RAJESH EXPORTS LIMITED

1
RAJESH EXPORTS LIMITED

• All that glitters is Gold

March 2008
2
Important Notice

• This document contains selected information
  regarding Rajesh Exports Limited (the Company).
  It does not purport to be comprehensive or to
  contain all of the information that a prospective
  investor may desire in investigating the Company
  or the securities hence each prospective
  investor should conduct its own independent due
  diligence in connection with any transaction
  involving the securities and seek the advice of
  its own professional advisors. The information
  contained in this document has not been
  independently verified. Neither the Company nor
  any of its affiliates, advisers, officers,
  representatives or agents make or will make any
  representation or warranty, express or implied,
  as to the accuracy or completeness of the
  information contained herein, and any and all
  legal liability or responsibility is expressly
  disclaimed based on or relating to (i)
  information contained in, or errors in or
  omissions from this document, or (ii) the
  recipients use of this presentation, or (iii)
  any other written or oral communications
  transmitted to the recipient or its affiliates,
  advisers, officers, representatives or agents in
  the course of its evaluation of the Company or
  its securities. Accordingly, no information
  contained in this document or any written or oral
  communication transmitted or made available to a
  recipient of this document (i) is, or shall be
  relied upon, as a promise or representation,
  whether as to the past or future performance or
  (ii) will form the basis of any contract.
• This presentation includes statements which may
  constitute forward-looking statements. Although
  the Company believes that the expectations
  contained in such forwardlooking statements are
  conservative and reasonable, they involve many
  subjective assumptions and are subject to risks
  and uncertainties which could cause actual
  results to differ materially. Such statements are
  not guarantees of future performance.
  Accordingly, the Company and its respective
  affiliates, advisers, officers, representatives
  or agents give no (and will not give any)
  assurances, and no representation or warranties
  can be or will be made, as to the accuracy or
  attainability of such projections, estimates or
  other forward-looking statements.
• This document is neither an offering memorandum
  nor an offer or an invitation for the sale or
  purchase of any securities of the Company or a
  recommendation in relation to the foregoing. It
  is not intended to form, and should not be
  treated as, the basis of any investment decision.

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Contents
Contents
Page No.
1

4
Company Overview
2

15
Jewellery Market
3

18
Growth Strategy
4
Recent Developments
31
5
A Quick Recap
35
4
COMPANY OVERVIEW
5
Snapshot
Business
Established in 1989.Head quartered at
Bangalore-India. Manufacturer, wholesaler and
retailer of gold jewellery
Worlds largest gold jewellery manufacturer World
s lowest cost producer of gold jewellery Worlds
largest catalogue of jewellery designs
Key Highlights
12 of gem and jewellery export from India 25 of
gold jewellery export from India 2 of world
gold trade
Market share
STRONG DOMINANCE IN GOLD JEWELLERY TRADE
6
Manufacturing Process
Production commencement..
(A) Machine Chains
Molten gold poured into cast to produce rods
Gold bullion and alloy heated to 1000o C
Further processed as
(B) Manual Process
(C) Casting Process
(A) Machine Chains (for standard gold chains of
various designs)
Wires drawn from gold ingots
Wires then drawn using diamond dyes
Wires wound on spools and mounted
Non-soldered chain is woven
Soldering of chain
Chain without loops
Gold chains of various sizes
Quality check and delivery
7
Manufacturing Process
(B) Manual Process (for hand-made jewelry)
Wire drawing and stamping
Dye cutting
Design fabrication
Design pieces with loose ends
Soldering and polishing
Quality check and delivery
(C) Casted Jewellery (for plain and diamond
jewellery)
Metal master rubber mould making
Wax injection spurring
Investment casting
Burn out of wax
Liquid gold injection
De-sprucing initial polishing
Setting final polishing
Quality check and delivery
8
Saga of Rapid Growth
1.White labelled jewellery 2. Diamond studded
jewellery
Indias largest jewellery manufacturer (6 tpa)
Revenues exceed US 1 billion
Year of Establishment
2007-2012
1996
2006
1960-1989
1989
1995
2003
2007
Promoters engaged in gold jewellery retailing
Worlds largest jewellery manufacturing facility
(250 tpa)
IPO of 2m shares _at_ 400 to face value of INR 10

• 24K Retail and Bangalore Infra ventures launched
• JV with Muthoot Pappachan Group

3. Retailing Shubh, Laabh Oyzterbay
9
Consistent Profitability
10
Summarized Profitability Statement
(In US million)
11
I, II III QUARTER 2007-08 SUMMARISED PROFIT
STATEMENT

