MIRA INFORM REPORT

Report No. :	328659
Report Date :	22.06.2015

IDENTIFICATION DETAILS

Name :	KAKADIYA BROTHERS
Registered Office :	C-404, Diamond World, Mini Bazar, Varachha Road, Surat-395006, Gujarat
Mobile No.:	91-9426382973
Country :	India
Financials (as on) :	31.03.2015 (Provisional)
Year of Establishment:	2007
Capital Investment / Paid-up Capital :	Rs.39.876 Million
TIN No.:	Not Available
IEC No.:	Not Available
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 :	Manufacturer, Exporter and Import of Diamond.
No. of Employees :	2000 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

Ba (42)

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 a partnership concern established in the year 2007. It is engaged in the business of manufacturing, exporting and importing of diamond. It has a satisfactory track record. Rating reflects sound operational profile with consistent growth in revenue but it has low profitability margin. Rating also takes into consideration established track record of business operations and above average financial base of the concern, Trade relations are reported as fair. Business is active. Payments terms are slow but correct. The concern can be considered normal for business dealings at usual trade terms and conditions.

NOTES :

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

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 31-03-2013.

INFORMATION PARTED BY

Name :	Mr. Hasmukhbhai Karamshibhai Kakadiya
Designation :	Partner
Contact No.:	91-9426382973
Date :	16.06.2015

LOCATIONS

Registered Office/ Head Office/ Factory :	C-404, Diamond World, Mini Bazar, Varachha Road, Surat-395006, Gujarat, India
Tel. No.:	Not Available
Mobile No.:	91-9426382973 (Mr. Hasmukhbhai Karamshibhai Kakadiya)
Fax No.:	Not Available
E-Mail :	kakadiya070@gmail.com
Branch Office :	EC – 1090, Bandra Kurla Complex, Bandra, Mumbai, Maharashtra, India
Factory 1 :	Ambika 1^st, 2^nd and 3^rd Floor, Mohan NI Chal, Varachha Road, Surat – 395006, Gujarat, India
Factory 2 :	2^nd floor, Parth Building, Kapodra, NR Sidhhakutir, Varachha Road, Surat – 395006, Gujarat, India
Factory 3 :	201, 2^nd floor, Apple Building, Building – B, Vasta Devadi Road, Opposite Community Hall, Katargram, Surat, Gujarat, India

PARTNERS

Name :	Mr. Hasmukhbhai Karamshibhai Kakadiya
Designation :	Partner
Name :	Mr. Pravinbhai Karamshibhai Kakadiya
Designation :	Partner
Name :	Mr. Jagdishbhai Karamshibhai Kakadiya
Designation :	Partner

KEY EXECUTIVES

Name :	Mr. Suborao
Designation :	Manager

BUSINESS DETAILS

Line of Business :	Manufacturer, Exporter and Import of Diamond.
Products :	Not Available
Brand Names :	Not Divulged
Agencies Held :	Not Divulged
Exports :
Products :	Diamond
Countries :	Hong Kong Belgium Bangkok Dubai Israel
Imports :
Products :	Rough Diamond
Countries :	Dubai Antwerp
Terms :
Selling :	Cash, Credit and L/C
Purchasing :	Cash, Credit and L/C

GENERAL INFORMATION

Suppliers :

Reference :	Glorious Germs - Belgium
Name of the Person :	Not Divulged
Contact No.:	Not Divulged
Since How Long Known :	Not Divulged
Maximum Limit Dealt :	Not Divulged
Experience :	Not Divulged
Remark:	Not Divulged

Customers :

Wholesalers And Retailers

Reference :	Viva Jewellery – Bang Kong
Name of the Person :	Not Divulged
Contact No.:	Not Divulged
Since How Long Known :	Not Divulged
Maximum Limit Dealt :	Not Divulged
Experience :	Not Divulged
Remark:	Not Divulged

No. of Employees :

2000 (Approximately)

Bankers :

Bank Name	Corporation Bank
Branch	Ring Road, Surat, Gujarat, India
Person Name (With Designation)	Mr. Suborao (Manager)
Contact Number	91-7043336622
Name of Account Holder	Kakadiya Brothers
Account Number	140007
Account Since (Date/Year of Account Opening)	9 Months
Average Balance Maintained (If Possible)	Rs. 30.000 Million
Credit Facilities Enjoyed (If any)	Cash and Credit
Account Operation	Satisfactory
Remarks (If any)	Transactions are fare.

