MIRA INFORM REPORT

Report No. :	353032
Report Date :	08.12.2015

IDENTIFICATION DETAILS

Name :	SANGHAVI AND SONS
Registered Office :	EC-7070, Centre Core, E-Tower, Bharat Diamond Bourse, Bandra Kurla Complex, Bandra (East), Mumbai – 400051, Maharashtra
Tel. No.:	91-22-40309999
Country :	India
Financials (as on) :	31.03.2015
Year of establishment :	1981
Capital Investment / Paid-up Capital :	Rs. 390.974 Million
IEC No.:	0388031492
TAN No.: [Tax Deduction & Collection Account No.]	Not Available
PAN No.: [Permanent Account No.]	AAAFS3192F
Legal Form :	Partnership Concern with an Unlimited Liability of the Partners
Line of Business :	Manufacturer, Exporter and Importer of Diamond (Confirmed by management)
No. of Employees :	190 (Approximately) [In office: 50; In factory: 140]

RATING & COMMENTS

MIRA’s Rating :

Ba (47)

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 old partnership concern established in the year 1981. It is a manufacturer, Exporter and Importer of Diamonds. It has satisfactory track. As per the available financials of the year 2015, the concern has reported marginal decline in its sales revenue base, however it has maintain fair profit margin. Further, Mr. Harish (Accounts Head) claimed that the decrease in sales was due to unfavorable market fluctuations. Trade relations are fair. Business is active. Payment terms are reported to be slow but correct. In view of sound business operations, the concern can be considered for business dealings with 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 – March 31, 2015

Country Name	Previous Rating (31.12.2014)	Current Rating (31.03.2015)
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	Not Available
Rating	Not Available
Rating Explanation	Not Available
Date	Not Available

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 31-03-2015.

INFORMATION PARTED BY

Name :	Mr. Harish
Designation :	Accounts Head
Contact No.:	91-22-40773500
Date :	03.12.2015

LOCATIONS

Registered Office :	EC-7070, Centre Core, E-Tower, Bharat Diamond Bourse, Bandra Kurla Complex, Bandra (East), Mumbai – 400051, Maharashtra, India
Tel. No.:	91-22-40309999
Mobile No.:	91-9892956156
Fax No.:	91-22-23630716
E-Mail :	accounts@sanghvisons.com
Website :	http://www/sanghavisons.com
Location :	Owned
Factory :	7/4/55, Sunder Sadan, Suthar Falia, Galemandi, Surat – 395003, Gujarat, India

PARTNERS

Name :	Mr. Mohanlal B. Sanghavi
Designation :	Partner
Date of Birth/Age :	69 Years
Qualification :	S.S.C.
Name :	Mr. Roshan T. Sanghavi
Designation :	Partner
Date of Birth/Age :	29 Years
Qualification :	Graduate
Name :	Mr. Dhanesh M. Sanghavi
Designation :	Partner
Date of Birth/Age :	34 Years
Qualification :	Graduate

KEY EXECUTIVES

Name :	Mr. Harish
Designation :	Accounts Head

BUSINESS DETAILS

Line of Business :	Manufacturer, Exporter and Importer of Diamond (Confirmed by management)
Products :	Not Available
Brand Names :	Not Available
Agencies Held :	Not Available
Exports :
Products :	Diamond
Countries :	USA Japan Israel
Imports :
Products :	Diamond
Countries :	Belgium Israel
Terms :
Selling :	Cash and Credit (30/60 days)
Purchasing :	Cash and Credit (30/60 days)

GENERAL INFORMATION

Suppliers :

Reference :	Aliza Diamonds NV, Belgium
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 :	Rosy Blue Private Limited – Kandivali, Mumbai, Maharashtra, India
Name of the Person :	Not Divulged
Contact No.:	91-22-66650000
Since How Long Known :	Not Divulged
Experience :	Not Divulged
Maximum Limit Dealt :	Not Divulged
Remark :	We spoke to in purchase department, but he was busy, he told me call back tomorrow.

