MIRA INFORM REPORT
|
Report Date : |
08.12.2012 |
IDENTIFICATION DETAILS
|
Name : |
K. G. K.
DIAMONDS CO., LTD |
|
|
|
|
Registered Office : |
29th
Floor, |
|
|
|
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Country : |
|
|
|
|
|
Financials (as on) : |
31.03.2010 |
|
|
|
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Date of Incorporation : |
22.03.2001 |
|
|
|
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Com. Reg. No.: |
0105544028744 |
|
|
|
|
Legal Form : |
Private Limited Company |
|
|
|
|
Line of Business : |
Importer, distributor and exporter of diamonds and gemstones |
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No. of Employees : |
12 employees |
RATING & COMMENTS
|
MIRA’s Rating : |
B |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
|
Status : |
Moderate |
|
Payment
Behaviour : |
No Complaints |
|
Litigation : |
Clear |
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 – March 31st, 2012
|
Country Name |
Previous Rating (31.12.2011) |
Current Rating (31.03.2012) |
|
Thailand |
b1 |
b1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
Off-credit |
D |
Company name
K. G. K.
DIAMONDS CO., LTD.
SUMMARY
BUSINESS
ADDRESS : 29th FLOOR,
GEMS TOWER,
1249/196
CHAROENKRUNG ROAD, SURIYAWONGSE,
BANGRAK,
BANGKOK
10500, THAILAND
TELEPHONE : [66] 2267-4528-9
FAX :
[66] 2267-4530
E-MAIL
ADDRESS : kgkdiabkk@kgkgroup.com
kgk_dia@samart.com
REGISTRATION
ADDRESS : SAME
AS BUSINESS ADDRESS
ESTABLISHED
: 2001
REGISTRATION
NO. : 0105544028744
CAPITAL REGISTERED : BHT. 24,000,000
CAPITAL PAID-UP : BHT.
24,000,000
FISCAL YEAR CLOSING DATE : MARCH 31
LEGAL
STATUS : PRIVATE LIMITED
COMPANY
EXECUTIVE : MR. HENCHAND SURANA,
INDIAN
MANAGING DIRECTOR
NO.
OF STAFF : 12
LINES
OF BUSINESS : DIAMONDS AND
GEMSTONES
IMPORTER, DISTRIBUTOR
AND EXPORTER
CORPORATE PROFILE
OPERATING
TREND : STABLE
PRESENT
SITUATION : OPERATING NORMALLY
REPUTATION : GOOD
WITH NORMAL BUSINESS
ENGAGEMENT
MANAGEMENT
STANDARD : MANAGEMENT WITH
FAIR PERFORMANCE
HISTORY
The
subject was established
on March 22,
2001 as a
private limited company under
the name style
K. G. K. DIAMONDS CO., LTD., by
a joint venture
among Thai, Indian
and United Arab Emirate groups, with
the objective to
engage in diamond
trading business. It
currently employs 12
staff. The subject
is also a
member of KGK
group of companies,
the leading in diamonds and
jewelry manufacturing and
trading business.
The subject’s registered address is 1249/196
Gems Tower, Charoenkrung Rd., Suriyawongse, Bangrak,
Bangkok 10500, and
this is the
subject’s current operation
address.
THE BOARD OF DIRECTORS
|
Name |
|
Nationality |
Age |
|
|
|
|
|
|
Mr. Hemchand Surana |
|
Indian |
48 |
|
Mr. Sanjay Navrattan Kothari |
|
Indian |
46 |
AUTHORIZED PERSON
One of the
above directors can
sign on behalf
of the subject
with company’s affixed.
MANAGEMENT
Mr. Hemchand Surana is
the Managing Director.
He is Indian
nationality with the
age of 48 years
old.
BUSINESS OPERATIONS
The subject is engaged
in trading business, including
import, supply and export
wide range of
diamonds and gemstones.
PURCHASE
The exported products
are purchased from
local suppliers.
