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Shree Ganesh Jewellery House Limited July 2010. 2 Agenda Industry Overview Company Overview Financial Highlights Robust Business Model Investment Highlights.

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Presentation on theme: "Shree Ganesh Jewellery House Limited July 2010. 2 Agenda Industry Overview Company Overview Financial Highlights Robust Business Model Investment Highlights."— Presentation transcript:

1 Shree Ganesh Jewellery House Limited July 2010

2 2 Agenda Industry Overview Company Overview Financial Highlights Robust Business Model Investment Highlights

3 3 Gems & Jewellery Industry Sr.CategorySub-category 1.GemstonesDiamonds Coloured stones – precious, semi-precious, synthetic 2.JewelleryPlain gold Jewellery Studded Jewellery Silver Jewellery Costume Jewellery 3.Pearls- 1.The Industry exported goods worth US$ bn constituting 12.52% of Indias Exports (FY 09) Though Diamonds form a major portion of G&J Exports, Gold jewellery exports were the primary drivers of industry growth in FY09 by contributing US$ 6.87 bn (FY09) with a YOY growth of 23.61%. 2.Indian domestic jewellery market - Rs.700 bn (USD14.58bn). Urban jewellery market - Rs.280 bn (USD5.83 bn) Rural & semi-rural market - Rs.420 bn (USD 8.75 bn). 3.Gold jewellery contributes 80% of Indian jewellery market (approx. Rs.560 bn / USD bn) balance is studded jewellery which includes diamond studded as well as gemstone studded jewellery 4.The industry is largely unorganized with over 100,000 jewellery manufacturing units, 6,000 players in diamond processing and 450,000 goldsmiths Family jewelers constitute 96% & only 4% being organized 5.With increasing disposable income, buying pattern shifting to purchase of branded jewellery from organized & reputed outlets GOLD JEWELLERY IN TOTAL EXPORT FY09 Source: GJEPC Shree Ganeshs Focus Segment

4 4 Gems & Jewellery Industry CAGR 7.87% GEMS & JEWELLERY EXPORT Source: GJEPC USD. Bn. RISING SHARE OF SHREE GANESH GOLD JEWELLERY EXPORT Source: GJEPC USD. Bn. CAGR 26.53% RISING SHARE OF GOLD EXPORT RISING SHARE OF GOLD EXPORTS Source: GJEPC

5 5 Company Overview Background One of the largest manufacturer exporters of Handcrafted Gold Jewellery Promoted in August 2002 by Nilesh Parekh & Umesh Parekh, belonging to a jeweller family having more than 5 decades of experience in jewellery making Investment by Credit Suisse PE aggregating Rs. 80 Crs for 10.99% equity stake at a price of Rs. 300/- per equity share (Pre Bonus of 1:1) in March 2008 Manufacturing Manufacturing facilities located at Manikanchan, Kolkata, a Gems & Jewellery dedicated SEZ promoted by West Bengal Government Employs over 562 gold karigars (craftsmen) from West Bengal Manufacturing capacity of over 30,500 Kgs of gold jewellery p.a. Markets Primarily focused on Export markets which contributes over 95% of Total Revenues with major export markets as UAE, Singapore and Hong Kong Expanding Retail Presence in Domestic Market Awards Outstanding Export Performance and Contribution in the Trade for Plain Precious Metal Jewellery Exports by Unit from EoU/EPZ for 2008 & 2009 Rating in December 2009 of SE 1A by Crisil indicating High performance capability and highest financial strength Promoters awarded SinGem Young Achiever Award, Eastern India in 2006 Four Star Export Trading House

6 6 Milestones Promoters engaged in family business of gold jewellery manufacturing 2002 Year of Incorporation 2003 Took over partnership firm Shree Ganesh Jewellers engaged in jewellery business 2004 Set up manufacturing unit at Manikanchan SEZ 2006 Promoters awarded Young Achievers Award by SinGems Strengthening presence in retail market Further expansion to meet growing demand and backward integration Turnover of Rs. 2,000 Crs Received Four Star Export House status 2008 PE investment by Credit Suisse Outstanding Export Performance award by GJEPC 2007 Opened first branded Retail Jewellery store

7 7 Product Portfolio Handcrafted hallmarked gold jewellery and gold enameled jewellery Gold jewellery studded with precious stones like rubies, emeralds, sapphires, pearls and diamonds Portfolio includes rings, earrings, pendants, bracelets, necklaces, bangles, medallions, gold coins Product catalogue includes Plain Gold sets, Gold Bengal Antique sets, Jadau - Kundan sets, Gold Mumbai Rajkot Antique sets, Gold and studded Bangles, Polki – Chakri sets 15 member strong in-house design development team Tie up with Sabyasachi Mukherji, renowned Indian Fashion Designer for high end exclusive jewellery

8 8 Business Amongst the largest player in the industry Capacity to produce 21,500 kg of Gold Jewellery p.a. Products majorly include Handcrafted Gold Jewellery Major markets UAE, Singapore & Hong Kong Contributes to more than 95% of turnover Some of the International customers such as Ibrahim Al Sayegh Jewellery, Sparkle Jewellery FZE (UAE), Denzong (Hong Kong), Wondercut Pte Ltd, Abhusan (S) Private Limited, Excellency Pte Limited, (Singapore) has been companys long standing customer Wholesale of Handcrafted Gold Jewellery (Deemed Exports) Expanding retailing of branded jewellery under GAJA brand through existing 13 outlets and proposed outlets Focus on Tier II & III cities through exclusive shops & franchisees in Kolkata, Ahmedabad, Bangalore Chandigarh, Patiala, Bhatinda, Jalandar, Rajkot, Amritsar, Ludhiana, Mangalore and Siliguri. Company has other brands with different themes mainly targeting young men and women Leading fashion designer Sabyasachi Mukherjee is an empanelled designer Exports Domestic

