MIRA INFORM REPORT
|
Report No. : |
332278 |
|
Report Date : |
16.07.2015 |
IDENTIFICATION DETAILS
|
Name : |
KIRTILAL KALIDAS JEWELLERS PRIVATE LIMITED |
|
|
|
|
Registered
Office : |
601, Raja Street, Coimbatore – 641001, Tamilnadu |
|
Tel. No.: |
91-422-2398899 |
|
|
|
|
Country : |
India |
|
|
|
|
Financials (as
on) : |
31.03.2014 |
|
|
|
|
Date of
Incorporation : |
01.01.2008 |
|
|
|
|
Com. Reg. No.: |
014127 |
|
|
|
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Capital Investment
/ Paid-up Capital : |
Rs.10.000 Million |
|
|
|
|
CIN No.: [Company Identification
No.] |
U36911TZ2008PTC014127 |
|
|
|
|
TIN No.: |
33931760130 |
|
|
|
|
TAN No.: [Tax Deduction &
Collection Account No.] |
Not Available |
|
|
|
|
PAN No.: [Permanent Account No.] |
AAFFK3030K |
|
|
|
|
Legal Form : |
Private Limited Liability Company |
|
|
|
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Line of Business
: |
Retail trade in diamonds and gold jewellery. |
|
|
|
|
No. of Employees
: |
500 (Approximately) |
RATING & COMMENTS
|
MIRA’s Rating : |
Ba (48) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
Maximum Credit Limit : |
USD 2620000 |
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|
|
Status : |
Satisfactory |
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|
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Payment Behaviour : |
Usually correct |
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Litigation : |
Clear |
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Comments : |
Erstwhile, set up in 1939 as a partnership concern and reconstituted
as a private limited company in 2008, company derives its revenue from gold and
diamond jewellery retailing. It is established company having satisfactory
track. Rating on Kirtilal Kalidas Jewellers Private Limited (KKJPL) reflect,
its established regional market position and its promoters’ extensive
experience in the jewellery industry, The rating also factors in the company’s above-average financial risk
profile, marked by a healthy networth and comfortable debt protection
metrics. However, these rating strengths are partially offset by company
exposure to intense competition in the fragmented jewelry retailing industry
and to volatility in gold and diamond prices. Trade relations are fair. Business is active. Payment terms are
reported to be usually correct. In view of rich experienced of the promoters, the company 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 – 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 |
CRISIL |
|
Rating |
Long term bank facilities : BBB |
|
Rating Explanation |
Moderate degree of safety and moderate credit risk. |
|
Date |
December, 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
31-03-2013.
INFORMATION PARTED BY
|
Name : |
Mr. Manikanda |
|
Designation : |
Accounts Department |
|
Contact No.: |
91-422-2642188 |
|
Date : |
15.07.2015 |
LOCATIONS
|
Registered Office : |
601, Raja Street, Coimbatore – 641001, Tamilnadu, India |
|
Tel. No.: |
91-422-2398899 |
|
Fax No.: |
Not Available |
|
E-Mail : |
|
|
Location : |
Owned [Commercial] |
|
|
|
|
Corporate Office : |
11, G N Mills, Post Mettupalayam Road, Coimbatore - 641029, Tamilnadu, India |
|
|
|
|
Branch Office : |
Located At :
|
DIRECTORS
AS ON 06.10.2014
|
Name : |
Thangamuthu Shanthkumar |
|
Designation : |
Whole-time director |
|
Address : |
91, West Venkatasamy Road, R S Puram, Coimbatore - 641002,
Tamilnadu, India |
|
Date of Birth/Age : |
01.02.1949 |
|
Date of Appointment : |
01.01.2008 |
|
DIN No.: |
00012631 |
|
|
|
|
Name : |
Paresh Kirtilal Mehta |
|
Designation : |
Whole-time director |
|
Address : |
114, Tanhee Heights, Nepean Sea Raod, Mumbai – 400006, Maharashtra, India |
|
Date of Birth/Age : |
13.06.1951 |
|
Date of Appointment : |
01.01.2008 |
|
DIN No.: |
00004179 |
KEY EXECUTIVES
|
Name : |
Mr. Manikanda |
|
Designation : |
Accounts Department |
|
|
|
|
Name : |
Shantakumar Suraj |
|
Designation : |
Manager |
|
Address : |
91, West Venkatasamy Road, R S Puram, Coimbatore - 641002,
Tamilnadu, India |
|
Date of Birth/Age : |
02.04.1986 |
|
PAN No.: |
BBKPS6904H |
|
Date of Appointment : |
01.06.2013 |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
AS ON 06.10.2014
|
Names of Shareholders |
|
