MIRA INFORM REPORT

Report No. :	350588
Report Date :	19.11.2015

IDENTIFICATION DETAILS

Name :	CHOICE DIAMOND
Registered Office :	CC-4101, Bharat Diamond Bourse, Bandra Kurla Complex, Bandra (East), Mumbai – 400015, Maharashtra
Tel. No.:	91-22-23673289/ 90/ 23681911
Country :	India
Financials (as on) :	31.03.2015
Year of Establishment :	1991
Capital Investment :	Rs. 687.120 Million
IEC No.:	0391157736
TAN No.: [Tax Deduction & Collection Account No.]	MUMC04133D
PAN No.: [Permanent Account No.]	AAAFC0677R
Legal Form :	Partnership Concern with an Unlimited Liability of the Partners
Line of Business :	Manufacturer, Exporter and Importer of Diamonds.
No. of Employees :	417 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

Ba (44)

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 and established partnership concern established in the year 1991. It has satisfactory track record. As per available financial of the year 2015, the concern has reported marginal decrease in its sales turnover and profit. However, it possesses satisfactory capital structure marked by comfortable debt level in the same consecutive year. Trade relations are fair. Business is active. Payment terms are reported to be slow but correct. In view of long track record of 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.

EXTERNAL AGENCY RATING

Rating Agency Name	ICRA
Rating	Short term Fund based limit = A3
Rating Explanation	Moderate degree of safety and higher credit risk.
Date	September 2015

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. Dalpat Purohit
Designation :	Accountant
Contact No.:	91-9867839490
Date :	17.11.2015

LOCATIONS

Registered Office :	CC-4101, Bharat Diamond Bourse, Bandra Kurla Complex, Bandra (East), Mumbai – 400015, Maharashtra, India
Tel. No.:	91-22-23673289/ 90/ 23681911
Mobile No.:	91-9867839490 (Mr. Dalpat Purohit)
Fax No.:	91-22-23682881
E-Mail :	accounts@choicediamond.in info@choicediamond.in
Website :	http://www.choicediamond.in
Area :	1225 Sq. ft.
Location :	Owned
Locality :	Commercial
Factory :	H-40, 41 and 42, Diamond House, Kesarba Market, Gotalawadi, Katargam, Surat – 395004, Gujarat, India
Tel. No.:	91-261-2531600
Fax No.:	91-261-2531200
Location :	Owned
Locality :	Commercial
Branch Office :	CC-3020, C-Tower, Bharat Diamond Bourse, Bandra Kurla Complex, Bandra [East], Mumbai – 400051, Maharashtra, India

PARTNERS

Name :	Mr. Jhabbarmal Hanumanmal Dugar
Designation :	Partner
Name :	Mr. Bharatkumar Hanumanmal Dugar
Designation :	Partner
Name :	Mr. Shantilal Hanumanmal Dugar
Designation :	Partner
Name :	Mr. Chand Ratan Dugar
Designation :	Partner
Name :	Mr. Akshaykumar B Dugar
Designation :	Partner

KEY EXECUTIVES

Name :	Mr. Dalpat Purohit
Designation :	Accountant

BUSINESS DETAILS

Line of Business :	Manufacturer, Exporter and Importer of Diamonds.
Brand Names :	--
Agencies Held :	--
Exports :
Products :	Diamonds
Countries :	· USA · Japan · Belgium · Hong Kong · Israel
Imports :
Products :	Raw Material
Countries :	· Belgium · Israel · Hong Kong
Terms :
Selling :	Cash, L/C and Credit
Purchasing :	Cash, L/C and Credit

GENERAL INFORMATION

Suppliers :

Reference:	Dirough NV, Belgium
Name of the Person (Designation):	Not Divulged
Contact Number:	Not Divulged
Since how long known:	Not Divulged
Maximum limit dealt:	Not Divulged
Experience:	Not Divulged
Remark	Not Divulged

· Thaishan Gems, Hong Kong

Customers :

Wholesalers, Retailers and End Users

Reference:	ATS Diamonds 2008 Limited
Name of the Person (Designation):	Not Divulged
Contact Number:	Not Divulged
Since how long known:	Not Divulged
Maximum limit dealt:	Not Divulged
Experience:	Not Divulged
Remark	Not Divulged

No. of Employees :

417 (Approximately)

Bankers :

Bank Name:	State Bank of Bikaner and Jaipur
Branch:	Videocon Heritage, 1^st Floor, Charanjit Rai Marg, D.N. Road, Fort, Mumbai - 400001, Maharashtra, India
Person Name (with Designation):	Mr. G.R. Joshi [Chief Manager]
Contact Number:	91-22-22630624
Name of Account Holder:	Choice Diamond
Account Number:	Not Divulged
Account Since (Date/ Year of A/c Opening):	More than 10 Years
Average Balance Maintained (Optional):	Not Divulged
Credit Facilities Enjoyed (CC/OD/Term Loan):	Export Finance = Rs. 336.000 Million
Account Operation:	Satisfactory
Remarks: Banker gave us positive response about subject company they are satisfied with their Banking transaction.