• 
  
  

12
Achievements Awards

• Ranked No. 1 Investor Friendly Company in a
  National Survey by Business Today
• The only Premier Trading House in Jewellery
  Sector in India
• Overall Excellence in the category of Gold
  Exports by the Gem Jewellery Export Promotion
  Council for 13 consecutive year
• Karnataka State Government Best Exporter Award
  for past 9 years
• Awarded Gold Trophy for exports by Federation of
  Imports Exports
• Accorded Nominated Agency status to import gold
  for domestic consumption.
• Ranked No. 1 in the Gems Jewellery sector in
  India by Dun Bradstreet
• Ranked as the Second Fastest Growing Company in
  the Large Scale Sector.
• Accorded as the Jeweller of the Year Award by
  Jewellers Association, Bangalore

13
Rajesh Exports ranked as No. 1 Investor Friendly
Company in National Survey by Business Today
14
Rajesh Exports ranked as Indias second fastest
growing company
15
Management Team
16
JEWELLERY MARKET
17
World Market

• Current global gems and jewellery industry US
  85 billion
• (Gold demand is growing at 8-10 p.a. CAGR)
• Global gold market 3,300 tonnes
• Major producers South Africa, USA and Australia
  (45 of total output)
• Major consumers India, USA (2/3 of India), China
  (1/3 of India)

10-year average annual demand for gold (tonnes)
(1996-2005)
18
Indian Market

• India is worlds largest consumer of gold
• At 850 tonnes p.a.
• Valued at US 18 billion
• Growing at 10 pa
• Indian gold demand is firmly embedded in cultural
  and religious traditions (Stridhan)

Indian gold demand (tonnes) and price (1991-2005)
19
GROWTH STRATEGY
20
Mission 2007-2012
Target To increase net margin from 1½ to 10 in
next 5 years
Growth Trajectory Phase I (1960-1989) ?
Retailers with global vision, handicapped by
supply constraints Phase II (1989-1994) ?
Indias first organised jewellery
manufacturer Phase III (1995-2002) ? Indias
largest (6 tpa) plant with world-class RD Phase
IV (2003-2006) ? Worlds largest (250 tpa) plant
turnover gt US 1.5 billion Phase V (2007-2012) ?
Leverage economies of scale and expand margins
by evolving into fully
integrated jewellery company Resources Infrastru
cture ? Worlds largest and worlds
best Management ? Managed worlds largest gold
jewellery business Technology ? 65-person
strong RD, proprietary alloys and processes
29,000 designs Growth Engines Growth Engine 1
? White-labelled jewellery (Margin 15) Growth
Engine 2 ? Diamond studded jewellery (Margin
25) Growth Engine 3 ? Retailing (Margin 10)
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Growth Engine 1

• White-labelled jewellery
• Margin 15
• Global market size US 30-35 billion
• Target share 2
• Status 1,300 exclusive designs developed
  Prototypes approved by large chain-storesacross
  the world, White labelled jewellery sales
  commenced from Q1 /2007/08.

Jewellery Outsourcee to the world
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Growth Engine 2

• Diamond studded jewellery
• Margin 25
• Global market size US 5 billion
• Target share 5
• USP Honest pricing, Global Designs and Finish
• Launched Harmony, Eternal, Solitaire, I-teen,
  Filigree, Southern, Ghazal, Aishwarya and
  Sushmita brands of Diamond Jewellery in the
  domestic and International markets
• 700 exclusive designs have been launched

Adding sparkle to diamondsthe honest way
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Growth Engine 3

• Retailing
• Retailing in India (to be followed by global
  rollout)Margin 10 Indian Market size US 18
  billion Target share 4
• Shubh for mass market, to replace traditional
  jewellers
• Laabh for up-market and elite clientele
• Oyzterbay for the fashion conscious

...with dream team
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Jewellery Retail India

• 96 is in unorganised sector (globally 70 is
  unorganised)
• Very highly fragmented (no pan-India stores)
• Over 400,000 small retailers and 850,000
  goldsmiths
• Branded gold jewellery is a very recent
  phenomenon
• Branded jewellery accounts for only 4 of total
  jewellery market, but growing at 30-40 pa and
  is slated to constitute 10 of total jewellery
  market by 2009
• Quality, consistency and variety of designs hold
  the key to retailing success

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Retail Venture USP

• Punch Mantra (the five doctrines)
• 22K GuaranteeBacked by life-time buyback
  guarantee
• Largest RangeBacked by proprietary library of
  29,000 active designs
• TechnologyProprietary technology to ensure
  standardization, consistency, color, Tarnish
  free etc.
• Competitive PricingPowered by economies of
  scale, lowest manufacturing costs, lowest
  finance cost, technology resulting in lower use
  of gold for same design
• ServicePan-India network of retail showrooms
  providing life-time free repair service at any
  store