No. of Shares |
|
Thangamuthu Shanthkumar |
|
199990 |
|
Paresh Kirtilal Mehta |
|
49990 |
|
Shantakumar Suraj |
|
10 |
|
Pankaj Kirtilal Mehta |
|
30000 |
|
Kaushik Kirtilal Mehta |
|
219980 |
|
Maniben K Mehta Family Trust |
|
50000 |
|
Pankaj K Mehta Investment private limited, India |
|
300000 |
|
Paresh K Mehta Investment private limited, India |
|
150000 |
|
Seema K Mehta |
|
10 |
|
Neema K Mehta |
|
10 |
|
Paresh K Mehta |
|
10 |
|
Total |
|
1000000 |
Equity Share Break up (Percentage of Total Equity)
AS ON 06.10.2014
|
Category |
Percentage |
|
Bodies corporate |
45.00 |
|
Directors or relatives of Directors |
55.00 |
|
|
|
|
Total |
100.00 |
BUSINESS DETAILS
|
Line of Business : |
Retail trade in diamonds and gold jewellery. |
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Products : |
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Brand Names : |
Not Divulged |
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Agencies Held : |
Not Divulged |
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Exports : |
Not Divulged |
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Imports : |
Not Divulged |
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Terms : |
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Selling : |
Cash and Credit (60 days / 90 days) |
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Purchasing : |
Cash and Credit (60 days / 90 days) |
PRODUCTION STATUS : NOT AVAILABLE
GENERAL INFORMATION
|
Suppliers : |
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Customers : |
Retailers, End Users and OEMs
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No. of Employees : |
500 (Approximately) |
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Bankers : |
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Facilities : |
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Financial Institution : |
3i Infotech Trusteeship Services Limited, 3rd to 6th Floor, International Infotech Park, Tower No.5, Vashi Railway Station Complex, Vashi, Navi Mumbai - 400703, Maharashtra, India |
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|
|
|
Auditors : |
|
|
Name : |
Suri and Company Chartered Accountants |
|
Address : |
II Floor, AMM Buildings, 354, Mettupalayam Road, Coimbatore, Tamilnadu, India |
|
PAN No.: |
AABFS5023Q |
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|
|
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Memberships : |
-- |
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|
|
|
Collaborators : |
--- |
|
|
|
|
Enterprises which
are owned, or have significant influence of or are partners with Key
management personnel and their relatives : |
|
CAPITAL STRUCTURE
AS ON 31.03.2014
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
1,000,000 |
Equity Shares |
Rs.10/- each |
Rs.10.000 Million |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
1,000,000 |
Equity Shares |
Rs.10/- each |
Rs.10.000 Million |
FINANCIAL DATA
[all figures are
in Rupees Million]
ABRIDGED
BALANCE SHEET
|
SOURCES OF FUNDS |
31.03.2014 |
31.03.2013 |
31.03.2012 |
|
|
|
|
|
|
I.
EQUITY AND LIABILITIES |
|
|
|
|
(1)Shareholders' Funds |
|
|
|
|
(a) Share Capital |
10.000 |
10.000 |
10.000 |
|
(b) Reserves &
Surplus |
908.193 |
792.027 |
624.955 |
|
(c) Money received
against share warrants |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
(2) Share Application
money pending allotment |
0.000 |
0.000 |
0.000 |
|
Total Shareholders’ Funds
(1) + (2) |
918.193 |
802.027 |
634.955 |
|
|
|
|
|
|
(3) Non-Current
Liabilities |
|
|
|
|
(a) long-term borrowings |
298.154 |
297.187 |
336.722 |
|
(b) Deferred tax
liabilities (Net) |
0.000 |
0.000 |
0.000 |
|
(c) Other long term
liabilities |
0.000 |
0.000 |
0.000 |
|
(d) long-term provisions |
0.000 |
0.000 |
0.000 |
|
Total Non-current
Liabilities (3) |
298.154 |
297.187 |
336.722 |
|
|
|
|
|
|
(4) Current Liabilities |
|
|
|
|
(a) Short term borrowings |
1499.437 |
1460.770 |
1191.231 |
|
(b) Trade payables |
359.528 |
371.562 |
280.998 |
|
(c) Other current
liabilities |
98.641 |
104.473 |
81.046 |
|
(d) Short-term provisions |
18.629 |
108.703 |
20.267 |
|
Total Current Liabilities
(4) |
1976.235 |
2045.508 |
1573.542 |
|
|
|
|
|
|
TOTAL |
3192.582 |
3144.722 |
2545.219 |
|
|
|
|
|
|
II.