No. of Employees :

190 (Approximately) [In office: 50; In factory: 140]

Bankers :

Banker Name	Bank of Baroda
Branch Address	Opera House, Kantilal House, 14 Mama Paramananda Marg, Mumbai – 400004, Maharashtra, India
Person Name (With Designation)	Not Divulged
Contact Number	91-22-23888748
Name of Account Holder	Not Divulged
Account Number	Not Divulged
Account Since (Date/Year of Account Opening)	Not Divulged
Average Balance Maintained (If Possible)	Not Divulged
Credit Facilities Enjoyed (If any)	Not Divulged
Account Operation	Not Divulged
Remarks (If any)	Continuously Ringing

Banker Name	Allahabad Bank
Branch Address	T-4, World Trade Centre, 2^nd Floor, Cuffe Parade, Colaba, Mumbai – 400005, Maharashtra, India
Person Name (With Designation)	Not Divulged
Contact Number	91-22-22182113
Name of Account Holder	Not Divulged
Account Number	Not Divulged
Account Since (Date/Year of Account Opening)	Not Divulged
Average Balance Maintained (If Possible)	Not Divulged
Credit Facilities Enjoyed (If any)	Not Divulged
Account Operation	Not Divulged
Remarks (If any)	Continuously Ringing

Auditors :
Name :	Ramesh Rajni and Company Chartered Accountants
Memberships :	--
Collaborators :	--
Sister Concern :	T. Sanghavi Exports Sanghavi Gems Private Limited

CAPITAL STRUCTURE

AS ON 31.03.2015

Capital Investment :
Owned :	Rs. 390.974 Million
Borrowed :	--
Total :	Rs. 390.974 Million

FINANCIAL DATA

[all figures are in Rupees Million]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2015	31.03.2014	31.03.2013
SHAREHOLDERS FUNDS
1] Share Capital		390.974	398.800	343.131
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		390.974	398.800	343.131
LOAN FUNDS
1] Secured Loans		751.688	540.541	547.711
2] Unsecured Loans		0.000	0.000	0.200
TOTAL BORROWING		751.688	540.541	547.911
DEFERRED TAX LIABILITIES		1.220	1.083	0.424
TOTAL		1143.882	940.424	891.466
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		103.832	108.777	104.613
Capital work-in-progress		0.000	0.000	0.000
INVESTMENT		0.173	0.073	10.873
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	1063.708	1148.224	1207.822
	Sundry Debtors	480.517	490.619	412.681
	Cash & Bank Balances	12.221	50.441	57.291
	Other Current Assets	4.974	5.145	7.532
	Loans & Advances	38.286	9.742	11.459
Total Current Assets		1599.706	1704.171	1696.785
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	0.000	0.000	0.000
	Other Current Liabilities	555.942	872.341	920.567
	Provisions	3.887	0.256	0.238
Total Current Liabilities		559.829	872.597	920.805
Net Current Assets		1039.877	831.574	775.980
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		1143.882	940.424	891.466

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2015	31.03.2014	31.03.2013
	SALES
		Income	3013.945	3824.147	2617.909
		Other Income	0.000	0.000	0.000
		TOTAL	3013.945	3824.147	2617.909
			(Due to Market Fluctuation)
Less	EXPENSES
		Raw Material Consumed	2202.445	3325.672	2429.683
		Increase/(Decrease) in Stock of Finished Goods	464.764	144.621	(103.540)
		Manufacturing Expenses	76.677	68.935	61.623
		General Sales and Administrative Expenses	143.941	159.413	104.186
		Salary to Partner	3.240	3.240	3.240
		TOTAL	2891.067	3701.881	2495.192
	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION		122.878	122.266	122.717
Less	FINANCIAL EXPENSES		27.485	22.545	25.285
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION		95.393	99.721	97.432
Less/ Add	DEPRECIATION/ AMORTISATION		9.550	10.482	7.921
	PROFIT BEFORE TAX		85.843	89.239	89.511
Less	TAX		29.420	32.821	27.801
	PROFIT AFTER TAX		56.423	56.418	61.710

