported: India, Belgium, Israel, other European countries, etc.

Markets: Japan, other Asian countries, etc.

Company Turnover: US$72.8 million (Year ended 31-03-2012)

US$63.3 million (Year ended 31-03-2013)

US$75.0 million (Year ended 31-03-2014) [Estimated]

Group Turnover: Rs 24,565.15 million (Year ended 31-03-2011)

Rs 31,505.85 million (Year ended 31-03-2012)

Rs 38,621.47 million (Year ended 31-03-2013)

Rs 46,431.80 million (Year ended 31-03-2014)

Terms/Sales: L/C, T/T, etc.

Terms/Buying: L/C, T/T, D/P, etc.

MEMBERSHIP: The Hong Kong General Chamber of Commerce, Hong Kong.
[Membership No. HKI0277]

The Indian Chamber of Commerce Hong Kong, Hong Kong.

FINANCIAL INFORMATION

Nominal Share Capital: HK$501,000.00 (Divided into 501,000 shares of HK$1.00 each)

Issued Share Capital: HK$501,000.00

Mortgage or Charge (since 2008): (See attachment)

Company Net (Loss)/Profit:

US$0.5 million (Year ended 31-03-2012)

US$2.9 million (Year ended 31-03-2013)

US$3.2 million (Year ended 31-03-2014) [Estimated]

Group Profit After Taxation:-

Rs 542.48 million (Year ended 31-03-2011)

Rs 686.21 million (Year ended 31-03-2012)

Rs 751.40 million (Year ended 31-03-2013)

Rs 896.26 million (Year ended 31-03-2014)

Profit or Loss: Subject made profits in past three years.

Condition: Keeping in an active condition.

Facilities: Making active use of general banking facilities.

Payment: Met trade commitments as contracted.

Commercial Morality: Satisfactory.

Bankers:-

Hang Seng Bank Ltd., Hong Kong.

Bank of India, Hong Kong Branch.

ICICI Bank Ltd., Hong Kong Branch.

Punjab National Bank, Hong Kong Branch.

Standing: Very Good.

GENERAL

Having issued 501,000 ordinary shares of HK$1.00 each, Shrenuj Far East Ltd. is a subsidiary company of Shrenuj (Mauritius) Pvt. Ltd. which is a Mauritius-registered firm. The ultimate holding company of the subject Shrenuj & Co. Ltd. [Shrenuj] is an India-based firm.

Located at its operating address, the subject has had a number of associated companies while the main one is Shrenuj Jewelry (Far East) Ltd.

The subject is a diamond importer, exporter and wholesaler. It is dealing in jewellery diamonds ranging from 2 points to 2 carats, and in all colours — from D to L colours and all shades of brown. Products include single cuts, full cuts and fancy shapes — such as princess, baguettes, marquise, pearl, oval, emerald and heart. It is trading in the following products:-

Finished Jewellery

Diamond Jewellery

White Diamond Jewellery

Gem Set Jewellery

Emerald Jewellery

Ruby Jewellery

Sapphire Jewellery

Gold Jewellery

14K Gold Jewellery

18K Gold Jewellery

Fineness not Specified

Materials

Diamond

Polished White Diamond

Precious gemstones

Polished Ruby

Polished Sapphire

Findings

Chain

The subject is famous for its carat-size diamonds, loose diamonds, GIA diamonds, etc.

Rough diamonds are imported from India, Belgium, Israel and other European countries, etc. Polished and cut products are exported to Japan, Southeast Asia, the Middle East, etc. Business is rather active.

The subject also markets its product online. It sells its product via the website “BusyTrade.com”. The subject is a DTC Sight Holder.

Shrenuj is a listed firm with shares actively traded on Bombay Stock Exchange [BSE] and National Stock Exchange [NSE]. Shrenuj is one of the largest diamond and jewellery manufacturing companies in India having an international presence in 15 countries with a geographically diversified customer base, favourable economies of scale, ability to source roughs from strategic partners, growing retail presence and market linked production mix. Its activities are carried out in accordance with good corporate practices.

The followings were some the highlights for Shrenuj in 2013:

Shrenuj has increased its presence in the South-east Asia viz. Myanmar, Vietnam by adding more retail markets for Forevermark diamonds, apart from strongly growing markets such as China and Malaysia.

Commencing maiden retail outlet for jewellery at Gabarone Airport in the capital city of Botswana.

The Company has partnered with DTC for beta-testing of the prototype for screening small sized diamonds. In-house diamond testing laboratory set up with Automatic Melee Screening machine.

The Company has been focusing on strengthening its rough diamond sourcing, especially in key mining countries such as Botswana and South Africa.

