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Friday, February 10, 2012

INDIAN GEMS AND JEWELLERY INDUSTRY SCENARIO

INDIAN GEMS AND JEWELLERY INDUSTRY SCENARIO

 India has a glorious historical past in diamonds and has revived the past tradition in the sixties when she entered the fray as a manufacturer exporter of cut and polished diamonds, and later on jewellery as well. After spending initial years in establishing the industry in a defined global market place, India established herself among the top manufacturer and exporter of cut and polished diamonds.  The main reason among others for her excellent growth is attributed to India's skills in converting small diamonds which had so far been discarded as uncuttable into gems.  Further India's advantage is its cheap labour, which gives a comparative price advantage.

 Today the gems and jewellery industry is India's second largest
 foreign exchange earner.

Suashish Jewellery Ltd


Listing Agreements:              Listing agreements entered into by the Company with BSE.

Suashish   Diamonds   Limited   is   a   public   limited  company   incorporated   on October   05,   1988   under   the  Companies Act, 1956    having its registered and corporate office at Mehta Mahal, 11th Floor, 15 Mathew   Road, Opera House, Mumbai 400 004, India.

Promoted by Rameshkumar S Goenka, Suashish Diamonds (SDL) was incorporated in Oct.'88 which imports rough diamonds, cuts and polishes them, and then exports them. Its clientele is spread across the US, Japan, Europe, east Asia and Israel. It is a privileged sight holder of the Diamond Trading Company (DTC), London, whereby it enjoys an uninterrupted supply of raw materials at competitive rates. SDL has been granted Star Trading House status under the export-import policy of the Government of India. It has established a 100% subsidiary  Suashish Diamonds  in Hong Kong. In Jan.'95, SDL came out with a public issue at a premium of Rs. 185, aggregating Rs.113.37 Cr, to set up three diamond cutting and manufacturing units at Ahmedabad; set up a laser processing unit; acquire premises; invest in a subsidiary company and to augment long-term working capital requirements. The total project cost was estimated at Rs.124.51 cr. The company bagged the prestigious award by Gem & Jewellery Export Promotion Council, as the second largest exported of Cut & Polished Diamonds for the year 1998-99 and certificate of merit for outstanding performance in the field of exports of cut & polished diamonds from the Govt. of Maharashtra for the same year. There are 9 subsidiary companies including 3 foreign subsidiaries at the end of financial year 2003-04. Suashish Jewellery Ltd has ceased to be a subsidiary of the company with effect from 07.01.2005.




 Net Foreign Exchange earnings of Gem & Jewellery
 -----------------------------------------------------------------------------------------------
 Year                                                       Net Earning i.e. excess of
                                                               exports over imports
                                                                    (Rs. in Crore)
------------------------------------------------------------------------------------------------
1984-85                                                                                     353.40                      
1985-86                                                                                     369.80                      
1986-87                                                                                     607.40                      
1987-88                                                                                     557.20                      
1988-89                                                                                     1261.10                    
1989-90                                                                                     1078.90                    
1990-91                                                                                     1420.60                    
1991-92                                                                                     1838.90                    
1992-93                                                                                     2045.80                    
1993-94                                                                                     4131.14                                             --------------------------------------------------------------------------------------------------
 
 During the year ended March 1994, Indian exports soared to US $
 4139.26 million - 27% higher than the previous year 1992-93 despite
 the fact that the world has witnessed a recession in the diamond
 industry during the same period.  The average price realisation was
 US $ 260 per carat. During the same period i.e. 1993-94 import of
 rough diamonds increased by 16% over the previous year to US $
 2793.52 million.

 GROWTH

 The export of cut and polished diamonds and the growth rate during
 last 10 years are given in the following table

 ----------------------------------------------------------------------------------------------------
 Year                                 Growth over                              Export Diamonds
                                                                                         (Rs. In Crores)
-----------------------------------------------------------------------------------------------------
 1984-85                              -                                            1172.08     
 1985-86                              + 14.7 %                               1344.25
 1986-87                             + 45.8 %                               1959.73     
 1987-88                             + 24.5 %                                2439.74     
 1988-89                             + 73.7 %                                4238.18     
 1989-90                             + 17.3 %                                4971.93
 1990-91                             -  4.7 %                                  4738.71                
 1991-92                            + 30.0 %                                 6162.64
 1992-93                            + 34.9 %                                  8316.15
 1993-94                            + 37.2 %                                11409.89                            
-------------------------------------------------------------------------------------------------------

 The Compounded Annual Growth Rate (CAGR) of the Indian industry's export of cut and polished diamonds over last 9 years i.e. from 1985-86 to 1993-94 works out to 28.77% p.a. and in the last 3 years i.e. from 1991-92 to 1993-94 it was 34.03% p.a.


 PRESENT BUSINESS

 At present, the Company buys 'Roughs' mainly from DTC and contracts out for cutting and polishing. The entire cut and polished diamonds are then exported to clients all over the world and in particular, to Hong Kong, U.S.A., Japan and Belgium. During the year 1993-94, the laser processing unit of the Company commenced its operations.