KEY RATIOS

PARTICULARS		31.03.2015	31.03.2014	31.03.2013
Net Profit Margin (PAT / Sales)	(%)	1.87	1.48	2.36
Operating Profit Margin (PBIDT/Sales)	(%)	4.08	3.20	4.69
Return on Total Assets (PBT/Total Assets}	(%)	21.96	22.38	26.09
Return on Investment (ROI) (PBT/Networth)		0.22	0.22	0.26
Debt Equity Ratio (Total Debt /Networth)		1.92	1.36	1.60
Current Ratio (Current Asset/Current Liability)		2.86	1.95	1.84

FINANCIAL ANALYSIS

[all figures are in Rupees Million]

DEBT EQUITY RATIO

Particular	31.03.2013	31.03.2014	31.03.2015
	(Rs. In Million)	(Rs. In Million)	(Rs. In Million)
Share Capital	343.131	398.800	390.974
Reserves & Surplus	0.000	0.000	0.000
Share Application money pending allotment	0.000	0.000	0.000
Net worth	343.131	398.800	390.974
Secured Loan	547.711	540.541	751.688
Unsecured Loan	0.200	0.000	0.000
Current Maturities of Long Term Debt	0.000	0.000	0.000
Total borrowings	547.911	540.541	751.688
Debt/Equity ratio	1.597	1.355	1.923

YEAR-ON-YEAR GROWTH

Year on Year Growth	31.03.2013	31.03.2014	31.03.2015
	(Rs. In Million)	(Rs. In Million)	(Rs. In Million)
Sales	2617.909	3824.147	3013.945
		46.076	(21.186)

NET PROFIT MARGIN

Net Profit Margin	31.03.2013	31.03.2014	31.03.2015
	(Rs. In Million)	(Rs. In Million)	(Rs. In Million)
Sales	2617.909	3824.147	3013.945
Profit	61.710	56.418	56.423
	2.36%	1.48%	1.87%

LOCAL AGENCY FURTHER INFORMATION

Sr. No.	Check list by info agents	Available in Report (Yes/No)
1	Year of establishment	Yes
2	Constitution of the entity -Incorporation details	Yes
3	Locality of the entity	Yes
4	Premises details	No
5	Buyer visit details	--
6	Contact numbers	Yes
7	Name of the person contacted	Yes
8	Designation of contact person	Yes
9	Promoter’s background	Yes
10	Date of Birth of Proprietor / Partners / Directors	No
11	Pan Card No. of Proprietor / Partners	No
12	Voter Id Card No. of Proprietor / Partners	No
13	Type of business	Yes
14	Line of Business	Yes
15	Export/import details (if applicable)	Yes
16	No. of employees	Yes
17	Details of sister concerns	Yes
18	Major suppliers	Yes
19	Major customers	Yes
20	Banking Details	Yes
21	Banking facility details	No
22	Conduct of the banking account	--
23	Financials, if provided	Yes
24	Capital in the business	Yes
25	Last accounts filed at ROC, if applicable	No
26	Turnover of firm for last three years	Yes
27	Reasons for variation <> 20%	Yes
28	Estimation for coming financial year	No
29	Profitability for last three years	Yes
30	Major shareholders, if available	No
31	External Agency Rating, if available	No
32	Litigations that the firm/promoter involved in	--
33	Market information	--
34	Payments terms	Yes
35	Negative Reporting by Auditors in the Annual Report	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 & 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 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. 66.63
UK Pound	1	Rs. 100.65
Euro	1	Rs. 72.40

INFORMATION DETAILS

Information Gathered by :	SPR
Analysis Done by :	KIN
Report Prepared by :	JYO

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILITY	1~10	4
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--RESERVES	1~10	5
--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		47

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.