MIRA INFORM REPORT

 

 

Report Date :

14.01.2013

 

IDENTIFICATION DETAILS

 

Name :

KUWAYAMA CORPORATION

 

 

Registered Office :

2-23-21 Higashi-Ueno Taitoku Tokyo 110-0015

 

 

Country :

Japan

 

 

Financials (as on) :

31.03.2012

 

 

Date of Incorporation :

April, 1970

 

 

Legal Form :

Limited Company

 

 

LINE OF BUSINESS :

MANUFACTURES AND WHOLESALES PRECIOUS METALS & JEWELRY, GOLD & PLATINUM NECKLACES & BRACELETS, LOOSE DIAMONDS & PEARLS, JEWELRY PARTS, OTHER (--100%)

 

 

No. of Employees :

1,179

 

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)

Japan

A1

A1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

 

 

 

japan - ECONOMIC OVERVIEW

 

In the years following World War II, government-industry cooperation, a strong work ethic, mastery of high technology, and a comparatively small defense allocation (1% of GDP) helped Japan develop a technologically advanced economy. Two notable characteristics of the post-war economy were the close interlocking structures of manufacturers, suppliers, and distributors, known as keiretsu, and the guarantee of lifetime employment for a substantial portion of the urban labor force. Both features are now eroding under the dual pressures of global competition and domestic demographic change. Japan's industrial sector is heavily dependent on imported raw materials and fuels. A tiny agricultural sector is highly subsidized and protected, with crop yields among the highest in the world. Usually self-sufficient in rice, Japan imports about 60% of its food on a caloric basis. Japan maintains one of the world's largest fishing fleets and accounts for nearly 15% of the global catch. For three decades, overall real economic growth had been spectacular - a 10% average in the 1960s, a 5% average in the 1970s, and a 4% average in the 1980s. Growth slowed markedly in the 1990s, averaging just 1.7%, largely because of the after effects of inefficient investment and an asset price bubble in the late 1980s that required a protracted period of time for firms to reduce excess debt, capital, and labor. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, Japan in 2011 stood as the fourth-largest economy in the world after second-place China, which surpassed Japan in 2001, and third-place India, which edged out Japan in 2011. A sharp downturn in business investment and global demand for Japan's exports in late 2008 pushed Japan further into recession. Government stimulus spending helped the economy recover in late 2009 and 2010, but the economy contracted again in 2011 as the massive 9.0 magnitude earthquake in March disrupted manufacturing. Electricity supplies remain tight because Japan has temporarily shut down almost all of its nuclear power plants after the Fukushima Daiichi nuclear reactors were crippled by the earthquake and resulting tsunami. Estimates of the direct costs of the damage - rebuilding homes, factories, and infrastructure - range from $235 billion to $310 billion, and GDP declined almost 0.5% in 2011. Prime Minister Yoshihiko NODA has proposed opening the agricultural and services sectors to greater foreign competition and boosting exports through membership in the US-led Trans-Pacific Partnership trade talks and by pursuing free-trade agreements with the EU and others, but debate continues on restructuring the economy and reining in Japan's huge government debt, which exceeds 200% of GDP. Persistent deflation, reliance on exports to drive growth, and an aging and shrinking population are other major long-term challenges for the economy.

 

Source : CIA

Company name

 

KUWAYAMA CORPORATION

 

 

REGD NAME

 

KK Kuwayama

 

 

MAIN OFFICE

 

2-23-21 Higashi-Ueno Taitoku Tokyo 110-0015 JAPAN

Tel: 03-3835-7231          -

 

URL:                 http://www.kuwayama.co.jp

E-Mail address: (thru the URL)

 

 

ACTIVITIES  

 

Mfg of precious metals & jewelry

 

 

BRANCHES

 

Kofu, Osaka, Fukuoka

 

 

OVERSEAS   

 

Hong Kong, Belgium, Thailand, China, Indonesia, USA (--affiliated)

 

 

FACTORIES  

 

Toyama; China

 

 

CHIEF EXEC 

 

TAKAHIRO KUWAYAMA, PRES

 

Yen Amount:     In million Yen, unless otherwise stated

 

 

SUMMARY

 

FINANCES                    FAIR                 　         A/SALES          Yen 20,222 M

PAYMENTS                  NO COMPLAINTS          　CAPITAL        Yen 3,013 M

TREND             UP                    　         WORTH            Yen 12,567 M

STARTED                     1970                 　         EMPLOYES      1,179

 

 

COMMENT

 

MFR OF PRECIOUS METALS & JEWELRY 

FINANCIAL SITUATION COSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

           

 

Unit: In Million Yen

Forecast figures for the 31/03/2013 fiscal term.

 

 

HIGHLIGHTS

 

The subject company was established by Yukihiro Kuwayama as Kuwayama Metal Chain Co Ltd, and after merging five subsidiaries, renamed as captioned in Aug 2000.  This is a major mfr and wholesaler of precious metals and jewelry, with gold and platinum necklaces as mainline.  Also produces in China.  Enjoys overwhelming domestic share in sales at chain stores.

 

 

FINANCIAL INFORMATION

 

The sales volume for Mar/2012 fiscal term amounted to Yen 29,222 million, a 16% up from Yen 25,062 million in the previous term.  The recurring profit was posted at Yen 601 million and the net profit at Yen 573 million, respectively, compared with Yen 670 million recurring profit and Yen 602 million net profit, respectively, a year ago. 

 

(Apr/Sept/2012 results): Sales Yen 14,107 million (up 3.9%), operating profit Yen 274 million (down 7.8%), recurring profit Yen 175 million (down 30.9%), net profit Yen 86 million (down 52.9%).  (% compared with the corresponding period a year ago).

