MIRA INFORM REPORT

Report No. :	350557
Report Date :	20.11.2015

IDENTIFICATION DETAILS

Name :	VEER GEMS
Registered Office :	7/2982, Parsi Sheri, Sayedpura, Surat – 395003, Gujarat
Tel. No.:	91-22-26754448 / 9
Country :	India
Financials (as on) :	31.03.2015
Date of Incorporation :	25.10.1982
Capital Investment / Paid-up Capital :	Rs.864.967 Million
TIN No.:	Not Available
IEC No.:	0888004656
TAN No.: [Tax Deduction & Collection Account No.]	Not Available
PAN No.: [Permanent Account No.]	AABFV6446L
Legal Form :	Partnership Concern with an Unlimited Liability of the Partners
Line of Business :	Manufacturer, Exporter and Importer of Diamonds.
No. of Employees :	200 (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 established partnership concern started in the year 1982 having satisfactory track. Subject is engaged in the business as manufacturer, exporter and importer of diamonds. Financial position of the concern is sound. The rating also takes into consideration subject long track record of business operation. Moreover, this rating strength is partially offset by susceptibility to volatile diamond prices and strong competition from the organized as well as unorganized players in the industry. Trade relations are reported as fair. Business is active. Payments terms are reported slow but correct. The concern can 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.

EXTERNAL AGENCY RATING

Rating Agency Name	CRISIL
Rating	Long Term rating = (BBB-)
Rating Explanation	Moderate degree of safety and carry moderate credit risk.
Date	September 9, 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. Kutty
Designation :	Accountant
Contact No.:	91-22-26754448
Date :	19.11.2015

LOCATIONS

Registered Office / Factory:	7/2982, Parsi Sheri, Sayedpura, Surat – 395003, Gujarat, India
Tel. No.:	91-261-2430664
Fax No.:	Not Available
E-Mail :	sales@veergems.com accounts@veergems.com info@veergems.com
Website :	www.veergemsonline.com
Location :	Owned
Locality :	Industrial
Branch Office :	B/F – 4011/12, Bharat Diamond Bourse, Bandra Kurla Complex, Bandra (East), Mumbai – 400051, Maharashtra, India
Tel. No.:	91-22-61110000 / 26754448
Fax No.:	91-22-61111001
Location :	Owned
Locality :	Commercial

PARTNERS

Name :	Mr. Dilip M. Shah
Designation :	Partner
Name :	Mr. Mukesh Shah
Designation :	Partner
Name :	Mr. Piyush Shah
Designation :	Partner
Name :	Mr. Kushal Shah
Designation :	Partner
Name :	Mr. Maulin Shah
Designation :	Partner
Name :	Ms. Heena D. Shah
Designation :	Partner
Name :	Ms. Nirupa Shah
Designation :	Partner

KEY EXECUTIVES

Name :	Mr. Kutty
Designation :	Accountant

BUSINESS DETAILS

Line of Business :	Manufacturer, Exporter and Importer of Diamonds.
Products :	Diamonds
Brand Names :	Not Divulged
Agencies Held :	Not Divulged
Exports :
Products :	Finished Goods
Countries :	Belgium Hong Kong Dubai USA Japan
Imports :
Products :	Rough Diamond
Countries :	Belgium
Terms :
Selling :	L/C and Cheque
Purchasing :	L/C and Cheque

GENERAL INFORMATION

Suppliers :

Reference :	Not Divulged
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

• ABT Diamonds Limited
• Aml Diamonds BVBA
• Aks Jewels Private Limited
• AL Rasaja Trading DMCC
• Blue Gems NV
• D. Nitin and Company Private Limited
• Ketan Brothers Exports
• JB and Brothers Exports Private Limited
• Prisha Gems Private Limited
• Rusaem and Company
• Rays Diamonds
• Yoram Dvashi Dia Limited

Customers :

Retailers and End Users

Reference :

Rozi Blue, Mumbai, Maharashtra, India

Name of the Person :

Mr. Deepak (Senior Manager)

Contact No.:

91-22-66650000

Since How Long Known :

Not Divulged

Maximum Limit Dealt :

Not Divulged

Experience :

Payment Behaviour	Market Goodwill	Overall
Excellent	Excellent	Excellent

Remark:

They gave us positive response about the subject company. They are satisfied with their products quality and delivery behavior.

