MIRA INFORM REPORT

Report No. :	491561
Report Date :	14.02.2018

IDENTIFICATION DETAILS

Name :	SAMARTH DIAMOND
Registered Office :	Office No. DC 3150, G Block, Bharat Diamond Brourse, Bandra Kurla Complex, Bandra (East), Mumbai-400051, Maharashtra
Tel. No.:	91-22-33924717 / 7417
Country :	India
Financials (as on) :	31.03.2016 (Provisional)
Year of Establishment :	1987
Capital Investment :	INR 345.262 Million
IEC No.:	0310014646
TIN No.:	27880789917
GST No.:	27ABBFS6229H1Z2
PAN No.: [Permanent Account No.]	ABBFS6229H
Legal Form :	Partnership Concern with an Unlimited Liability of the Partners
Line of Business :	Manufacturer and Exporter of Diamonds. [Confirmed by Management]
No. of Employees :	3400 (Approximately)

RATING & COMMENTS

(Mira Inform has adopted New Rating mechanism w.e.f. 23^rd January 2017)

MIRA’s Rating :

A

Credit Rating	Explanation	Rating Comments
A	Acceptable Risk	Business dealings permissible with moderate risk of default

Status :	Satisfactory
Payment Behaviour :	Slow but correct
Litigation :	Clear
Comments :	Subject is a partnership firm established in the year 1987. It is a Manufacturer and Exporter of Diamonds. Mr. Dashrath M Patel (Partner) has provided information about the subject to us and claimed that firm has achieved sales turnover of INR 3000 million for the FY 2017 (which could not be verified). However, as per the provisional financial records of 2016, the firm has achieved 6.58% revenue along with average profit margin of 1.33%. The satisfactory financial profile of the firm is marked by sufficient capital base along with negligible debt level. Rating takes into consideration long established track record of the firm. However, rating strengths are partially offset by working capital intensive nature of operations, presence in highly fragmented industry, and vulnerability of margins to volatility in diamond prices and exposure to exchange rate risk. Trade relations are reported to be fair. Payments seems to be slow but correct. In view of aforesaid, the firm can be considered for business dealings with usual trade term and conditions. Note: The correct name of the firm is “Samarth Diamond”.

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

Country Name	Previous Rating (30.06.2017)	Current Rating (30.09.2017)
India	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low Risk	A2
Moderately Low Risk	B1
Moderate Risk	B2
Moderately High Risk	C1
High Risk	C2
Very High Risk	D

EXTERNAL AGENCY RATING

Rating Agency Name	CARE
Rating	Bank Facilities Fund Based=BBB-
Rating Explanation	Moderate degree of safety and moderate credit risk
Date	24.07.2017
Rating Agency Name	CARE
Rating	Bank Facilities Non Fund Based=A3
Rating Explanation	Minimal degree of safety and higher credit risk
Date	24.07.2017

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 31-03-2016.

BIFR (Board for Industrial & Financial Reconstruction) LISTING STATUS

Subject’s name is not listed as a Sick Unit in the publicly available BIFR (Board for Industrial & Financial Reconstruction) list as of 14.02.2018.

IBBI (Insolvency and Bankruptcy Board of India) LISTING STATUS

Subject’s name is not listed in the publicly available IBBI (Insolvency and Bankruptcy Board of India) list as of report date.

INFORMATION PARTED BY

Name :	Mr. Dashrath M. Patel
Designation :	Partner
Contact No.:	91-9167210151
Date :	13.02.2018

LOCATIONS

Registered Office :	Office No. DC 3150, G Block, Bharat Diamond Brourse, Bandra Kurla Complex, Bandra (East), Mumbai-400051, Maharashtra, India
Tel. No.:	91-22-33924717 / 7417
Mobile No.:	91-9167210151 (Mr. Dashrath M. Patel)
Fax No.:	91-22-23641590
E-Mail :	info@samarthdiamond.com
Website :	http://www.samarthdiamond.com
Area :	600 Sq. Ft
Location :	Rented
Locality :	Commercial
Factory :	Rushikesh Market, Opposite Nutan High School, Visnagar – 384315, Mehsana, Gujarat, India
Tel. No.:	91-2765-222611/ 220974

PARTNERS

Name :	Mr. Dashrath M. Patel
Designation :	Partner
Date of Birth/Age :	5 Years
Qualification :	B.E. Civil
Experience :	31 Years
Name :	Mr. Dinesh M. Patel
Designation :	Partner
Date of Birth/Age :	52 Years
Qualification :	Graduate
Experience :	29 Years
Name :	Mr. Govind M. Patel
Designation :	Partner
Date of Birth/Age :	50 Years
Qualification :	BSC. MBA
Experience :	27 Years

BUSINESS DETAILS

Line of Business :	Manufacturer and Exporter of Diamonds. [Confirmed by Management]
Products/ Services :	Diamonds
Brand Names :	Not Available
Agencies Held :	Not Available
Exports :
Products :	Polished Diamond
Countries :	· Belgium · Dubai · Hong Kong
Imports :
Products :	Rough Diamond
Countries :	· Belgium · Dubai
Terms :
Selling :	Cheque and Credit [30, 60 Days]
Purchasing :	Cheque and Credit [30, 60 Days]