           

For the current term ending Mar 2013 the recurring profit is projected at Yen 630 million and the net profit at Yen 580 million, on a 2.7% rise in turnover, to Yen 30,000 million. 

 

The financial situation is considered FAIR and good for ORDINARY business engagements. 

 

 

REGISTRATION

           

Date Registered:          Apr 1970

Legal Status:               Limited Company (Kabushiki Kaisha

Authorized:                  22,329,200 shares

Issued:                         10,381,546 shares

Sum:                            Yen 3,013 million

 

Major shareholders (%): Sanyo Corp (25.0), Yukihiko Kuwayama (18.6), Tsutsumi Jewelry (5.9), Takahiro Kuwayama (5.4), Mikiko Kuwayama (4.1), Company’s Treasury Stock (3.4), MUFG (3.4), Nobuo Aihara (2.8), Hokuriku Bank (2.6), Employees’ S/Holding Assn (2.5)

 

No. of shareholders: 1,179

 

Listed on the S/Exchange (s) of: JASDAQ

 

Managements: Yukihiro Kuwayama, ch; Nobuo Aihara, v ch; Takahiro Kuwayama, pres; Kozo Kaminaga, s/mgn dir; Yumio Kobayashi, mgn dir; Hitoshi Saeki, dir; Noriko Harasaki, dir

 

Nothing detrimental is known as to the commercial morality of executives.

 

Related companies: Kuwayama Europe, Christy Gem NJ, other.

 

 

OPERATION

           

Activities:                     Manufactures and wholesales precious metals & jewelry, gold & platinum necklaces & bracelets, loose diamonds & pearls, jewelry parts, other (--100%)

           

Clients:                        [Wholesalers, chain stores] Christy Gem, FDC Products, Japan Gold, Brilliance International Japan, Sojitz Jewelry, other

            No. of accounts: 1,000

            Domestic areas of activities: Nationwide

Suppliers:                    [Mfrs, wholesalers] Christy Gems, FDC Products, Sojitz Jewelry, K Otsuki Pearl Co, Tanaka Kikinzoku Kogyo Co, Toyota Tsusho Corp, Sumitomo Metal Mining, other

 

 

Payment record:          No Complaints

 

Location:                     Business area in Tokyo.  Office premises at the caption address are owned and

maintained satisfactorily.

 

Bank References:

MUFG (Ueno)

Mizuho Bank (Marunouchi-Chuo)

Relations: Satisfactory

 

 

FINANCES

 

(In Million Yen)

FINANCES: (Consolidated in million yen)

 

　

　

Terms Ending:

31/03/2012

31/03/2011

INCOME STATEMENT

 

 

 

  Annual Sales

　

29,222

25,062

 

  Cost of Sales

23,004

19,451

 

      GROSS PROFIT

6,218

5,610

 

  Selling & Adm Costs

5,390

4,594

 

      OPERATING PROFIT

827

1,015

 

  Non-Operating P/L

-226

-345

 

      RECURRING PROFIT

601

670

　

      NET PROFIT

573

602

BALANCE SHEET

 

 

 

 

  Cash

　

2,707

3,033

 

  Receivables

 

4,342

3,807

 

  Inventory

 

7,443

8,156

 

  Securities, Marketable

　

　

 

  Other Current Assets

522

364

 

      TOTAL CURRENT ASSETS

15,014

15,360

 

  Property & Equipment

6,643

6,820

 

  Intangibles

 

845

917

 

  Investments, Other Fixed Assets

3,799

2,354

 

      TOTAL ASSETS

26,301

25,451

 

  Payables

 

1,093

1,059

 

  Short-Term Bank Loans

7,270

6,750

 

　

 

　

　

 

  Other Current Liabs

1,703

1,564

 

      TOTAL CURRENT LIABS

10,066

9,373

 

  Debentures

 

　

　

 

  Long-Term Bank Loans

2,978

3,494

 

  Reserve for Retirement Allw

467

439

 

  Other Debts

　

222

119

 

      TOTAL LIABILITIES

13,733

13,425

 

      MINORITY INTERESTS

 

 

 

Common stock

3,013

3,013

 

Additional paid-in capital

2,944

2,944

 

Retained earnings

6,576

6,182

 

Evaluation p/l on investments/securities

391

155

 

Others

 

(152)

(63)

 

Treasury stock, at cost

(205)

(205)

 

      TOTAL S/HOLDERS` EQUITY

12,567

12,026

　

      TOTAL EQUITIES

26,301

25,451

CONSOLIDATED CASH FLOWS

 

 

 

 

Terms ending:

31/03/2012

31/03/2011

 

Cash Flows from Operating Activities

　

1,517

1,201

 

Cash Flows from Investment Activities

-1,298

-524

 

Cash Flows from Financing Activities

-507

-822

　

Cash, Bank Deposits at the Term End

　

2,107

2,433

ANALYTICAL RATIOS            Terms ending:

31/03/2012

31/03/2011

 

 

Net Worth (S/Holders' Equity)

12,567

12,026

 

 

Current Ratio (%)

149.16

163.87

 

 

Net Worth Ratio (%)

47.78

47.25

 

 

Recurring Profit Ratio (%)

2.06

2.67

 

 

Net Profit Ratio (%)

1.96

2.40

 

 

Return On Equity (%)

4.56

5.01

 

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.54.54

UK Pound

1

Rs.88.05

Euro

1

Rs.72.29

 

INFORMATION DETAILS

 

Report Prepared by :

SDA

 

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%)

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.