MIRA
INFORM REPORT
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Report Date : |
13.05.2008 |
IDENTIFICATION
DETAILS
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Name : |
KGK DIAMONDS
SHANGHAI LTD. |
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Registered Office : |
Room 6081-6082 6/F Jinmao Tower, No. 88 Century Avenue, Pudong,
Shanghai, 200120 Pr |
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Country : |
China |
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Financials (as on) : |
31.12.2007 |
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Date of Incorporation : |
21.04. 2004 |
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Com. Reg. No.: |
310115400148758 |
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Legal Form : |
Wholly Foreign-Owned Enterprise |
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Line of Business : |
Selling Diamonds. |
RATING &
COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Status : |
Satisfactory |
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Payment Behaviour : |
No Complaints |
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Litigation : |
Clear |
name & address
KGK DIAMONDS
SHANGHAI LTD.
ROOM 6081-6082 6/F JINMAO TOWER, NO. 88
CENTURY AVENUE, PUDONG,
SHANGHAI, 200120 PR CHINA
88 66081-6082
TEL: 86 (0) 21-50470226 FAX: 86 (0) 21-50470546
EXECUTIVE SUMMARY
INCORPORATION DATE : APR. 21, 2004
REGISTRATION NO. : 310115400148758
REGISTERED LEGAL FORM : WHOLLY FOREIGN-OWNED
ENTERPRISE
STAFF STRENGTH :
25
REGISTERED CAPITAL : USD 3,100,000
BUSINESS LINE :
TRADING
TURNOVER :
cny 83,740,000 (AS OF DEC. 31, 2007)
EQUITIES :
cny 6,380,000 (AS OF DEC. 31, 2007)
PAYMENT :
AVERAGE
MARKET CONDITION : AVERAGE
FINANCIAL CONDITION : failry STABLE
OPERATIONAL TREND : fairly steady
GENERAL REPUTATION : AVERAGE
EXCHANGE RATE :
CNY 7.00= USD 1
Adopted abbreviations:
ANS - amount not stated
NS - not stated
SC - subject company (the company inquired by you)
NA - not available
CNY - China Yuan Ren Min Bi
SC was registered as a wholly foreign-owned enterprise at local Administration for Industry & Commerce (AIC - The official body of issuing and renewing business license) on Apr. 21, 2004.
Company Status: Wholly foreign-owned enterprise This form of business in PR
China is defined as a legal person. It is a limited co. established within
the territories of PR China with capital provided totally by the foreign
investors. More than one foreign investor may jointly invest in a wholly
foreign-owned enterprise. The investing party/parties solely exercise
management, reap profit and bear risks and liabilities by themselves. This
form of companies usually have a limited duration is extendible upon
approval of Examination and Approval Authorities.
SC’s registered business scope includes diamonds trade in Shanghai
Diamond Exchange (including transit trade, processing trade, importing and
exporting.
SC is mainly
engaged in selling diamonds.
Mr. SANJAY NAVIATTAN KOTHARI has been
chairman of SC since 2004.
SC is known
to have approx. 25 employees at present.
SC is
currently operating at the above stated address, and this address houses its
operating office in the commercial zone of Shanghai. Our checks reveal that SC
rents the total premise about 100 square meters.
http://www.kgkgroup.com.
It is the website of KGK Group. The design is professional and the content is
well organized. At present it is in English version.
No significant events or changes were found during our checks with local
AIC.
MAIN SHAREHOLDERS:
Name %
of Shareholding
KGK Diamonds (HK) Ltd. 100
Address:
14/F, Chevalier House, 45-51 Chatham Road South, TST, Kln, HK
Phone No:
27239828
Fax No:
27397584
Email:
kgkhk@kgkgroup.com
Business:
supply diamonds of all sizes, clarify and cut for the manufacture of
jewelry
The KGK Group is a global corporation based in India with fully
integrated operations in diamonds and colored gemstones. KGK is known worldwide
for its superlative products, exemplary quality, international standards, and
its impeccable reputation for customer service.
l
Chairman:
Mr. SANJAY NAVIATTAN KOTHARI,
Indian, in his 30’s with university education. He is currently responsible for
the overall management of SC.
Working Experience(s):
From 2004 to present
Working in SC as chairman;
At
present
Working in KGK Diamonds Shenzhen Ltd. as chairman.
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General Manager:
Mr. Andy, Indian, in his 30’s with university education. He is currently
responsible for the daily management of SC.
Working Experience(s):
From 2004 to present
Working in SC as general
manager.
SC is mainly
engaged in selling diamonds.
SC’s products
mainly include: diamonds.
SC sources its
materials 20% from domestic market, and 80% from the overseas market, mainly
European countries. SC sells 80% of its products in domestic market, and 20% to
the overseas market, mainly American and European countries.
The buying terms of SC include Check, T/T, L/C and Credit of 30-60 days.
The payment terms of SC include T/T, L/C and Credit of 30-60 days.