IMPORT
80% of
the products is
imported from India,
Belgium, Hong Kong,
U.A.E, Israel, South
Africa, and the
remaining 20% is
purchased from local
suppliers.
SALES
90% of the
products are sold locally
to traders and
manufacturers, the remaining
10% is exported
to Hong Kong,
United States of
America, Japan, Australia
and European countries.
SUBSIDIARY AND AFFILIATED COMPANY
The subject is not
found to have any
subsidiary nor affiliated
company here in
Thailand.
LITIGATION
Bankruptcy and Receivership
There are no
litigation on bankruptcy
and receivership cases
filed against the
subject found at
Legal Execution Department
for the past
five years.
Others
There are no
legal suits filed
against the subject
for the past
two years.
CREDIT
Sales are by
cash or on
the credits term
of 30-60 days.
Local bills are
paid by cash
or on the
credits term of
30-60 days.
Imports are by
L/C at sight
or T/T.
Exports are against
T/T.
BANKING
Bangkok Bank Public
Co., Ltd.
EMPLOYMENT
The subject
employs 12 staff.
LOCATION
DETAILS
The
premise is rented
for administrative office
at the heading
address. Premise is
located in a
prime commercial area.
COMMENT
The
subject is a leading
diamond trader. Most of the products
are re-exported to
overseas dealers, and some of
the products are
supplied to leading
and famous jewelry
manufactures in domestic
market. Subject reported
an outstanding growth in
2010. While current
demand has continuously
increased with strong purchasing
from Asian and
European markets, while
consumption in U.S.A.
remains slow.
FINANCIAL INFORMATION
The
capital was registered
at Bht. 2,000,000
divided into 20,000
shares of Bht. 100
each.
The
capital was increased
later as following:
Bht. 10,000,000
on October 6,
2003
Bht. 14,000,000
on November 10,
2004
Bht. 16,000,000
on December 15,
2004
Bht. 24,000,000
on January 21,
2006
The
latest registered capital
was increased to
Bht. 24,000,000 divided into
240,000 shares of
Bht. 100 each
with fully paid.
THE SHAREHOLDERS LISTED
WERE : [as
at July 30,
2009]
|
NAME |
HOLDING |
% |
|
|
|
|
|
Prime International FZCO Nationality: U.A.E Address : United
Arab Emirate |
117,400 |
48.92 |
|
Mr. Narong Promsin Nationality: Thai Address : 84
Krungkasem Rd., Klongmahanark,
Pomprab, Bangkok |
30,600 |
12.75 |
|
Mr. Manus Oreephap Nationality: Thai Address : 84
Krungkasem Rd., Klongmahanark,
Pomprab, Bangkok |
30,600 |
12.75 |
|
Mr. Sorasak Boonmalert Nationality: Thai Address : 411/29
Krungthep-Kreetha Rd., Huamark, Bangkapi, Bangkok |
30,600 |
12.75 |
|
Ms. Wanphen Kasurong Nationality: Thai Address : 411/29
Krungthep-Kreetha Rd., Huamark,
Bangkapi, Bangkok |
30,600 |
12.75 |
|
Mr. Hemchand Surana Nationality: Indian Address : India |
100 |
0.04 |
|
Mrs. Manjoo Kothari Nationality: Indian Address : Bombay,
India |
100 |
0.04 |
Total Shareholders : 7
NAME OF AUDITOR
& CERTIFIED PUBLIC
ACCOUNTANT NO. :
Ms. Ratree Jeerangsappasuk No.