9 9 Professional & Experienced Management Mr. Nilesh Parekh Chairman, Promoter -Experience of over 20 years in the jewellery industry -Responsible for overall strategic long term plans and product development -Awarded Young Achievers Award by Sin Gems in 2006 Mr. Umesh Parekh Managing Director, Promoter -Experience of over 19 years in the jewellery industry -Heads global marketing operations and overseas business development -Awarded Young Achievers Award by Sin Gems in 2006 Mr. Sharad Mohata Non Executive Director, CA, ICWA -Practicing Chartered Accountant & qualified Cost Accountant -Professional experience of over 17 years in the field of Accounting, Taxation, Project Finance etc. Mr. P. S. Ingty Independent Director – Ex IAS -Masters degree in Arts and MBA from Leeds University, United Kingdom -Principle secretary to the Government of West Bengal (1997 – 2002) Mr. S. C. Chaturvedi Independent Director, CA -Practicing Chartered Accountant with professional experience of over 38 years in the field of accounting, taxation, project finance, etc. -Associated with several public and private sector companies as Auditors Mr. Hemang Raja Nominee Director (Credit Suisse) -B.Com - Mumbai University & MBA - University of Abilene, Texas, USA -Managing Director and Head-India, Credit Suisse Private Equity Asia -Ex MD and CEO of IL & FS Investsmart Ltd. Mr. D. P. Mathur Independent Director -Masters in Economics from University of Rajasthan -Had been associated with Planning Commission, Center for Management in Agriculture, IIM-Ahmedabad, UN-FAO, Ministry of Commerce Mr. T. K. Das Independent Director – Ex IAS -IAS Officer from 1965 to Had been Joint Secretary to GoI, Principal Secretary to WB Govt, Consultant to WHO, Administrator to CSE

10 Financial Highlights (Stand alone)

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13 Robust Business Model REVENUES Rs. 29,426 mn 3 yr CAGR 89% EBITDA Rs. 2,119 mn 3 yr CAGR 84% REVENUES Rs. 29,426 mn 3 yr CAGR 89% EBITDA Rs. 2,119 mn 3 yr CAGR 84% Strategic Location -Easy access to skilled Bengali karigars -SEZ units - tax & custom benefits -Proximity to Airport Strategic Location -Easy access to skilled Bengali karigars -SEZ units - tax & custom benefits -Proximity to Airport Strong Designing Capabilities -Intricate handcrafted design;high demand -Tie up with Sabyasachi Mukherji -Technological innovations Strong Designing Capabilities -Intricate handcrafted design;high demand -Tie up with Sabyasachi Mukherji -Technological innovations Large Size - Lower Costs -Nominated Agency -Canalising Agent -Four Star Export House Large Size - Lower Costs -Nominated Agency -Canalising Agent -Four Star Export House Experienced Management -Professional management -Promoters individually have 2 decades of experience -Jeweller from generations Experienced Management -Professional management -Promoters individually have 2 decades of experience -Jeweller from generations Insulation from price volatility -Gold business enjoys natural hedge -Gold jewellery bought as investment -Hedged foreign exchange position Insulation from price volatility -Gold business enjoys natural hedge -Gold jewellery bought as investment -Hedged foreign exchange position Excellent client relationship -Super Distributors - Bulk orders -Repeat Order due to confidence -Long standing association with buyers Excellent client relationship -Super Distributors - Bulk orders -Repeat Order due to confidence -Long standing association with buyers

14 14 Growth Strategy Targeting Europe, Australia, Africa & Middle East Set up Singapore & Dubai subsidiaries to market products as well as procure gold Cater hitherto untapped domestic markets Targeting Europe, Australia, Africa & Middle East Set up Singapore & Dubai subsidiaries to market products as well as procure gold Cater hitherto untapped domestic markets Moving from handcrafted jewellery to machinemade light, italian and fusion jewellery Tie-up with more designers both India & Overseas Launch international quality & design in India Moving from handcrafted jewellery to machinemade light, italian and fusion jewellery Tie-up with more designers both India & Overseas Launch international quality & design in India Capacity expansion to enhance revenues Newer products range - higher market penetration Latest Technology for wastage reduction Better technology for margin enhancement Capacity expansion to enhance revenues Newer products range - higher market penetration Latest Technology for wastage reduction Better technology for margin enhancement Strengthening GAJA brand Expand from existing 13 retail outlets to 49 Franchisee Outlets Model to penetrate at low capex Overseas retail outlets for high end customers More Focus on Tier II & III cities Strengthening GAJA brand Expand from existing 13 retail outlets to 49 Franchisee Outlets Model to penetrate at low capex Overseas retail outlets for high end customers More Focus on Tier II & III cities Setting up a Gold refinery to add to feedstock Retail stores to assist in procuring gold for refinery Canalising Agency status to allow direct gold import Domestic expansion to allow reach to final customer Setting up a Gold refinery to add to feedstock Retail stores to assist in procuring gold for refinery Canalising Agency status to allow direct gold import Domestic expansion to allow reach to final customer Tie up with more domestic and international designers Targeting international foray with overseas subsidiaries Tie with stores like Vishal Megamart - high footfall stores Tie up with more domestic and international designers Targeting international foray with overseas subsidiaries Tie with stores like Vishal Megamart - high footfall stores Customer Diversification Product Portfolio Enhancements Capacity EnhancementStrengthening Retail Foray Integration Pursue Alliances

15 15 Investment Highlights Designs for both class & mass Capacity enhancement & margin improvement One of the largest organised players Retail plans to tap domestic markets Backward & forward integration plans Insulated & hedged Gold Jewellery business Yet to truly unfold

16 Thank You


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