· IndusInd Bank

Mumbai, Maharashtra, India

Auditors :
Name :	Mr. Rajendra B. Shah Chartered Accountant
Address :	Opera House, Mumbai, Maharashtra, India
Memberships :	--
Collaborators :	--
Associates/Subsidiaries :	Not Available

CAPITAL STRUCTURE

AS ON 31.03.2015

Capital Investment :
Owned :	Rs. 687.120 Million
Borrowed :	--
Total :	Rs. 687.120 Million

FINANCIAL DATA

[all figures are in Rupees Million]

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

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2015	31.03.2014	31.03.2013
SHAREHOLDERS FUNDS
1] Partners Capital		687.120	644.711	570.698
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		687.120	644.711	570.698
LOAN FUNDS
1] Secured Loans		681.032	748.833	686.271
2] Unsecured Loans		5.743	5.280	1.605
TOTAL BORROWING		686.775	754.113	687.876
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		1373.895	1398.824	1258.574
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		105.910	122.275	128.095
Capital work-in-progress		0.000	0.000	0.000
INVESTMENT		0.010	0.010	0.010
DEFERRED TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	1491.278	1495.218	1029.070
	Sundry Debtors	265.202	396.603	338.473
	Cash & Bank Balances	73.827	78.672	54.053
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	18.087	8.804	16.310
Total Current Assets		1848.394	1979.297	1437.906
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	580.419	702.758	307.437
	Other Current Liabilities	0.000	0.000	0.000
	Provisions	0.000	0.000	0.000
Total Current Liabilities		580.419	702.758	307.437
Net Current Assets		1267.975	1276.539	1130.469
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		1373.895	1398.824	1258.574

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2015	31.03.2014	31.03.2013
	SALES
		Sales	2295.946	2457.168	2121.797
		Other Income	0.555	0.336	0.336
		TOTAL (A)	2296.501	2457.504	2122.133
Less	EXPENSES
		Cost of Sales	2093.203	2204.951	1923.992
		Payment and Provision for employees	5.456	4.506	4.476
		Administrative and Other Expenses	57.779	52.295	46.231
		Partners Remuneration	19.548	19.548	19.548
		TOTAL (B)	2175.986	2281.300	1994.247
	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		120.515	176.204	127.886
Less	FINANCIAL EXPENSES (D)		35.951	35.645	22.287
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		84.564	140.559	105.599
Less/ Add	DEPRECIATION/ AMORTISATION (F)		20.359	25.442	21.421
	PROFIT BEFORE TAX (E-F) (G)		64.205	115.117	84.178
Less	TAX (H)		22.059	39.145	26.044
	PROFIT AFTER TAX (G-H) (I)		42.146	75.972	58.134

KEY RATIOS

PARTICULARS		31.03.2015	31.03.2014	31.03.2013
Net Profit Margin (PAT / Sales)	(%)	1.84	3.09	2.74
Operating Profit Margin (PBDIT/Sales)	(%)	5.25	7.17	6.03
Return on Total Assets (PBT/Total Assets}	(%)	3.29	5.48	5.38
Return on Investment (ROI) (PBT/Networth)		0.09	0.18	0.15
Debt Equity Ratio (Total Liability/Networth)		1.00	1.17	1.21
Current Ratio (Current Asset/Current Liability)		3.18	2.82	4.68

FINANCIAL ANALYSIS

[all figures are in Rupees Million]

DEBT EQUITY RATIO

Particulars	31.03.2013	31.03.2014	31.03.2015
	(Rs. In Million)	(Rs. In Million)	(Rs. In Million)
Partners Capital	570.698	644.711	687.120
Reserves & Surplus	0.000	0.000	0.000
Net worth	570.698	644.711	687.120
Long-term borrowings	686.271	748.833	681.032
Short term borrowings	1.605	5.280	5.743
Total borrowings	687.876	754.113	686.775
Debt/Equity ratio	1.205	1.170	0.999

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	2121.797	2457.168	2295.946
		15.806	-6.561

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	2121.797	2457.168	2295.946
Profit	58.134	75.972	42.146
	2.74%	3.09%	1.84%

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	Yes
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	No
18	Major suppliers	Yes
19	Major customers	Yes
20	Banking Details	Yes
21	Banking facility details	Yes
22	Conduct of the banking account	Yes
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	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. 66.11
UK Pound	1	Rs. 100.51
Euro	1	Rs. 70.39

INFORMATION DETAILS

Information Gathered by :	PRT
Analysis Done by :	KIN
Report Prepared by :	BVA

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	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	NO
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
DEFAULTER
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		44

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.