1916
BALANCE SHEET [BAHT]
The latest financial figures published for March 31, 2010 & 2009 were:
ASSETS
|
Current Assets |
2010 |
2009 |
|
|
|
|
|
Cash in Hand
& at Bank |
754,978.68 |
6,362,020.09 |
|
Trade Accts. Receivable |
313,934,103.50 |
46,540,860.32 |
|
Inventories |
185,365,273.33 |
140,126,964.26 |
|
Deferred Income |
250,107.50 |
- |
|
|
|
|
|
Total Current Assets
|
500,304,463.01 |
193,029,844.67 |
|
Fixed Assets |
208,874.63 |
236,533.56 |
|
Total Assets |
500,513,337.64 |
193,266,378.23 |
LIABILITIES & SHAREHOLDERS'
EQUITY [BAHT]
|
Current
Liabilities |
2010 |
2009 |
|
|
|
|
|
Accrued Tax |
1,286,363.67 |
1,823,780.10 |
|
Trade Accts. Payable |
443,763,262.44 |
137,794,539.00 |
|
Accrued Expenses |
100,227.30 |
155,468.80 |
|
|
|
|
|
Total Current Liabilities |
445,149,853.41 |
139,773,787.90 |
|
Long-term Loan |
14,637,060.00 |
16,048,305.00 |
|
Total Liabilities |
459,786,913.41 |
155,822,092.90 |
|
|
|
|
|
Shareholders' Equity |
|
|
|
|
|
|
|
Share capital : Baht 100
par value authorized, issued
and fully paid share
capital 240,000 shares |
24,000,000.00 |
24,000,000.00 |
|
|
|
|
|
Capital Paid |
24,000,000.00 |
24,000,000.00 |
|
Retained Earning - Unappropriated |
16,726,424.23 |
13,444,285.33 |
|
Total Shareholders' Equity |
40,726,424.23 |
37,444,285.33 |
|
Total Liabilities & Shareholders' Equity |
500,513,337.64 |
193,266,378.23 |
PROFIT & LOSS ACCOUNT
|
Sale |
2010 |
2009 |
|
|
|
|
|
Sales |
645,428,884.52 |
100,188,094.93 |
|
Interest Income |
8,865.39 |
- |
|
Total Sales |
645,437,749.91 |
100,188,094.93 |
|
Expenses |
|
|
|
|
|
|
|
Cost of Goods
Sold |
647,666,811.25 |
94,914,338.63 |
|
Selling & Administrative Expenses |
10,310,191.91 |
2,543,908.03 |
|
Total Expenses |
657,977,003.16 |
97,458,246.66 |
|
|
|
|
|
Profit / [Loss] before Interest
Expenses |
[12,539,253.25] |
2,729,848.27 |
|
Loss on Exchange Rate |
17,216,797.00 |
[1,852,158.04] |
|
Interest Expenses |
- |
[184,991.43] |
|
Income Tax |
[1,403,265.68] |
[207,859.33] |
|
|
|
|
|
Net Profit / [Loss] |
3,274,278.07 |
484,839.47 |
FINANCIAL ANALYSIS
|
ITEM |
UNIT |
2010 |
2009 |
|
|
|
|
|
|
LIQUIDITY RATIO |
|
|
|
|
CURRENT RATIO |
TIMES |
1.12 |
1.38 |
|
QUICK RATIO |
TIMES |
0.71 |
0.38 |
|
|
|
|
|
|
ACTIVITY RATIO |
|
|
|
|
FIXED ASSETS TURNOVER |
TIMES |
3,090.03 |
423.57 |
|
TOTAL ASSETS TURNOVER |
TIMES |
1.29 |
0.52 |
|
INVENTORY CONVERSION PERIOD |
DAYS |
104.46 |
538.87 |
|
INVENTORY TURNOVER |
TIMES |
3.49 |
0.68 |
|
RECEIVABLES CONVERSION PERIOD |
DAYS |
177.53 |
169.56 |
|
RECEIVABLES TURNOVER |
TIMES |
2.06 |
2.15 |
|
PAYABLES CONVERSION PERIOD |
DAYS |
250.09 |
529.90 |
|
CASH CONVERSION CYCLE |
DAYS |
31.91 |
178.52 |
|
|
|
|
|
|
PROFITABILITY
RATIO |
|
|
|
|
COST OF GOODS SOLD |
% |
100.35 |
94.74 |
|
SELLING & ADMINISTRATION |
% |
1.60 |
2.54 |
|
INTEREST |
% |
- |
0.18 |
|
GROSS PROFIT MARGIN |
% |
(0.35) |
5.26 |
|
NET PROFIT MARGIN BEFORE EX. ITEM |
% |
(1.94) |
2.72 |
|
NET PROFIT MARGIN |
% |
0.51 |
0.48 |
|
RETURN ON EQUITY |
% |
8.04 |
1.29 |
|
RETURN ON ASSET |
% |
0.65 |
0.25 |
|
EARNING PER SHARE |
BAHT |
13.64 |
2.02 |
|
|
|
|
|
|
LEVERAGE RATIO |
|
|
|
|
DEBT RATIO |
