MIRA
INFORM REPORT
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Report Date : |
08.05.2013 |
IDENTIFICATION DETAILS
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Name : |
NAGAHORI CORPORATION |
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Registered Office : |
Tenjin Bldg, 1-15-3 Ueno Taitoku |
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Country : |
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Financials (as on) : |
31.03.2012 |
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Date of Incorporation : |
June, 1962 |
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Legal Form : |
Limited Company |
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Line of business : |
Manufacturer, wholesale of diamond jewelry & fashion jewels |
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No. of Employees : |
657 |
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 |
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 2013
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Country Name |
Previous Rating (31.12.2012) |
Current Rating (31.03.2013) |
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Japan |
A1 |
A1 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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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 small agricultural
sector is highly subsidized and protected, with crop yields among the highest
in the world. While self-sufficient in rice production, Japan imports about 60%
of its food on a caloric basis. 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. Modest economic
growth continued after 2000, but the economy has fallen into recession three
times since 2008. A sharp downturn in business investment and global demand for
Japan's exports in late 2008 pushed Japan 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 and the
ensuing tsunami in March disrupted manufacturing. The economy has largely
recovered in the two years since the disaster, but reconstruction in the Tohoku
region has been uneven. Newly-elected Prime Minister Shinzo ABE has declared
the economy his government's top priority; he has pledged to reconsider his
predecessor's plan to permanently close nuclear power plants and is pursuing an
economic revitalization agenda of fiscal stimulus and regulatory reform and has
said he will press the Bank of Japan to loosen monetary policy. Measured on a
purchasing power parity (PPP) basis that adjusts for price differences, Japan
in 2012 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 2012. The new government will continue a longstanding debate 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.
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Source : CIA |
Company Name
NAGAHORI CORPORATION
REGD NAME
KK Nagahori
MAIN OFFICE
Tenjin Bldg, 1-15-3 Ueno Taitoku Tokyo 110-8546 JAPAN
Tel: 03-3836-4711 Fax:
03-3837-1389
URL: http://www.nagahori.co.jp/
E-Mail address: info@nagahori.co.jp
ACTIVITIES
Mfg, wholesale of diamond jewelry & fashion jewels
BRANCHES
Osaka, Fukuoka
STORE
Ginza
OVERSEAS
Milan, Antwerp, Mumbai
SANOCO Co Ltd (Hong Kong) (subsidiary)
FACTORIES
Mobara (Chiba)
CHIEF EXEC: KEITA NAGAHORI, PRES
& CEO
Yen Amount: In million Yen,
unless otherwise stated
SUMMARY
FINANCES FAIR A/SALES Yen 14,874 M
PAYMENTS NO COMPLAINTS CAPITAL Yen 5,323 M
TREND SLOW WORTH Yen 14,015 M
STARTED 1962 EMPLOYES 657
COMMENT
MFR & WHOLESALER SPECIALIZING DIAMOND JEWELRY & FASHION JEWELS.
FINANCIAL SITUATION CONSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS
ENGAGEMENTS
Unit:
In Million Yen
Forecast (or estimated) figures for 31/03/2013 fiscal term
HIGHLIGHTS
The subject company was established by M Nagahori originally as Nagahori
Pearls KK for wholesaling pearls and pearl jewelry. In Oct 1982 renamed as captioned. In 1973, approved as official member by
Antwerp Diamond Exchange and started diamonds trading, which now are its main
revenue sources. Handles pearls and
other precious stones, too. Consolidated
subsidiary, Soma KK, serves as production arm for gold ingot processing, etc,
including OEM production. Operates JV in
Israel for diamond trading. Provides a
broad range of jewelry brands, offering a full range of items from fashion
accessories to high-end labels. Strong
with sales of high margin brands through department stores nationwide
(currently about 35). In Jul 2005,
acquired 10% stake in Rosy Blue Mfg (PTY) Ltd, S Africa, and started imports of
diamonds. Has Saitama Health Land in
Saitama-Pref. In Nov 2007 founded Royal
Asscher Japan, JV with Royal Asscher Diamond (Antwerp) for importing and mfg
diamond rings, pendant, etc. In Nov
2007, acquired the brand name “Sweet Ten Diamond” from De Beers Group Marketing
and will start selling the products from Mar 2008. The company will expand sales of big diamond
jewelry to department stores dealing with large institutional customers. In the direct management WISP brand for
people in their twenties and thirties, it opened the stand-alone store in Ginza
to improve the brand image. It has
started exports and sales through the Hong Kong subsidiary.
FINANCIAL INFORMATION
The sales volume for Mar/2012 fiscal term amounted to Yen 14,874
million, a 0.2% down from Yen 14,911 million in the previous term. Consumer spending was sluggish for jewelry
and other big-ticket items, which are not for daily necessities. The recurring profit was posted at Yen 545 million
and the net profit at Yen 254 million, respectively, compared with Yen 224
million recurring loss and Yen 73 million net losses, respectively, a year ago.