ASSETS |
|
|
|
|
(1) Non-current assets |
|
|
|
|
(a) Fixed Assets |
|
|
|
|
(i) Tangible assets |
128.752 |
157.635 |
146.494 |
|
(ii) Intangible Assets |
0.000 |
0.000 |
0.000 |
|
(iii) Capital
work-in-progress |
0.000 |
0.000 |
0.000 |
|
(iv) Intangible assets
under development |
0.000 |
0.000 |
0.000 |
|
(b) Non-current
Investments |
0.000 |
0.000 |
0.000 |
|
(c) Deferred tax assets
(net) |
10.997 |
8.945 |
4.680 |
|
(d) Long-term Loan and Advances |
19.648 |
22.017 |
21.795 |
|
(e) Other Non-current
assets |
5.129 |
5.751 |
6.663 |
|
Total Non-Current Assets |
164.526 |
194.348 |
179.632 |
|
|
|
|
|
|
(2) Current assets |
|
|
|
|
(a) Current investments |
6.000 |
0.000 |
0.000 |
|
(b) Inventories |
2782.787 |
2750.441 |
2120.075 |
|
(c) Trade receivables |
60.368 |
92.877 |
84.055 |
|
(d) Cash and cash
equivalents |
143.423 |
87.249 |
149.050 |
|
(e) Short-term loans and
advances |
35.478 |
19.807 |
12.407 |
|
(f) Other current assets |
0.000 |
0.000 |
0.000 |
|
Total Current Assets |
3028.056 |
2950.374 |
2365.587 |
|
|
|
|
|
|
TOTAL |
3192.582 |
3144.722 |
2545.219 |
PROFIT
& LOSS ACCOUNT
|
|
PARTICULARS |
31.03.2014 |
31.03.2013 |
31.03.2012 |
|
|
SALES |
|
|
|
|
|
Income |
|
5207.042 |
|
|
|
Other Income |
|
|
|
|
|
TOTAL |
4492.747 |
5207.042 |
4813.597 |
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
TOTAL |
4115.259 |
4670.883 |
4328.688 |
|
|
|
|
|
|
|
|
PROFIT/ (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND
AMORTISATION |
377.488 |
536.159 |
484.909 |
|
|
|
|
|
|
|
Less |
FINANCIAL EXPENSES |
182.811 |
152.700 |
120.337 |
|
|
|
|
|
|
|
|
PROFIT / (LOSS) BEFORE TAX,
DEPRECIATION AND AMORTISATION |
194.677 |
383.459 |
364.572 |
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION |
18.870 |
20.303 |
19.983 |
|
|
|
|
|
|
|
|
PROFIT/ (LOSS) BEFORE TAX, EXTRAORDINARY ITMES |
175.807 |
363.156 |
344.589 |
|
|
|
|
|
|
|
Less/ Add |
EXTRAORDINARY ITMES |
0.000 |
(10.000) |
0.000 |
|
|
|
|
|
|
|
|
PROFIT/ (LOSS) BEFORE TAX |
175.807 |
353.156 |
344.589 |
|
|
|
|
|
|
|
Less |
TAX |
59.640 |
115.888 |
112.855 |
|
|
|
|
|
|
|
|
PROFIT/ (LOSS) AFTER TAX
|
116.167 |
237.268 |
231.734 |
|
|
|
|
|
|
|
Add |
PREVIOUS YEARS’ BALANCE
BROUGHT FORWARD |
768.026 |
624.955 |
393.221 |
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
Transfer to General
Reserve |
0.000 |
24.000 |
0.000 |
|
|
Dividend |
0.000 |
60.000 |
0.000 |
|
|
Tax on Dividend |
0.000 |
10.197 |
0.000 |
|
|
|
|
|
|
|
|
Balance Carried to the
B/S |
884.193 |
768.026 |
624.955 |
|
|
|
|
|
|
|
|
EARNINGS IN FOREIGN
CURRENCY |
|
|
|
|
|
F.O.B. Value of Exports |
92.773 |
105.142 |
168.164 |
|
|
TOTAL EARNINGS |
92.773 |
105.142 |
168.164 |
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
Raw Materials |
3.082 |
28.510 |
845.859 |
|
|
Capital Goods |
0.000 |
0.463 |
0.000 |
|
|
TOTAL IMPORTS |
3.082 |
28.973 |
845.859 |
|
|
|
|
|
|
|
|
Earnings / (Loss) Per
Share (Rs.) |