GENERAL INFORMATION

Suppliers :

Reference:	Dia Rough N.V. Belgium
Name of the Person (Designation):	--
Contact Number:	--
Since how long known:	--
Maximum limit dealt:	--
Experience:	--
Remark	--

Customers :

Wholesalers, Retailers and End Users

Reference:	Starlite Diamonds
Name of the Person (Designation):	--
Contact Number:	--
Since how long known:	--
Maximum limit dealt:	--
Experience:	--
Remark	--

No. of Employees :

3400 (Approximately)

Bankers :

Bank Name:	Bank of India
Branch:	Opera House, Hemes Road, Mama Paramanand Road (Branch), Mumbai, Maharashtra, India
Person Name (with Designation):	---
Contact Number:	91-22-23694891 [Ringing]
Name of Account Holder:	---
Account Number:	---
Account Since (Date/ Year of A/c Opening):	---
Average Balance Maintained (Optional):	---
Credit Facilities Enjoyed (CC/OD/Term Loan):	---
Account Operation:	---
Remarks: Bank Holiday

Bank Name:	The Mehsana Urban Co-Operative Bank Limited
Branch:	---
Person Name (with Designation):	---
Contact Number:	---
Name of Account Holder:	---
Account Number:	---
Account Since (Date/ Year of A/c Opening):	---
Average Balance Maintained (Optional):	---
Credit Facilities Enjoyed (CC/OD/Term Loan):	---
Account Operation:	---
Remarks: ---

Auditors :
Name :	Mr. Nikesh R. Shah Chartered Accountant
Memberships :	Not Available
Collaborators :	Not Available
Associates/Subsidiaries :	Not Available

CAPITAL STRUCTURE

AS ON 31.03.2016 [PROVISIONAL]

PARTICULARS	AMOUNT
Dashrath M Patel	128.953
Dinesh M Patel	114.429
Govind M Patel	101.880
Total	345.263

FINANCIAL DATA

[all figures are in INR Million]

PARTICULARS	31.03.2017
Sales Turnover (Approximately)	3000.000

Expected Sales (2017-2018): INR 3000.000 Million

The above information has been parted by Mr. Dashrath M. Patel [Partner]

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

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2016 [Provisional]	31.03.2015	31.03.2014
SHAREHOLDERS FUNDS
1] Partner Capital Account		345.262	229.023	152.191
2] Reserves & Surplus		35.856	0.000	0.000
NETWORTH		381.118	229.023	152.191
LOAN FUNDS
1] Secured Loans		150.632
2] Unsecured Loans		0.000
TOTAL BORROWING		150.632	73.889	108.754
DEFERRED TAX LIABILITIES		0.647	0.647	1.949
TOTAL		532.397	303.559	262.894
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		196.712	111.423	81.230
Capital work-in-progress		0.000	0.000	0.000
INVESTMENT		17.737	0.900	0.924
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	967.292	745.914	526.515
	Sundry Debtors	292.645	138.743	103.672
	Cash & Bank Balances	24.094	21.309	18.025
	Other Current Assets	13.878	1.886	1.844
	Loans & Advances	42.401	35.667	8.711
Total Current Assets		1340.310	943.519	658.767
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	968.798	715.377	441.992
	Other Current Liabilities
	Provisions	53.564	36.906	36.035
Total Current Liabilities		1022.362	752.283	478.027
Net Current Assets		317.948	191.236	180.740
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		532.397	303.559	262.894

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2016 [Provisional]
	SALES
		Sales	2691.969
		Other Income	5.626
		TOTAL	2697.595
Less	EXPENSES
		Cost of Goods Sold	1939.083
		Direct Expenses	549.628
		Computer Expenses	0.160
		Interest Expenses	54.747
		Income Tax Expenses Earlier Year	0.066
		Insurance Expenses	1.606
		Partner Remuneration	17.000
		Other Expenses	65.101
		TOTAL	2627.391
Less	PROFIT / (LOSS) BEFORE INTEREST AND DEPRECIATION AND AMORTISATION		70.204
Less	FINANCIAL EXPENSES		0.115
	PROFIT/ (LOSS) BEFORE DEPRECIATION AND AMORTISATION		70.089
Less/ Add	DEPRECIATION/ AMORTISATION		34.234
	NET PROFIT		35.855

	PARTICULARS		31.03.2015	31.03.2014
	SALES
		Sales	2525.824	1550.507
		Other Income	2.537	2.211
		TOTAL	2528.361	1552.718
Less	EXPENSES
		Cost of Goods Sold	2378.332	1466.093
		Sales and Administrative Expenses	51.176	31.625
		Remuneration to Partner	10.000	5.000
		TOTAL	2439.508	1502.718
Less	PROFIT / (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION		88.853	50.000
Less	FINANCIAL EXPENSES		26.299	13.946
	PROFIT/(LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION		62.554	36.054
Less/ Add	DEPRECIATION/ AMORTISATION		18.607	12.835
	PROFIT/ (LOSS) BEFORE TAX		43.947	23.219
Less	TAX		15.089	8.292
	PROFIT/ (LOSS) AFTER TAX		28.858	14.927

