MIRA
INFORM REPORT
|
Report Date : |
14.12.2012 |
IDENTIFICATION DETAILS
|
Name : |
K.G.K.
DIAMONDS CO., LTD. |
|
|
|
|
Registered Office : |
29th Floor, Gems
Tower, 1249/196
Charoenkrung Road, Suriyawongse, Bangrak, Bangkok 10500 |
|
|
|
|
Country : |
Thailand |
|
|
|
|
Financials (as on) : |
31.03.2012 |
|
|
|
|
Date of Incorporation : |
22.03.2001 |
|
|
|
|
Com. Reg. No.: |
0105544028744 |
|
|
|
|
Legal Form : |
Private Limited Company |
|
|
|
|
Line of Business : |
Importer, distributor and
exporter of diamonds and gemstones |
|
|
|
|
No. of Employees : |
13 employees |
RATING & COMMENTS
|
MIRA’s Rating : |
Ba |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
Status : |
Satisfactory |
|
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 – June 30th, 2012
|
Country Name |
Previous Rating (31.03.2012) |
Current Rating (30.06.2012) |
|
Thailand |
B1 |
B1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
Off-credit |
D |
thailand - ECONOMIC OVERVIEW
With a well-developed infrastructure, a free-enterprise economy,
generally pro-investment policies, and strong export industries, Thailand
enjoyed solid growth from 2000 to 2007 - averaging more than 4% per year - as
it recovered from the Asian financial crisis of 1997-98. Thai exports - mostly
machinery and electronic components, agricultural commodities, and jewelry -
continue to drive the economy, accounting for more than half of GDP. The global
financial crisis of 2008-09 severely cut Thailand's exports, with most sectors
experiencing double-digit drops. In 2009, the economy contracted 2.3%. In 2010,
Thailand's economy expanded 7.8%, its fastest pace since 1995, as exports
rebounded from their depressed 2009 level. Steady economic growth at just below
4% during the first three quarters of 2011 was interrupted by historic flooding
in October and November in the industrial areas north of Bangkok, crippling the
manufacturing sector and leading to a revised growth rate of only 0.1% for the
year. The industrial sector is poised to recover from the second quarter of
2012 onward, however, and the government anticipates the economy will probably
grow between 5.5 and 6.5% for 2012, while private sector forecasts range
between 3.8% and 5.7%.
|
Source : CIA |
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,
2267-4629
FAX :
[66] 2267-4530
E-MAIL
ADDRESS : kgk_dia@samart.com
REGISTRATION
ADDRESS : SAME
AS BUSINESS ADDRESS
ESTABLISHED
: 2001
REGISTRATION
NO. : 0105544028744
TAX
ID NO. : 3030247643
CAPITAL REGISTERED : BHT. 24,000,000
CAPITAL PAID-UP : BHT.
24,000,000
SHAREHOLDER’S PROPORTION : THAI :
51%
FOREIGN :
49%
FISCAL YEAR CLOSING DATE : MARCH 31
LEGAL
STATUS : PRIVATE LIMITED
COMPANY
EXECUTIVE : MR. HEMCHAND SURANA,
INDIAN
MANAGING DIRECTOR
NO.
OF STAFF : 13
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
GOOD 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 be engaged in
diamond trading business.
It currently employs
13 staff. The
subject is also
a member of
KGK group of
companies, the leading
in diamonds and
jewelry manufacturing and
trading.
The subject’s registered address is 29th
Flr., Gems Tower, 1249/196 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 |
50 |
|
Mr. Sanjay Navrattan Kothari |
|
Indian |
48 |
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 50
years old.
BUSINESS OPERATIONS
The subject is engaged
in trading business,
including import and
distribute wide range
of diamonds and
gemstones, as well
as export various
kinds of local
gemstones, diamonds and
jewelry products.
PURCHASE
80% of
the products is
imported from India
and South Africa,
and the remaining
20% mainly export’s
products is purchased
from local suppliers.
MAJOR
SUPPLIERS
KGK
Enterprises Pvt. Ltd. : India
Star
Rough Diamonds Pty.
Ltd. : South
Africa
KGK
Diamonds [I] Pvt.
Ltd. : India
KGK
Gems : India
SALES
Its products are
sold to traders
and manufacturers, both
local and international, mainly to
Hong Kong, United States of
America, Japan, India,
Republic of China
and European countries.
RELATED AND AFFILIATED
COMPANY
K.G.K. Gems Co., Ltd.
Business Type :
Importer and exporter
of diamonds and
gemstones.