116.17 |
237.27 |
-- |
|
PARTICULARS |
|
|
31.03.2015 |
|
Sales Turnover (Approximately) |
|
|
5000.000 |
Expected Sales ( 2015-2016 ) : Rs.5500.000
The above information has been parted by Mr. Manikanda.
CURRENT MATURITIES
OF LONG TERM DEBT DETAILS
|
Particulars |
31.03.2014 |
31.03.2013 |
31.03.2012 |
|
Current Maturities of Long term debt |
NA |
NA |
NA |
|
Cash generated from operations |
NA |
NA |
NA |
|
Net cash flows from (used in) operations |
173.559 |
(130.652) |
NA |
KEY
RATIOS
|
PARTICULARS |
|
31.03.2014 |
31.03.2013 |
31.03.2012 |
|
Net Profit Margin (PAT / Total Income) |
(%) |
2.59 |
4.56 |
4.81 |
|
|
|
|
|
|
|
Operating Profit Margin (PBIDT/Sales) |
(%) |
8.40 |
10.30 |
10.07 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
5.53 |
11.26 |
13.56 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.19 |
0.44 |
0.54 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Debt /Networth) |
|
1.96 |
2.19 |
2.41 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
1.53 |
1.44 |
1.50 |
FINANCIAL ANALYSIS
[all figures are
in Rupees Million]
DEBT EQUITY RATIO
|
Particular |
31.03.2012 |
31.03.2013 |
31.03.2014 |
|
|
(Rs. In Million) |
(Rs. In Million) |
(Rs. In Million) |
|
Share Capital |
10.000 |
10.000 |
10.000 |
|
Reserves & Surplus |
624.955 |
792.027 |
908.193 |
|
Share Application money
pending allotment |
0.000 |
0.000 |
0.000 |
|
Net worth |
634.955 |
802.027 |
918.193 |
|
|
|
|
|
|
long-term borrowings |
336.722 |
297.187 |
298.154 |
|
Short term borrowings |
1191.231 |
1460.770 |
1499.437 |
|
Total borrowings |
1527.953 |
1757.957 |
1797.591 |
|
Debt/Equity ratio |
2.406 |
2.192 |
1.958 |
YEAR-ON-YEAR GROWTH
|
Year on Year Growth |
31.03.2012 |
31.03.2013 |
31.03.2014 |
|
|
(Rs. In Million) |
(Rs. In Million) |
(Rs. In Million) |
|
Sales |
4813.597 |
5207.042 |
4492.747 |
|
|
|
8.174 |
(13.718) |
NET PROFIT MARGIN
|
Net Profit Margin |
31.03.2012 |
31.03.2013 |
31.03.2014 |
|
|
(Rs. In Million) |
(Rs. In Million) |
(Rs. In Million) |
|
Sales |
4813.597 |
5207.042 |
4492.747 |
|
Profit |
231.734 |
237.268 |
116.167 |
|
|
4.81% |
4.56% |
2.59% |
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 |
Yes |
|
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) |
No |
|
16 |
No. of employees |
Yes |
|
17 |
Details of sister concerns |
Yes |
|
18 |
Major suppliers |
No |
|
19 |
Major customers |
No |
|
20 |
Banking Details |
Yes |
|
21 |
Banking facility details |
Yes |
|
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 |
Yes |
|
26 |
Turnover of firm for last three years |
Yes |
|
27 |
Reasons for variation <> 20% |
-- |
|
28 |
Estimation for coming financial year |
Yes |
|
29 |
Profitability for last four years |
Yes |
|
30 |
Major shareholders, if available |
Yes |
|
31 |
External Agency Rating, if available |
Yes |
|
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 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.