KEY RATIOS

EFFICIENCY RATIOS

PARTICULARS	31.03.2016 [Provisional]	31.03.2015	31.03.2014
Average Collection Days (Sundry Debtors / Income * 365 Days)	39.68	20.05	24.41
Account Receivables Turnover (Income / Sundry Debtors)	9.20	18.21	14.96
Average Payment Days (Sundry Creditors / Purchases * 365 Days)	182.36	109.79	110.04
Inventory Turnover (Operating Income / Inventories)	0.07	0.12	0.09
Asset Turnover (Operating Income / Net Fixed Assets)	0.36	0.80	0.62

LEVERAGE RATIOS

PARTICULARS	31.03.2016 [Provisional]	31.03.2015	31.03.2014
Debt Ratio ((Borrowing + Current Liabilities) / Total Assets)	0.75	0.78	0.79
Debt Equity Ratio (Total Liability / Networth)	0.40	0.32	0.71
Current Liabilities to Networth (Current Liabilities / Net Worth)	2.68	3.28	3.14
Fixed Assets to Networth (Net Fixed Assets / Networth)	0.52	0.49	0.53
Interest Coverage Ratio (PBIT / Financial Charges)	610.47	3.38	3.59

PROFITABILITY RATIOS

PARTICULARS		31.03.2016 [Provisional]	31.03.2015	31.03.2014
Net Profit Margin ((PAT / Sales) * 100)	%	1.33	1.14	0.96
Return on Total Assets ((PAT / Total Assets) * 100)	%	2.31	2.73	2.01
Return on Investment (ROI) ((PAT / Networth) * 100)	%	9.41	12.60	9.81

SOLVENCY RATIOS

PARTICULARS	31.03.2016 [Provisional]	31.03.2015	31.03.2014
Current Ratio (Current Assets / Current Liabilities)	1.31	1.25	1.38
Quick Ratio ((Current Assets – Inventories) / Current Liabilities)	0.36	0.26	0.28
G-Score Ratio Financial (Networth / Total Assets)	0.25	0.22	0.21
G-Score Ratio Debt (Debts / Equity Capital)	4.20	0.00	0.00
G-Score Ratio Liquidity (Total Current Assets / Total Current Liabilities)	1.31	1.25	1.38

Total Liability = Short-term Debt + Long-term Debt + Current Maturities of Long-term debts

FINANCIAL ANALYSIS

[all figures are in INR Million]

DEBT EQUITY RATIO

Particular	31.03.2014	31.03.2015	31.03.2016 [Provisional]
	(INR In Million)	(INR In Million)	(INR In Million)
Partner Capital	152.191	229.023	345.262
Reserves & Surplus	0.000	0.000	35.856
Net worth	152.191	229.023	381.118
Secured Loans			150.632
Unsecured Loans			0.000
Total borrowings	108.754	73.889	150.632
Debt/Equity ratio	0.715	0.323	0.395

YEAR-ON-YEAR GROWTH

Year on Year Growth	31.03.2014	31.03.2015	31.03.2016 [Provisional]
	(INR In Million)	(INR In Million)	(INR In Million)
Sales	1550.507	2525.824	2691.969
		62.903	6.578

NET PROFIT MARGIN

Net Profit Margin	31.03.2014	31.03.2015	31.03.2016 [Provisional]
	(INR In Million)	(INR In Million)	(INR In Million)
Sales	1550.507	2525.824	2691.969
Profit	14.927	28.858	35.855
	0.96%	1.14%	1.33%

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)	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 four 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	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 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	INR 64.28
UK Pound	1	INR 89.02
Euro	1	INR 78.93

INFORMATION DETAILS

Information Gathered by :	SAV
Analysis Done by :	VAR
Report Prepared by :	IND

SCORE FACTORS

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

RATING EXPLANATIONS

Credit Rating	Explanation	Rating Comments
A++	Minimum Risk	Business dealings permissible with minimum risk of default
A+	Low Risk	Business dealings permissible with low risk of default
A	Acceptable Risk	Business dealings permissible with moderate risk of default
B	Medium Risk	Business dealings permissible on a regular monitoring basis
C	Medium High Risk	Business dealings permissible preferably on secured basis
D	High Risk	Business dealing not recommended or on secured terms only
NB	New Business	No recommendation can be done due to business in infancy stage
NT	No Trace	No recommendation can be done as the business is not traceable

NB is stated where there is insufficient information to facilitate rating. However, it is not to be considered as unfavourable.

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 are as follows:

· Financial condition covering various ratios

· Company background and operations size

· Promoters / Management background

· Payment record

· Litigation against the subject

· Industry scenario / competitor analysis

· Supplier / Customer / Banker review (wherever available)

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.