• Cosmos Bank
• Corporation Bank

Facilities :

Secured Loan	31.03.2015 (Rs. in Million) (Provisional)	31.03.2014 (Rs. in Million)
Cholamandalam Investment and Finance Company Limited	0.000	9.982
Cosmos Bank – (M/c. Loan)	7.961	9.197
Corporation Bank	29.540	0.000
Corporation Bank - TL	19.720	0.000
Toyota Financial Service India Limited	2.127	0.000
Total	59.348	19.179

Financial Institute :	Toyota Financial Service India Limited
Auditors :
Name :	R. Dobariya and Company Chartered Accountants
Memberships :	Not Available
Collaborators :	Not Available
Sister Concern:	Kashiba Jewels, Surat, Gujarat, India Hasmukhbhai Karamshibhai Kakadiya, Surat, Gujarat, India

CAPITAL STRUCTURE

AS ON 31.03.2014

Capital Investment :
Owned :	Rs.39.876 Million
Borrowed :	----
Total :	Rs.39.876 Million

FINANCIAL DATA

[all figures are in Rupees Million]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2015 (Provisional)	31.03.2014	31.03.2013
SHAREHOLDERS FUNDS
1] Partners Capital		39.876	15.947	4.035
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		39.876	15.947	4.035
LOAN FUNDS
1] Secured Loans		59.348	19.179	10.551
2] Unsecured Loans		3.553	1.802	7.597
TOTAL BORROWING		62.901	20.981	18.148
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		102.777	36.928	22.183
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		42.234	13.135	0.766
INVESTMENT		0.098	0.098	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	238.356	54.663	21.752
	Receivable	70.948	24.463	1.767
	Advances on current account	4.478	1.111	9.805
	Cash & Bank Balances	1.934	1.899	2.467
Total Current Assets		315.716	82.136	35.791
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	251.498	57.097	13.971
	Provisions	2.846	1.344	0.403
	Other Current Liability	0.927	0.000	0.000
Total Current Liabilities		255.271	58.441	14.374
Net Current Assets		60.444	23.695	21.417
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		102.777	36.928	22.183

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2015 (Provisional)
	INCOME
		Sales	601.524
		Dividend Bank Shares	0.007
		Interest	0.058
		Vatav Kasar	0.000
		TOTAL	601.589
Less	EXPENSES
		Cost of Goods Sold	513.063
		Exchange Difference	5.077
		Agency Charges	0.179
		D.O And Others	0.598
		Electric Bill	2.760
		Factory Rent	0.864
		Labour Expenses	55.722
		Accounting Fees	0.050
		Audit Fees	0.050
		Bank Charges	0.011
		Bank Guarantee Charges	0.004
		Brokerage	1.494
		Conveyance	0.028
		Depreciation	4.025
		Electric Bill	0.447
		Export Realization Charges	0.132
		Import Payment Charges	0.376
		Income Tax	1.193
		Inspection Charges	0.007
		Interest	6.885
		Jewellery Block Policy	0.231
		Loan Foreclosure Charges	0.311
		Loan Processing charges	0.384
		Machinery Insurance	0.023
		Maintenance Expenses	0.119
		Membership	0.041
		Office Expenses	0.017
		Office rent	0.100
		Professional Tax	0.010
		Professional fees	0.038
		Property Tax	0.056
		Remuneration	1.500
		Rent	0.137
		Salary	2.264
		Travelling	1.152
		TOTAL	599.348
	NET PROFIT		2.241