TIMES |
0.92 |
0.81 |
|
DEBT TO EQUITY RATIO |
TIMES |
11.29 |
4.16 |
|
TIME INTEREST EARNED |
TIMES |
- |
14.76 |
|
|
|
|
|
|
ANNUAL GROWTH |
|
|
|
|
SALES GROWTH |
% |
544.22 |
|
|
OPERATING PROFIT |
% |
(559.34) |
|
|
NET PROFIT |
% |
575.33 |
|
|
FIXED ASSETS |
% |
(11.69) |
|
|
TOTAL ASSETS |
% |
158.98 |
|
%2008-Dec-2012_files/image002.gif)
PROFITABILITY RATIO
|
Gross Profit Margin |
(0.35) |
Deteriorated |
Industrial
Average |
10.37 |
|
Net Profit Margin |
0.51 |
Impressive |
Industrial
Average |
(0.89) |
|
Return on Assets |
0.65 |
Impressive |
Industrial
Average |
(1.19) |
|
Return on Equity |
8.04 |
Impressive |
Industrial
Average |
(3.06) |
Gross Profit Margin used to assess a firm's financial health by revealing
the proportion of money left over from sales after accounting for the cost of
goods sold. Gross profit margin serves as the source for paying additional
expenses and future savings. The company's figure is -0.35%. When compared with
the industry average, the ratio of the company was lower. This indicated that
company was originated from the problems
with control over its costs.
Net Profit Margin is the indicator of the company's efficiency in that
net profit takes into consideration all expenses of the company. A low profit
margin indicates a low margin of safety, higher risk that a decline in sales
will erase profits and result in a net loss. The company's figure is 0.51% compared with those of its average
competitors in the same industry, indicated that business was an efficient
operator in a dominant position within
its industry.
Return on Assets measures how efficiently profits are being generated
from the assets employed in the business when compared with the ratios of firms
in a similar business. A low ratio in comparison with industry averages
indicates an inefficient use of business assets. Return on Assets ratio is 0.65%, higher figure when compared with those
of its average competitors in the same industry, indicated that business was an
efficient profit in a dominant position
within its industry.
Return on Equity indicates how profitable a company is by comparing its
net income to its average shareholders' equity, ROE measures how much the
shareholders earned for their investment in the company. Return on Equity ratio
is 8.04%, higher figure when compared with those of its average competitors in
the same industry, indicated that business was an efficient profit in a
dominant position within its industry.
Trend of the average
competitors in the same industry for last 5 years
Return on Assets Downtrend
Return on Equity Downtrend
%2008-Dec-2012_files/image004.gif)
LIQUIDITY RATIO
|
Current Ratio |
1.12 |
Acceptable |
Industrial
Average |
1.81 |
|
Quick Ratio |
0.71 |
|
|
|
|
Cash Conversion Cycle |
31.91 |
|
|
|
The Current Ratio is to ascertain whether a company's short-term assets
are readily available to pay off its short-term liabilities. The company's figure
is 1.12 times in 2010, decrease from 1.38 times, then it is generally
considered to have good short-term financial strength. When compared with the
industry average, the ratio of the company was lower.