• AKS Jewels Private Limited
• Aarna Gems INC
• Ajay Diam Limited
• Blue Diam Company
• C. Dinesh and Company
• Dhruvi Gems Private Limited
• Dimexon Diamonds Limited
• Fine Star HK limited
• Fabjewels Private Limited
• Goldstar Jewellery Private Limited
• Goldiam International Limited
• Indo Venture Limited
• Jewelmark India Private Limited
• Karp Impex HK Limited
• RFM Corporation
• R.N. Enterprises
• Rosy Blue Sales limited
• S.B. Diamonds
• Sana Creation Limited

No. of Employees :

200 (Approximately)

Bankers :

Bank Name	Indusind Bank
Branch	Penisula Building, Lower Parel, Mumbai, Maharashtra, India
Person Name (With Designation)	Not Divulged
Contact Number	Not Divulged
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)	Cash Credit = Rs. 700.000 Million
Account Operation	Not Divulged
Remarks (If any)	Not Divulged

Auditors :

Name :

Rajesh Shah and Company

Chartered Accountants

Address :

O-1, 1^st floor, Silver Palm Building, Tamaliyawad, Nanpura, Surat - 395007, Gujarat, India

Tel No.:

91-261-2460689 / 4027016

Email Id:

info@roseshca.com

Memberships :

Not Available

Collaborators :

Not Available

Sister Concern:

Not Available

CAPITAL STRUCTURE

As on 31.03.2015

CAPITAL ACCOUNT OF DILIP M. SHAH

PARTICULARS	Rs. In Million	PARTICULARS	Rs. In Million
To Withdrawal	62.802	By Opening Balance	227.102
To Income Tax	8.921	By Net profit	19.071
To Closing Balance	206.649	By Additional During the Year	31.700
		By Remuneration	0.500
Total	278.373	Total	278.373

CAPITAL ACCOUNT OF HEENA D. SHAH

PARTICULARS	Rs. In Million	PARTICULARS	Rs. In Million
To Withdrawal	2.620	By Opening Balance	82.973
To Income Tax	5.353	By Net profit	11.442
To Closing Balance	87.943	By Additional During the Year	1.500
Total	95.916	Total	95.916

CAPITAL ACCOUNT OF KUSHAL DILIP SHAH

PARTICULARS	Rs. In Million	PARTICULARS	Rs. In Million
To Withdrawal	3.647	By Opening Balance	21.147
To Income Tax	3.568	By Net profit	7.628
To Closing Balance	21.861	By Additional During the Year	0.002
		By Remuneration	0.300
Total	29.077	Total	29.077

CAPITAL ACCOUNT OF MAULIN P. SHAH

PARTICULARS	Rs. In Million	PARTICULARS	Rs. In Million
To Withdrawal	0.380	By Opening Balance	32.048
To Income Tax	5.352	By Net profit	11.442
To LIP	1.039	By Remuneration	0.300
To Closing Balance	37.020
Total	43.791	Total	43.791

CAPITAL ACCOUNT OF MUKESH M. SHAH

PARTICULARS	Rs. In Million	PARTICULARS	Rs. In Million
To Withdrawal	42.915	By Opening Balance	175.531
To Income Tax	1.784	By Net profit	3.814
To Closing Balance	186.321	By Additional During the Year	51.175
		By Remuneration	0.500
Total	231.021	Total	231.021

CAPITAL ACCOUNT OF NIRUPA M. SHAH

PARTICULARS	Rs. In Million	PARTICULARS	Rs. In Million
To Withdrawal	1.432	By Opening Balance	116.493
To Income Tax	1.427	By Net profit	3.051
To Closing Balance	118.185	By Additional During the Year	1.500
Total	121.045	Total	121.045

CAPITAL ACCOUNT OF PIYUSH M. SHAH

PARTICULARS	Rs. In Million	PARTICULARS	Rs. In Million
To Withdrawal	3.642	By Opening Balance	193.091
To Mediclaim	0.013	By Net profit	19.834
To Income Tax	9.277	By Additional During the Year	7.900
To Municipal Tax	0.040	By Remuneration	0.500
To LIP	1.366
To Closing Balance	206.986
Total	221.325	Total	221.325