The Company was ranked amongst top 500 companies listed by The Economic Times.

For the year ended 31st March, 2014, the income of the Shrenuj Group amounted to Rs 46,431.80 million (2013: Rs 38,621.47 million). Group profit after taxation for the year was Rs 896.26 million (2013: Rs 751.40 million). Overall business of the Group has been increasing.

In order to penetrate the international market further, the subject has taken part in fairs and exhibitions held in Hong Kong and other foreign large cities. For instance, it is going to take part in “HKTDC Hong Kong International Diamond, Gem & Pearl Show 2015” which will be held in Hong Kong AsiaWorld-Expo, Lantau, Hong Kong during the period of 2nd to 6th March, 2015. Its booth No. is AWE 2-M33.

The subject is fully supported by the Shrenuj Group.

Since the history of the subject in Hong Kong is over sixteen years, on the whole, consider it good for normal business engagements.

REMARKS

Property information of the company:-

1. Property Location: Carparking Space No. B84 at Basement 2 of Phase VI, Caribbean Coast, 1 Kin Tung Road, Tung Chung, Lantau Island, Hong Kong.

Owner: Inter-Gems (H.K.) Ltd.

Date of Purchase: n.a.

Purchased Price: n.a.

Incumbrances:-

Date of Mortgage	Amount Consideration	Mortgagee	Nature
30-09-2008	-	Hang Seng Bank Ltd., Hong Kong.	Mortgage to secure general banking facilities

2. Property Location: Carparking Space No. B85 at Basement 2 of Phase VI, Caribbean Coast, 1 Kin Tung Road, Tung Chung, Lantau Island, Hong Kong.

Owner: Inter-Gems (H.K.) Ltd.

Date of Purchase: n.a.

Purchased Price: n.a.

Incumbrances:-

Date of Mortgage	Amount Consideration	Mortgagee	Nature
30-09-2008	-	Hang Seng Bank Ltd., Hong Kong.	Mortgage to secure general banking facilities

MORTGAGE OR CHARGE

(Since 2008)

Date	Particulars	Amount
07-04-2008	Instrument: Debenture Property: 1) Assign to the Bank the proceeds of each policy of insurance 2) Charge to the Bank by way of a floating charge all shares, stock, bonds, debentures, certificates of deposit, promissory notes, warrants, futures, options, funds, units, notes and other securities 3) Charge to the Bank by way of floating charge all book debts and other debts 4) Charge to the Bank by way of floating charge all negotiable instruments 5) Charge to the Bank by way of floating charge all funds 6) Charge to the Bank by way of floating charge all chooses in action and claims Mortgagee: ICICI Bank Ltd., Hong Kong Branch.	All monies
30-09-2008	Instrument: Mortgage Property: 12/428,830th parts or shares of and in Tung Chung Town Lot No. 5 (Carparking Space No. B84 at Basement 2 of Phase VI, Caribbean Coast, 1 Kin Tung Road, Tung Chung, Lantau Island, Hong Kong.) Mortgagee: Hang Seng Bank Ltd., Hong Kong.	To secure all moneys in respect of general banking facilities
30-09-2008	Instrument: Mortgage Property: 12/428,830th parts or shares of and in Tung Chung Town Lot No. 5 (Carparking Space No. B85 at Basement 2 of Phase VI, Caribbean Coast, 1 Kin Tung Road, Tung Chung, Lantau Island, Hong Kong.) Mortgagee: Hang Seng Bank Ltd., Hong Kong.	To secure all moneys in respect of general banking facilities
07-10-2010	Instrument: Charge on Deposit Property: Account No. Sum Deposit Dated 6841000054 US$204,000.00 14-03-2010 6841000066 US$250,000.00 22-07-2010 6841000069 US$250,000.00 05-09-2010 Mortgagee: Punjab National Bank, Hong Kong Branch.	To secure all monies in respect of banking facilities
19-10-2011	Instrument: Supplemental Debenture Property: B way of a floating charge the whole of the Customer’s stocks of raw materials, goods-in-process, inventory, semi-finished goods, consumable stores and spares and other movables Mortgagee: ICICI Bank Ltd., Hong Kong Branch.	All monies
06-02-2012	Instrument: Property: All sums of Charge on Deposit: Money from time to time standing to the credit of the account of the Depositor Mortgagee: Punjab National Bank, Hong Kong Branch.	To secure All monies in respect of banking facilities owing at any time plus interest and all expenses

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 & 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.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.60.19
UK Pound	1	Rs.103.14
Euro	1	Rs.81.66

INFORMATION DETAILS

Analysis Done by :	SUM
Report Prepared by :	NIS

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%)

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