The Quick Ratio is a liquidity indicator that further refines the
current ratio by measuring the amount of the most liquid current assets there
are to cover current liabilities. The company's figure is 0.71 times in 2010,
increase from 0.38 times, then the company has not enough current assets that presumably
can be quickly converted to cash for pay financial obligations.
The Cash Conversion Cycle measures the number of days a company's cash
is tied up in the production and sales process of its operations and the
benefit from payment terms from its creditors. It meant the company could
survive when no cash inflow was received from sale for 32 days.
Trend of the
average competitors in the same industry for last 5 years
Current Ratio Downtrend
%2008-Dec-2012_files/image006.gif)
%2008-Dec-2012_files/image008.gif)
LEVERAGE RATIO
|
Debt Ratio |
0.92 |
Risky |
Industrial
Average |
0.58 |
|
Debt to Equity Ratio |
11.29 |
Risky |
Industrial
Average |
1.53 |
|
Times Interest Earned |
- |
|
Industrial
Average |
(0.19) |
Debt to Equity Ratio a measurement of how much suppliers, lenders, creditors
and obligors have committed to the company versus what the shareholders have
committed. A lower the percentage means that the company is using less leverage
and has a stronger equity position.
Debt Ratio shows the proportion of a company's assets which are financed
through debt. The company's figure is 0.92 greater than 0.5, most of the
company's assets are financed through debt.
Trend of the
average competitors in the same industry for last 5 years
Debt Ratio Uptrend
Times Interest Earned Downtrend
%2008-Dec-2012_files/image010.gif)
ACTIVITY RATIO
|
Fixed Assets Turnover |
3,090.03 |
Impressive |
Industrial
Average |
8.05 |
|
Total Assets Turnover |
1.29 |
Satisfactory |
Industrial
Average |
1.30 |
|
Inventory Conversion Period |
104.46 |
|
|
|
|
Inventory Turnover |
3.49 |
Impressive |
Industrial
Average |
2.00 |
|
Receivables Conversion Period |
177.53 |
|
|
|
|
Receivables Turnover |
2.06 |
Acceptable |
Industrial
Average |
3.00 |
|
Payables Conversion Period |
250.09 |
|
|
|
Trend of the
average competitors in the same industry for last 5 years
Fixed Assets Turnover Downtrend
Total Assets Turnover Downtrend
Inventory Turnover Downtrend
Receivables Turnover Downtrend
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 8th Century B.C.
India, in fact, remained undisputed leader till 18th 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.
-
The diamond jewellery industry in India today may be more than Rs 60000
mil and is rated amongst the fastest growing in the world. Indi ranks
third in the world in domestic diamond consumption.
-
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 30th October 2010 is as
under –
DIAMOND SAGA – DIRTY DOZEN STUCK WITH 2K CR DEBT
This could be the biggest credibility crisis
the Indian diamond industry has ever faced. Fifteen banks run the risk of
losing Rs 2000 crore lent to a dozen diamond firms in Surat. Until about two
months ago, they had not repaid these dues. Bankers believe many
diamantaires borrowed money during the economic downturn two years ago and
diverted funds to businesses like real estate and capital markets. Many of
themselves made money from these businesses but their diamond companies have
gone sick and declared insolvency.
-
Most of the money borrowed from the banks in the name of their diamond
business has been diverted in real estate and the share market. The banks are
not in a position to seize their properties because in many cases, these were
purchased in the name of their relatives and friends.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.54.20 |
|
UK Pound |
1 |
Rs.86.99 |
|
Euro |
1 |
Rs.70.22 |
INFORMATION DETAILS
|
Report Prepared
by : |
MNL |
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
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 |
|
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 |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively below
average. |
Small |
|
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 |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
---- |
NB |
New Business |
---- |
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%)
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.