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 13
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 2012,
while demand has continuously
increased with strong purchasing
from Asian markets. However, economy
improvement has seen
in US market since
late last year, while consumption
in Europe 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, 2012]
|
NAME |
HOLDING |
% |
|
|
|
|
|
Prime International DMCC Nationality: U.A.E Address : Dubai,
United Arab Emirate |
117,500 |
48.96 |
|
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 |
Total Shareholders : 6
Share Structure [as
at July 30,
2012]
|
Nationality |
Shareholders |
No. of Share |
% Shares |
|
|
|
|
|
|
Thai |
4 |
122,400 |
51.00 |
|
Foreign |
2 |
117,600 |
49.00 |
|
Total |
6 |
240,000 |
100.00 |
NAME OF AUDITOR
& CERTIFIED PUBLIC
ACCOUNTANT NO. :
Ms. Ratree Jeerangsappasuk No.
1916
BALANCE SHEET [BAHT]
The
latest financial figures
published for March
31, 2012 &
2011 were:
ASSETS
|
Current Assets |
2012 |
2011 |
|
|
|
|
|
Cash in Hand
& at Bank |
5,669,735.18 |
6,248,813.30 |
|
Trade Accounts Receivable |
400,983,341.80 |
426,160,748.99 |
|
Account Receivable Director |
- |
1,000,000.00 |
|
Inventories |
377,056,825.93 |
263,119,690.68 |
|
Investment |
510,000.00 |
- |
|
Deferred Income |
- |
13,652.00 |
|
|
|
|
|
Total Current Assets
|
784,219,902.91 |
696,542,904.97 |
|
Fixed Assets |
704,018.17 |
781,055.97 |
|
Total Assets |
784,923,921.08 |
697,323,960.94 |
LIABILITIES &
SHAREHOLDERS' EQUITY [BAHT]
|
Current Liabilities |
2012 |
2011 |
|
|
|
|
|
Accrued Tax |
4,823,797.06 |
2,873,701.05 |
|
Trade Accounts Payable |
613,971,516.27 |
542,259,573.19 |
|
Other Payable |
56,752.24 |
283,761.64 |
|
Accrued Expenses |
380,697.22 |
431,153.16 |
|
Short-term Loan |
92,965,500.00 |
91,304,400.00 |
|
|
|
|
|
Total Current Liabilities |
712,198,262.79 |
637,152,589.04 |
|
Long-term Loan |
13,944,825.00 |
13,695,660.00 |
|
Total Liabilities |
726,143,087.79 |
650,848,249.04 |
|
|
|
|
|
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 |
34,780,833.29 |
22,475,711.90 |
|
Total Shareholders' Equity |
58,780,833.29 |
46,475,711.90 |
|
Total Liabilities &
Shareholders' Equity |
784,923,921.08 |
697,323,960.94 |
PROFIT & LOSS ACCOUNT
|
Revenue |
2012 |
2011 |
|
|
|
|
|
Sales |
1,124,794,929.25 |
700,021,923.43 |
|
Interest Income |
13,274.97 |
21,865.68 |
|
Total Revenues |
1,124,808,204.22 |
700,043,789.11 |
|
Expenses |
|
|
|
|
|
|
|
Cost of Goods
Sold |
1,091,365,832.43 |
697,707,930.82 |
|
Selling and Administrative Expenses |
14,954,834.04 |
13,487,221.22 |
|
Total Expenses |
1,106,320,666.47 |
711,195,152.04 |
|
|
|
|
|
Profit / [Loss] before
Gain on Exchange
Rate, Interest Expenses
& Income Tax |
18,487,537.75 |
[11,151,362.93] |
|
Gain on Exchange Rate |
2,166,096.28 |
21,373,587.99 |
|
Interest Expenses |
[3,075,086.42] |
[1,437,224.93] |
|
Income Tax |
[5,273,731.22] |
[3,035,712.46] |
|
|
|
|
|
Net Profit / [Loss] |
12,304,816.39 |
5,749,287.67 |
FINANCIAL ANALYSIS
|
ITEM |
UNIT |
2012 |
2011 |
|
|
|
|
|
|
LIQUIDITY RATIO |
|
|
|
|
CURRENT RATIO |
TIMES |
1.10 |
1.09 |
|
QUICK RATIO |
TIMES |
0.57 |
0.68 |
|
|
|
|
|
|
ACTIVITY RATIO |
|
|
|
|
FIXED ASSETS TURNOVER |
TIMES |
1,597.68 |
896.25 |
|
TOTAL ASSETS TURNOVER |
TIMES |
1.43 |
1.00 |
|
INVENTORY CONVERSION PERIOD |
DAYS |
126.10 |
137.65 |
|
INVENTORY TURNOVER |
TIMES |
2.89 |
2.65 |
|
RECEIVABLES CONVERSION PERIOD |
DAYS |
130.12 |
222.21 |
|
RECEIVABLES TURNOVER |
TIMES |
2.81 |
1.64 |
|
PAYABLES CONVERSION PERIOD |
DAYS |
205.34 |
283.68 |
|