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		864.967	848.387	872.277
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		864.967	848.387	872.277
LOAN FUNDS
1] Secured Loans		1518.998	1229.502	1240.943
2] Unsecured Loans		92.871	93.371	94.721
TOTAL BORROWING		1611.869	1322.873	1335.664
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		2476.836	2171.260	2207.941
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		123.168	117.535	96.705
Capital work-in-progress		0.000	0.000	0.000
INVESTMENT		68.750	50.000	50.000
DEFERRED TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	1972.592	1740.613	2071.519
	Sundry Debtors	1502.394	1331.290	1070.859
	Cash & Bank Balances	44.218	11.071	9.321
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	70.011	75.740	126.848
Total Current Assets		3589.215	3158.714	3278.547
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	1264.999	1154.989
	Other Current Liabilities
	Provisions	39.298	0.000
Total Current Liabilities		1304.297	1154.989	1217.311
Net Current Assets		2284.918	2003.725	2061.236
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		2476.836	2171.260	2207.941

PROFIT & LOSS ACCOUNT

	PARTICULARS	31.03.2015	31.03.2014	31.03.2013
	SALES
	Income	4497.355	4763.532	3,235.36
	Indirect Income	39.055	14.949	157.385
	TOTAL (A)	4536.410	4778.481	3392.747
Less	EXPENSES
	Raw Materials Consumed	3722.726	3188.699	2757.766
	Purchases	454.318	1011.876	201.446
	Direct Expenses	203.464	145.711	146.606
	Increase / (decrease) in stock	(178.121)	151.203	(86.631)
	Administrative expenses	29.945	24.933	31.286
	Selling and Distribution Expenses	57.627	47.444	37.775
	Partner remuneration	0.000	0.000	2.100
	TOTAL (B)	4289.959	4569.866	3090.348
Less	PROFIT/ (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (C)	246.451	208.615	302.399
Less	FINANCIAL EXPENSES (D)	122.537	96.169	78.434
	PROFIT / (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)	123.914	112.446	223.965
Less/ Add	DEPRECIATION/ AMORTISATION (F)	6.233	5.020	5.177
	PROFIT/ (LOSS) BEFORE TAX (E-F) (G)	117.681	107.426	218.788
Less	TAX (H)	41.398	2.100	0.000
	PROFIT/ (LOSS) AFTER TAX (G-H) (I)	76.283	105.326	218.788

The above information has been parted by Mr. Kutty (Accountant)

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

KEY RATIOS

PARTICULARS		31.03.2015	31.03.2014	31.03.2013
Net Profit Margin (PAT / Sales)	(%)	1.70	2.21	6.76
Operating Profit Margin (PBIDT/Sales)	(%)	5.48	4.38	9.35
Return on Total Assets (PBT/Total Assets}	(%)	3.17	3.28	6.48
Return on Investment (ROI) (PBT/Networth)		0.14	0.13	0.25
Debt Equity Ratio (Total Debt /Networth)		1.86	1.56	1.53
Current Ratio (Current Asset/Current Liability)		2.57	2.53	2.50

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	872.277	848.387	864.967
Reserves & Surplus	0.000	0.000	0.000
Net worth	872.277	848.387	864.967
long-term borrowings	1240.943	1229.502	1518.998
Short term borrowings	94.721	93.371	92.871
Total borrowings	1335.664	1322.873	1611.869
Debt/Equity ratio	1.531	1.559	1.864

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	3235.362	4763.532	4497.355
		47.233	(5.588)

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	3235.362	4763.532	4497.355
Profit	218.788	105.326	76.283
	6.76%	2.21%	1.70%

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	No
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%	--
28	Estimation for coming financial year	No
29	Profitability for last three years	No
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 records 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.101.03
Euro	1	Rs.70.77

INFORMATION DETAILS

Information Gathered by :	GYT
Analysis Done by :	DIV
Report Prepared by :	SUJ

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	5
--LIQUIDITY	1~10	4
--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		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	--

S

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