	PARTICULARS		31.03.2014	31.03.2013
	INCOME
		Sales	190.296	97.385
		Other Income	0.031	0.350
		Closing Stock of Finished Goods	29.550	17.183
		TOTAL	219.877	114.918
Less	EXPENSES
		Opening Stock of Finished Goods	17.183	1.273
		Raw Materials Consumed	174.584	98.415
		Manufacturing Expenses	17.928	10.246
		General Sales and Administrative expenses	6.297	3.283
		Interest on Partner’s Capital	0.784	0.408
		Remuneration to partners	1.200	0.800
		TOTAL	217.976	114.425
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION		1.901	0.493
Less	DEPRECIATION/ AMORTISATION		1.188	0.084
	PROFIT BEFORE TAX		0.713	0.409
Less	TAX		0.240	0.132
	PROFIT AFTER TAX		0.473	0.277

Expected Sales (2015-16) : Rs. 800.000 Million

The above information has been parted by Mr. Hasmukhbhai Kakadiya (Partner)

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

KEY RATIOS

PARTICULARS		31.03.2015 (Provisional)	31.03.2014	31.03.2013
Net Profit Margin (PAT / Sales)	(%)	0.37	0.25	0.28
Return on Total Assets (PBT/Total Assets}	(%)	2.18	0.01	0.01
Return on Investment (ROI) (PBT/Networth)		0.05	0.04	0.10
Debt Equity Ratio (Total Debt /Networth)		1.57	1.88	4.49
Current Ratio (Current Asset/Current Liability)		1.23	0.32	0.61

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	4.035	15.947	39.876
Reserves & Surplus	0.000	0.000	0.000
Money received against share warrants	0.000	0.000	0.000
Share Application money pending allotment	0.000	0.000	0.000
Net worth	4.035	15.947	39.876
long-term borrowings	10.551	19.179	59.348
Short term borrowings	7.597	1.802	3.553
Total borrowings	18.148	20.981	62.901
Debt/Equity ratio	4.498	1.316	1.577

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	97.385	190.296	601.524
		95.406	216.099

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	97.385	190.296	601.524
Profit	0.277	0.473	2.241
	0.28%	0.25%	0.37%

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	No
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	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 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.

UNSECURED LOAN :

Unsecured Loan	31.03.2014 (Rs. in Million)	31.03.2014 (Rs. in Million)
Ansuyaben P. Kakadiya	0.000	0.238
Ashaben H. Kakadiya	0.000	0.408
D. S. Fashion	0.016	0.016
Drashti Diam	0.005	0.004
Jagdish K. Kakadiya	2.684	0.000
Karamshibhai S. Kakadiya	0.332	0.129
Karamshibhai S. Kakadiya (HUF)	0.000	0.332
Laxmanbhai Ghori	0.189	0.170
Phinix Impex	0.007	0.000
Madhuben J. Kakadiya	0.000	0.000
Mangalam Jewellers	0.000	0.000
Nilesh Mohanbhai Bhayani	0.000	0.000
Pradip Jhaveri	0.000	0.000
Sangitaben L. Gori	0.302	0.274
Urvi A. Jhaveri	0.000	0.000
Vaishali Gems	0.018	0.018
Vashrambhai H. Kakadiya	0.000	0.000
Om Fashion	0.000	0.213
Total	3.553	1.802

FIXED ASSETS :

Lath Machine

Rounding Machine

Semi Ghanti

Machinery

Double Spindle Machine

Diamond Sorting Machine

Ghat Machine

Wit Jambo Machine

Measurement Machine

Air Conditioner

Electric Motors

Security Systems

Computer and Printer

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.63.50
UK Pound	1	Rs.100.93
Euro	1	Rs.72.31

INFORMATION DETAILS

Information Gathered by :	DPA
Analysis Done by :	TRS
Report Prepared by :	DDD

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILITY	1~10	4
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	4
--RESERVES	1~10	5
--CREDIT LINES	1~10	4
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	NO
--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		42

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.