CASH CONVERSION CYCLE |
DAYS |
50.89 |
76.18 |
|
|
|
|
|
|
PROFITABILITY
RATIO |
|
|
|
|
COST OF GOODS SOLD |
% |
97.03 |
99.67 |
|
SELLING & ADMINISTRATION |
% |
1.33 |
1.93 |
|
INTEREST |
% |
0.27 |
0.21 |
|
GROSS PROFIT MARGIN |
% |
2.97 |
0.33 |
|
NET PROFIT MARGIN BEFORE EX. ITEM |
% |
1.64 |
(1.59) |
|
NET PROFIT MARGIN |
% |
1.09 |
0.82 |
|
RETURN ON EQUITY |
% |
20.93 |
12.37 |
|
RETURN ON ASSET |
% |
1.57 |
0.82 |
|
EARNING PER SHARE |
BAHT |
51.27 |
23.96 |
|
|
|
|
|
|
LEVERAGE RATIO |
|
|
|
|
DEBT RATIO |
TIMES |
0.93 |
0.93 |
|
DEBT TO EQUITY RATIO |
TIMES |
12.35 |
14.00 |
|
TIME INTEREST EARNED |
TIMES |
6.01 |
(7.76) |
|
|
|
|
|
|
ANNUAL GROWTH |
|
|
|
|
SALES GROWTH |
% |
60.68 |
|
|
OPERATING PROFIT |
% |
(265.79) |
|
|
NET PROFIT |
% |
114.02 |
|
|
FIXED ASSETS |
% |
(9.86) |
|
|
TOTAL ASSETS |
% |
12.56 |
|
PROFITABILITY
RATIO
|
Gross Profit Margin |
2.97 |
Deteriorated |
Industrial
Average |
9.67 |
|
Net Profit Margin |
1.09 |
Impressive |
Industrial
Average |
(0.21) |
|
Return on Assets |
1.57 |
Impressive |
Industrial
Average |
(0.26) |
|
Return on Equity |
20.93 |
Impressive |
Industrial
Average |
(0.72) |
Gross Profit Margin used to assess a firm's financial health by revealing
the proportion of money left over from revenues 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 2.97%. When compared with
the industry average, the ratio of the company was lower, 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 1.09%, higher
figure when 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
1.57%, 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 20.93%, 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 Uptrend
Return on Equity Stable
LIQUIDITY RATIO
|
Current Ratio |
1.10 |
Acceptable |
Industrial
Average |
1.67 |
|
Quick Ratio |
0.57 |
|
|
|
|
Cash Conversion Cycle |
50.89 |
|
|
|
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 1.1 times in 2012, increased from 1.09 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 0.57 times in 2012,
decreased from 0.68 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 51 days.
Trend of the
average competitors in the same industry for last 5 years
Current Ratio Downtrend
LEVERAGE RATIO
|
Debt Ratio |
0.93 |
Acceptable |
Industrial
Average |
0.61 |
|
Debt to Equity Ratio |
12.35 |
Risky |
Industrial
Average |
1.71 |
|
Times Interest Earned |
6.01 |
Impressive |
Industrial
Average |
0.68 |
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.
Times Interest Earned measuring a company's ability to meet its debt
obligations. Ratio is 6.02 higher than 1, so the company can pay interest
expenses on outstanding debt.
Debt Ratio shows the proportion of a company's assets which are financed
through debt. The company's figure is 0.93 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 Uptrend
ACTIVITY RATIO
|
Fixed Assets Turnover |
1,597.68 |
Impressive |
Industrial
Average |
11.13 |
|
Total Assets Turnover |
1.43 |
Satisfactory |
Industrial
Average |
1.44 |
|
Inventory Conversion Period |
126.10 |
|
|
|
|
Inventory Turnover |
2.89 |
Impressive |
Industrial
Average |
2.05 |
|
Receivables Conversion Period |
130.12 |
|
|
|
|
Receivables Turnover |
2.81 |
Satisfactory |
Industrial
Average |
3.26 |
|
Payables Conversion Period |
205.34 |
|
|
|
Trend of the
average competitors in the same industry for last 5 years
Fixed Assets Turnover Uptrend
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.54.23 |
|
UK Pound |
1 |
Rs.87.53 |
|
Euro |
1 |
Rs.70.94 |
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.