 Suashish Diamdeal (India) Limited (SDIL) Suashish Diamdeal (India) Ltd. is a 100% subsidiary company of Suashish Diamonds Limited. It was incorporated as a public limited company on 18th September, 1992 and has become a 100% subsidiary company of Suashish Diamonds Ltd. with effect from 24th May, 1993.The Company has commenced business operations in 1994-95. During the first 5 months ended August '94, the Company has made export of diamonds for Rs. 75.6 lacs apart from local sales of imported gold for Rs. 363.5 lacs. The Company has been issued a bulk licence under the Exim Policy of US,759,588.

 The financial highlights of the subsidiary company are as follows:

 The main objects of the subsidiary company to be purused are

 1.  To act as importers, exporters, manufacturers, processors, wholesalers, distributors, retailers, dealers and indenting agents of diamonds, synthetic stones, gems & jewellery precious and semi-precious stones.

 2.  To carry on, conduct, manage and administer the business of refining, boiling, processing, assorting, cleaning, classifying, clifting, blocking, polishing, preparing, chiselling, kerfing, cleaving, sawing, drilling, bruting through laser or other process cut or uncut coarse and or polished gems, diamonds including industrial diamonds.

 b) Suashish Jewellery Exports Limited (SJEL)  SJEL was incorporated on 28th October, 1992 to act as importers, exporters, manufacturers, wholesalers, distributors, retailers, dealers and indenting agents of jewellery, studded gold jewellery plain gold jewellery gems, diamonds, synthetic stones, precious and semi- precious stones. SJEL has become a subsidiary of SDL from 24th October, 1994. SJEL is setting up a jewellery manufacturing unit at Santacruz Electronics Export Processing Zone. The Company has not commenced commercial production till 31st August, 1994.

 c)        Suashish Diamonds (Hong Kong) Ltd. - Proposed subsidiary  The above Company has been incorporated on 23rd June, 1994 at Hong Kong and the proposed investment by SDL in the shares of the above Company is yet to be made. There is no holding company of Suashish Diamonds Ltd.

 2009 - Suashish Diamonds Ltd has informed that Mr. Mayank Pramodchandra Bajaj has been co-opted as an Additional Director of the Company with effect from June 25, 2009 by means of Circular Resolution passed by the Board of Directors of the Company. Mr. Bajaj shall act as Non-executive and Independent Director of the Company.


NSE:
Listed On                 :16:May:1995
Issue price                : 155
Face Value                : 10
Life time High          :200       7-Jun-95
Life time Low           :12.75    25-Sep-01
  


 Delisted On:

Jan 17,2002  Open16.00  LTP 16.00  Day's Range   16.00 16.45


BSE :

Incorporation Date                  : 05/10/1988
Public Issue Date                    : 27/01/1995
Book Closure Start Date         :23/09/2010
Book Closure End Date          : 29/09/2010
Face Value                              :10.0
Issue price                               : Rs. 185
Market Lot Of Equity Shares  :1
BSE Code                              :526733
BSE Group                            : B

Life time High        : 480   26-Aug-08

Life time Low         : 14     4-Oct-01



Share holders:

(in %)   Dec-10            Sep-10 Jun-10
Promoter          89.43   89.43   89.43
FII       --         --         --
DII       3.56     3.85     3.92
Others  7.01     6.72     6.65
Total    100.00 100.00 100.00


DIVIDEND

04/08/200818/09/2008                        Final18.75%                  54*1.87=100.98
08/03/200721/03/2007                        Interim15%                    54*1.50=081.00
07/04/200622/06/2006                        Final15%                        54*1.50=081.00
07/03/200517/06/2005                        Final15%                          54*1.50=081.00
03/07/2001                                          Final5%                            54*1.50=081.00
11/09/2001                                          Final5%                             54*1.50=081.00
18/04/2000                                          Interim10%                       54*1.00=054.00
18/06/1999                                          Final15%                          54*1.50=081.00
06/1998                                               Final15%                          54*1.50=081.00
                                                                                                          Total=721.98

Share Return:


BSE:

Assumed investment: Rs.10000.

Investment initiated on 1995.

Rs. 10000 worth of shares: 54(Per share Rs.185, 10000/155=54)

As on  28 Feb 2011  return of investment Rs.138.30
(as on 28 Feb 2011 Market price)*54shares=7468.2+721.98(dividend)=8190.18.



Same time Rs.10000 investment in gold.

As on 1995 gold price is Rs.32.43per grm, Rs.10000 worth of gold:308.35(Per grm gold 32.43,10000/32.43=308.35grm rounded of 308)

Return as on  2011 gold price is 1900 per grm (as on feb 2011 market gold price 1900 Per grm)308grm*1900=585200.


GOLD CHART

1994


1995-2010








2011





        

           Asian Star Company Ltd


1971

Asian Star Company was registered as a partnership firm in by the Shah family and Kothari family. The Promoters of the Company are the partners of the erstwhile firm, Asian Star Company and hail from North Gujarat.

- The company has processing facilities at Thala, Mandvi and Goregaon which have been taken on a leave and license basis from associate firms/group companies.