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24K Retail

• For sharper focusAll retailing ventures put
  under 100 subsidiary 24K Retail Limited
• Team (ex-Oyzterbay, ex-Titan)Pioneers in
  creating branded retail jewellery in India with
  over 50 man-years of experience
• Team that created super brands Titan,
  Tanishq, Oyzterbay are now part of the team at
  Rajesh Exports

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Shubh

• Shubh means auspicious
• VFM platform (Value for Money)
• For mass market To replace mainstream urban and
  rural jewellery stores
• Consolidation play MOU signed to acquire circa
  100 existing jewelry retail stores,many under
  no-purchase notice,to be re-launched under
  Shubh branded retail stores.
• First Phase Launch in Karnataka has already
  started with 8 stores launched
• 5,000 exclusive designs available at Shubh stores
• To expand to 450 stores over next 3 years

28
Laabh

• Laabh means profit
• Exquisite jewellery for up-market clientele
• Signature range of 3,000 individual jewellery
  designs
• Contemporary and modern designs in wide spectrum
  of plain gold jewelry, diamond jewelry, gold
  coins and solitaires
• To target a major share of the upcoming branded
  retailing
• Mainly urban centric in tier I cities
• 30 Laabh stores have been launched in 23 cities
  across India
• To expand to 150 stores in next 3 years

29
Oyzterbay

• Oyzterbay Jewellery for the Living
• International Lifestyle platform I own it!
• Targeted at youth and rapidly growing upwardly
  mobile economic strata
• To offer jewellery, watches, and accessories
• 1,200 exclusive pieces of jewellery designed for
  the Oyzterbay Collections
• To launch 30 stores in malls and shop in shops
  during Q1 of 2008-09
• To expand to 150 stores in next 3 years

30
Profile transformation
Revenue Mix (2007-2010)
(USD in million)
15 of additional turnover every year (2007-12)
to come from the three Growth Engines
31
Profile transformation
Revenue Mix (2010-2012)
(USD in million)
15 of additional turnover every year (2007-12)
to come from the three Growth Engines
32
RECENT DEVELOPMENTS
33
Corporate Structure
RAJESH EXPORTS LIMITED Manufacturers, Exporters
and Wholesalers
PARENT COMPANY
Manufacture of Gold and Diamond Jewellery, Bulk
Exports, Wholesale, White Label Branded Exports
and Diamond Jewellery Exports.
SUBSIDIARIES
BANGALORE INFRA
24K RETAIL
STORE BRANDS
OYZTERBAY
SHUBH
LAABH
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Bangalore Infra

• To monetise land-bank owned by REL of 170,458.16
  sq. ft of prime commercial space and 137 acres
  of land outside the city municipal zone
• Acquisition cost US 25 million
• Estimated market value US 200 million
• Post-development value US 350 million
• Land bank, primarily in Bangalore foremost
  technology growth engine of India
• Exponential appreciation in land bank value, due
  to low historic value
• To be managed by highly experienced industry
  professionals

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A Quick Recap
36
Key Points

• Lowest cost manufacturer of gold jewellery Most
  advanced technology. Stable existing volume
  business.

Gold processing

• USP 22K Guarantee, Range, Technology, Pricing,
  Service
• 24K Retail Laabh, Shubh, and Oyzterbay

Retail

• Bangalore Infra to monetize land bank

Real Estate

• Zero gold price risk, price-hedging, technology

Operational Excellence
Retailers achieving economies of scale in
manufacturing onto margin expansiontrajectory to
emerge as fully integrated company
37
Market Snapshot
Shareholding Pattern
Excluding US 500 million of term deposits
set-off against Letter of Credit
outstanding Includes Loan against deposit of
US 241m, Secured Debt US 53m, Unsecured
Debt US 7m
38
Thank You!
Rajesh Mehta (Executive Chairman)
Rajesh Exports Limited
(Registered Office) No. 4, Batavia Chambers,
Kumara Krupa Road, Kumara Park (East),
Bangalore 560001, INDIA. Tel [phone]
6735 Fax [phone] Email
cmd_at_rajeshindia.com
(Corporate Office) No.1 Brunton Road,
Bangalore-560001 INDIA. Tel 91 (80)
40239999 Fax [phone] Email
general_at_rajeshindia.com
Please visit us at www.rajeshindia.com