-
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 –
-
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
|
PARTICULARS |
31.03.2014 (Rs.
in Million) |
31.03.2013 (Rs.
in Million) |
|
Long-term
Borrowings |
|
|
|
Intercorporate borrowings |
190.676 |
190.676 |
|
Deposits from shareholders |
32.955 |
32.169 |
|
Loans and advances from directors |
71.655 |
71.638 |
|
Loans and advances from others |
2.868 |
2.704 |
|
Total |
298.154 |
297.187 |
FINANCIAL RESULTS
In the current financial year, there has been a significant drop in the volume of business due to various restrictions made by the Government of India in relation to import of gold. Hence there has been overall drop in the top line of the company to the extent of 14%. The dip in the overall turnover has pushdown profit after tax during the financial year under review by 49% as compared the profit after tax earned during the previous financial year. During this year under consideration, due to drop in the gold purchase price, the company has not earned any stock profit that brought down PAT of the company to a significant level. The weighted average gold purchase price dropped to Rs. 2,657 per gram as against the previous years weighted average price of Rs. 2,793 per gram which has brought down the overall stock profit to the extent of Rs. 119.000 Million during the financial year. Due to the aggregative selling and buying strategy of the management the operating profit during the year under consideration has increased by 1.20% over the ratio of operating profit to the turnover of the previous financial year. The increase in the interest rate on the bank borrowings, due to the monetary policy of the Reserve Bank of India, has also affected considerably the PAT of the company of this financial year.
PERFORMANCE
The financial year was one of challenging year due to the various restrictive policies adopted by the Government of India relating to gold import and due to poor economic performance of the Indian economy. The Government of India with the objective to control current account deficit, which has been ballooned $ 87.8 billion in the financial year ending 2012-13 which represents 4.7% of the GDP, initiated various policy measures which were all having impact on the availability of gold in the market. The Government of India has, apart from making hike in import duty to 10%, also formulated 80:20 gold import scheme effective from 14th August, 2013. Under this policy import of gold is permitted subject to the condition that a minimum of 20% of total quantity of gold imported should compulsorily be used for export purpose. Because of the above restrictive policy, availability of gold to organised jewellery retailers became scare and created a favourable situation to un-organised jewellery retailers as they were able to obtain required quantity of gold in other channels. The non-transparent jewellery retailers were able to procure required quantity of gold at a price lower than the market price through a different channels of sourcing and that that kind of channels were not explored by jewellers who carry on their business affairs in a transparent manner. A portion of additional surplus earned by non-transparent jewellers out of gold procured, as above, had been shared with buyers which have affected gold jewellery business of transparent jewellery retailers. As about sixty percent of Indias gold market remains unregulated, the above method of sourcing of gold has made a big dent in the business volume of transparent jewellery retailers. According to the estimation made by the World Gold Council unofficial import could be as high as 200 tonnes in the Financial Year 2014 which is more than 35% of the gold imported through legal channel .
Import of gold in the Financial Year ending 2014 was at six years low of 571 tonnes, lowest after 2007-08. In the month of March-14, the import of gold stood at 50 tonnes taking the January March-14 quarter total import of gold to 115 tonnes, about 125% more than September Decemebr-13 quarter. Had the import in the month of March-14 quarter not improved so, the import of gold into India would have fallen to decadal low. Because of the above restrictions imposed by the Government on inbound shipments of precious metals, total value of gold and silver imports declined by 40% to $ 33.46 billion in the financial year 2013-14 as against the value of gold and silver imported $ 55.79 billions during the previous financial year 2012-13. All India Gems and Jewellery Federation estimated that the overall business of gold jewellery trade was down by 20 40 percent during this financial year when compared the business carried out in the country during the previous financial year.