*Major Supplier:
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KGK Diamonds (HK) Ltd.
SC is
not known to have any subsidiary at present.
Overall payment appraisal:
( ) Excellent (
) Good (X) Average (
) Fair ( ) Poor
( ) Not yet determined
The appraisal serves as a reference to reveal SC's payments habits and
ability to pay. It is based on the 3
weighed factors: Trade payment
experience (through current enquiry with SC's suppliers), our delinquent
payment and our debt collection record concerning SC.
Trade payment experience : SC refused to release any information of its
domestic suppliers and the trade reference was not available.
Delinquent
payment record : None in our database.
Debt collection record :No overdue amount owed by SC was placed to us for
collection within the last 6 years.
Industrial and Commercial Bank of China Shanghai Branch
AC#N/A
Relationship:
Normal.
Balance Sheet
Unit: CNY’000
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As
of Dec. 31, 2006 |
As
of Dec. 31, 2007 |
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Cash & bank |
2,050 |
7,360 |
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Inventory |
2,900 |
2,890 |
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Accounts receivable |
0 |
26,140 |
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Advances to
suppliers |
4,020 |
0 |
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Other
receivables |
100 |
770 |
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Other current
assets |
80 |
760 |
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------------------ |
------------------ |
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Current assets |
9,150 |
37,920 |
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Fixed assets net
value |
20 |
14,270 |
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Projects under
construction |
0 |
9,850 |
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Long term
investment |
0 |
0 |
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Other assets |
10 |
20 |
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------------------ |
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Total assets |
9,180 |
62,060 |
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============= |
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Short loans |
0 |
17,450 |
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Accounts payable |
6,000 |
36,910 |
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Advances from
clients |
1,200 |
320 |
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Taxes payable |
-100 |
-1,620 |
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Salaries payable |
0 |
0 |
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Other payable |
240 |
260 |
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Other current
liabilities |
0 |
2,360 |
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------------------ |
------------------ |
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Current
liabilities |
7,340 |
55,680 |
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Long term
liabilities |
0 |
0 |
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------------------ |
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Total
liabilities |
7,340 |
55,680 |
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Equities |
1,840 |
6,380 |
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-------------------- |
------------------ |
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Total
liabilities & equities |
9,180 |
62,060 |
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Income Statement
Unit: CNY’000
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As of Dec. 31, 2006 |
As of Dec. 31, 2007 |
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Turnover |
2,850 |
83,740 |
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Cost of goods
sold |
2,880 |
93,430 |
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Sales expense |
100 |
180 |
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Management expense |
1,480 |
2,370 |
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Finance expense |
-230 |
-930 |
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Other income |
1,730 |
12,040 |
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Profit before
tax |
280 |
650 |
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Less: profit tax |
50 |
70 |
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Profits |
230 |
580 |
Note: the “Other
Income” is mainly preferential duty for importing diamonds. As the preferential
rate of 2006 was adjusting, SC had little business in 2006.
Important Ratios
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2006 |
2007 |
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*Current ratio |
1.25 |
0.68 |
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*Quick ratio |
0.85 |
0.63 |
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*Liabilities
to assets |
0.80 |
0.90 |
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*Net profit
margin (%) |
8.07 |
0.69 |
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*Return on
total assets (%) |
2.51 |
0.93 |
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*Inventory
/Turnover ×365 |
371days |
13days |
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*Accounts
receivable/Turnover ×365 |
0 |
114days |
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*Turnover/Total
assets |
0.31 |
1.35 |
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* Cost of
goods sold/Turnover |
1.01 |
1.12 |
PROFITABILITY:
AVERAGE
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The turnover of SC appears average in 2006 and fairly good in 2007.
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SC’s net profit margin is fairly good in 2006 but average in 2007.
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SC’s return on total assets is average, and it was declining in 2007.
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SC’s cost of goods sold is too high in 2006 and 2007, comparing with its
turnover.
LIQUIDITY: FAIR
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The current ratio of SC is maintained in a normal level in 2006 but fair
in 2007.
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SC’s quick ratio is maintained in a normal level in 2006 but fair in
2007.
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The accounts receivable of SC is large in 2007.
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The inventory of SC is fairly large in 2006 and average in 2007.
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The short loans are large in 2007.
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SC’s turnover is in a fair level in 2006 but in an average level in
2007, comparing with the size of its total assets.
LEVERAGE: AVERAGE
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The debt ratio of SC is fairly high in 2006 and 2007.
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The risk for SC to go bankrupt is average.
Overall financial
condition of the SC: Fairly Stable.
SC is considered small-sized in its line with fairly stable financial
conditions. The large amount of accounts receivable could be a threat to SC’s
financial condition. Credit dealings of small amount can be considered for it
at present.
RATING
EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
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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 |
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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 |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal commitments. |
Satisfactory |
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26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average. |
Small |
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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 |
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<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
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NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
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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%)