The Company's main activities are importing rough diamonds, cutting and polishing them and exporting of cut and polished diamonds. The Company is carrying out its processing activities from its facilities at Goregaon, Mumbai; Mandvi and Gopipura in Surat & Thala (Chikhli) in Gujarat. It also gets work done on a job work basis from contractors in Mumbai and Surat.

1990

In view of the growing business, both families mutually agreed to amicably separate the business and continue their business in diamonds. The Kothari family continued business under the name of P. D. Kothari & Co. and Asian Star Company has since established itself as a diamond processor engaged in the import of rough diamonds and the export of cut and polished diamonds.

1991

The Company has obtained NOC/Clearance Orders from the Pollution Control Board of Gujarat for the Surat facility vide registration No. 3500, dated 4th October, from the Mandvi Gram Panchayat for the facility at Mandvi.

The Company is Two Times Award winder for highest exports from Gem and Jewellery Export Promotion Council under the Non-DTC category for the year 1991-92 and 1992-93.

The Company is a recipient of National Export Award and Certificates of Merit from Ministry of Commerce for highest growth in exports in the year 1991-92 and 1993-94 respectively.

1993

However in January, on the basis of the Company's performance, DTC reconfirmed the Company as a "Sightholder".

1994

In four year it has secured 31st position of among the top 100 exporters (10th position in the diamond industry) in India for the year according to the report by Federation of Indian Export Organisation, New Delhi, dated September 18, 1995.

1995

The Company is formed by registration of the Partnership firm previously known as Asian Star Company into a Limited Company under Part IX of the Act on March 2, and was granted Certificate of Commencement on 7th March.

The Company has entered into contract with M/s. Rahil Agencies to process rough diamonds at its factories situated at Goregaon, Chikhli (Valsad) and Mandvi (Surat) as per agreements dated 1st February, for a period of five years.

The Company was registered as a public limited company under part IX of the Companies Act on 2nd March.

1996

 The Company entered the Capital Market with a Maiden Public Issue of 26,70,000 equity shares of Rs. 10/- each at a premium of Rs. 65/- per share, which was opened for Public subscription on 13th May.

1997

Indian Diamond Industry had witnessed a bad patch during last year as a result of uncertain market conditions created by breaking up of single channel supply, excessive supply in open market, high rate of interest on Post Shipment finance by Banks.

- The Branch office of the Company at Hong Kong and New York was closed during the year. With due approval of RBI and Government of India a wholly owned Subsidiary Company under the name of ASIAN STAR COMPANY LIMITED with a paid-up capital of US$ 500000/- (Rs. 17875000/- approx.) was incorporated at New York, U.S.A.

1998

1,06,71,200 No. of Equity Shares of Rs. 10/- each of the Company listed on Ahmedabad Stock Exchange be delisted on and from 1st April 1999.

The Company needs additional funds to meet the working capital it is therefore proposed to increase the limits as stipulated in the resolution.

During the year under review Indian Diamond Industry has witnessed a modest rise of 6% over the previous year despite the recession in most consuming centers as well as financial crisis in the Far East Countries.

The company has been awarded ISO : 9002 certification by RWTUV, ESSEN, West Germany.



Public Issue Date             : 13/05/1996
Book Closure Start Date  : 15/09/2010
Book Closure End Date   :  21/09/2010
Listing Price                     :  Rs.75
Face Value                        : 10.0
BSE Code                         : 531847
BSE Group                       : B
Life time high                   : Rs.1999    1-Oct-09
Life time Low                   : Rs.75        24-Jul-96





Year
Month
          Dividend (%)
2010
May
20     133*2=266
2009
Aug
20     133*2=266.00
2008
Jun
20     133*2=266.00
2007
Jun
20     133*2=266.00
2006
Jul
20     133*2=266.00
2005
Jul
20     133*2=266.00
2004
Jun
20     133*2=266.00
2003
Jun
40     133*4=266.00
2002
Jun
10     133*1=133.00
2001
Jun
15     133*1.5=199.5
2000
Mar
75     133*7.5=997.5
1999
Aug
18     133*1.8=239.4
1998
Jul
8       133*0.8=106.4
1997
Nov
10     133*1.0=133.0
1997
Jul
15     133*1.5=199.5
                       Total = 3870.30








Share holding

(in %)   Dec-10            Sep-10 Jun-10
Promoter          74.97   74.97   74.97
FII       0.03     0.03     0.04
DII       4.47     4.47     4.46
Others  20.53   20.53   20.53
Total    100.00 100.00 100.00


Share Return:







Assumed investment: Rs.10000.

Investment initiated on 1996.

Rs. 10000 worth of shares: 133(Per share Rs.185, 10000/75=133)

As on  28 Feb 2011  return of investment Rs.1073

(as on 28 Feb 2011 Market price)*133shares=142709+3870.30(dividend)=146579.30.

Gold Return:

Same time Rs.10000 investment in gold.

As on 1996 gold price is Rs. 35.52per grm, Rs.10000 worth of gold:281.5(Per grm gold 32.43,10000/35.52=281.5grm rounded of 281)

Return as on  2011 gold price is 1900 per grm (as on feb 2011 market gold price 1900 Per grm)281grm*1900=533900.