The restrictive gold import policy has brought a situation where there has been a mismatch of demand and supply of gold in the organised market and this has pushed up the spot delivery premium to a record level of $ 160 per tray ounce. The dismal economic performance of the country which pulled down the GDP growth to 5% which fuelled the plight of Gem and Jewell industry since the purchasing power of potential customers had been eroded drastically.
In view of the uncertainty in the general economic growth and due to adoption of restrictive gold import policy by the Government, the management had been cautious in carrying out its expansion programme. The management has handled effectively gold shortage situation by focussing on selling gold jewelleries with exclusive design and melted slow moving jewelleries. The above action of the management has brought down the quantity of gold jewellery stock at the retail stores during the major part of the financial year 2013-14. The management has made periodic review of its selling price strategy and adjusted its selling price in tune with prevailing market price by carrying out market survey. The pricing strategy coupled with focuses on crafting jewellery with exclusive design has brought the desired result of improving operating profit of the company during this year.
FUTURE PLANS:
The abnormal growth of Bangalore city has made the present location of existing Bangalore became disadvantageous as customers found it very difficult to come to the store by manoeuvring traffic congestion which resulted in poor walk-ins. Hence the management has taken a decision to shift the store to a new prominent location. After making detailed analysis of various options in locating the store at a new location the management corned Bangalore Jai Nagar area as the desirable place and is in the process of shifting the existing Bangalore store from Richmond Circle to a new premises at Jai Nagar. The floor space of the new store is about 7,650 square feet as against the present stores floor space of 5,740 square feet. The management has drawn up plans to improve the performance of the store with increase in the inventory level and by having proper mix of diamond and gold jewelleries. The operation of the new store is expected to be commenced in the second week of August-2014. The management has also plans to penetrate into second tier cities by opening small format stores with the objective of improving its turnover and market share. The above plans are expected to bring desired results in the ensuing period by bring down its overall fixed cost as a proportion to total sales.
There is also positive sign in the economic growth of the country and hence the management is hopeful that there would be a significant improvement in the performance of the company in the current financial year 2014-15. However continuation of various restrictions relating to gold import is causing concern. In the June quarter of this current financial year, there has been a temporary hike in the gold import which might have unnerved the Government enough to retain import duty and import curbs in the form of export obligation. It has been reported that, even at the elevated levels of gold imports, the current account deficit is likely to be comfortable at under 2% in the Financial Year ending 2015. Hence the management is of the view that required quantity of gold would be made available to organised sectors in the ensuing periods and hence optimistic about its growth prospect during the financial year 2014-15.
The management is taking various initiatives for improving the growth of the company and as part it has launched a signature collection called Jewell Regale in its seventy fifth years celebration. In this collection each piece of jewellery designed to its perfection by well experienced designers in India and Italy. The management has also plans to enter into aggressive marketing and for this purpose it is contemplating to enter into new channels of marketing. Also plans are under way to revamp merchandising plans with more focus on jewelleries with exclusive designs and for this purpose a consultant with expertise knowledge has been engaged. The consultant has been entrusted with the task of determining optimum inventory level with fast moving jewelleries with unique design at each store. The management is started implanting the various recommendations made by the consultant in the current financial year 2014-15 and hence the benefits would be expected to arise with effect from this current financial year.
FINANCE
The financial position of the company is comfortable and all the bankers with whom the company borrow funds for its working capital are supportive and extended their best co-operation during this year. The Credit Rating Agency CRISIL has given an improved credit rating for the bank borrowings of the company over the previous years rating made by CARE.
FIXED ASSETS
- Land
- Buildings
- Plant and equipment
- Furniture and fixtures
- Vehicles
- Office equipment
- Computer equipments
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
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.63.83 |
|
|
1 |
Rs.99.13 |
|
Euro |
1 |
Rs.69.69 |
INFORMATION DETAILS
|
Information
Gathered by : |
MNJ |
|
|
|
|
Analysis Done by
: |
KAS |
|
|
|
|
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 |
5 |
|
--PROFITABILITY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
5 |
|
--LEVERAGE |
1~10 |
5 |
|
--RESERVES |
1~10 |
6 |
|
--CREDIT LINES |
1~10 |
5 |
|
--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 |
NO |
|
--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 |
-- |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or
its officials.