(Apr/Sept/2012 results): Sales Yen 6,827 million (down 0.1%), operating
loss Yen 122 million (down 11.8%), recurring loss Yen 117 million (down 7.1%),
net profit Yen 11 million (down 70.6%).
(% compared with the same period a year ago).
For the current term ending Mar 2013 the recurring profit is projected
at Yen 590 million and the net profit at Yen 290 million, respectively, on a
1.5% rise in turnover, to Yen 15,100 million.
Sales volume will fall from projections, as active measures, such as
exhibitions, somewhat failed at the term’s start. But sales of high-priced diamond jewelry for
department stores dealing with large institutional customers will continue to
grow.
The financial situation is considered FAIR and good for ORDINARY
business engagements.
REGISTRATION
Date Registered: Jun 1962
Legal Status: Limited Company (Kabushiki Kaisha)
Authorized: 40 million shares
Issued: 16,773,378 shares
Sum: Yen 5,323 million
Major shareholders (%): MF Nagahori Co (11.2), Company’s Treasury Stock
(7.1), Resona Bank (4.6), Dai-ichi Life Ins (4.1), Morihiro Nagahori (4.0), Joyo
Bank (3.1), Keita Nagahori (3.1), SIX SIS Ltd (3.0), Wahei Takeda (2.6), MUFG
(2.4); foreign owners (7.3)
No. of shareholders: 1,543
Listed on the S/Exchange (s) of: Tokyo (Second Section)
Managements: Morihiro Nagahori, ch; Keita Nagahori, pres; Yasuaki
Sakuma, s/mgn dir; Kaoru Tabata, mgn
dir; Ryoji Takada, dir; Koso Nakashiki, dir; Fumihiko Shirakawa, dir
Nothing detrimental is known as to the commercial morality of
executives.
Related companies: Soma KK, KK Jewelry, Sanaco Co (Hong Kong), Brodia
KK, Royal Asscher Japan (Total 3 domestic; 1 overseas)
OPERATION
Activities: Manufactures, processes, imports and partially retails
diamonds, pearls, other gemstones, jewelry products (--98%), health care
industry (2%).
Diamonds and other gemstones are imported.
(Handling brands): Dal Lago, Sonia Rykiel, Yuki Torii, Hana-Kaido,
arut, Pinky & Dianne, Private Label, Annie-j, anan, Lolita Lempicka,
Disney, La Germa, Aqua-Style, Y’Sacos, WISP, other.
Clients: [Department stores, chain stores, jewelry stores] Takashimaya,
Sogo, Vendome Yamada Corp, Marui Corp, Seibu Department Stores, other.
No. of accounts: 500
Domestic areas of
activities: Nationwide
Suppliers: [Mfrs,
wholesalers] Rosy Blue Mfg, Eurostar Diamond Trading, Ishifuku Metal Ind, Dimexon,
other.
Payment record: No Complaints
Location: Business area in Tokyo.
Office premises at the caption address are leased and maintained
satisfactorily.
Bank References:
Resona Bank (Ueno-Chuo)
Mizuho Bank (Marunouchi-Chuo)
Relations: Satisfactory
FINANCES
(In Million Yen)
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FINANCES: (Consolidated in million yen) |
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Terms Ending: |
31/03/2012 |
31/03/2011 |
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INCOME
STATEMENT |
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Annual Sales |
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14,874 |
14,911 |
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Cost of Sales |
8,847 |
9,045 |
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GROSS PROFIT |
6,027 |
5,865 |
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Selling & Adm Costs |
5,404 |
5,630 |
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OPERATING PROFIT |
622 |
235 |
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Non-Operating P/L |
-77 |
-11 |
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RECURRING PROFIT |
545 |
224 |
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NET PROFIT |
254 |
73 |
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BALANCE
SHEET |
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Cash |
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2,022 |
1,576 |
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Receivables |
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1,798 |
1,528 |
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Inventory |
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10,676 |
11,266 |
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Securities, Marketable |
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Other Current Assets |
222 |
383 |
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TOTAL CURRENT ASSETS |
14,718 |
14,753 |
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Property & Equipment |
4,444 |
4,569 |
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Intangibles |
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126 |
153 |
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Investments, Other Fixed Assets |
2,082 |
2,127 |
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TOTAL ASSETS |
21,370 |
21,602 |
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Payables |
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963 |
875 |
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Short-Term Bank Loans |
4,795 |
5,333 |
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Other Current Liabs |
799 |
709 |
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TOTAL CURRENT LIABS |
6,557 |
6,917 |
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Debentures |
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40 |
80 |
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Long-Term Bank Loans |
109 |
120 |
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Reserve for Retirement Allw |
380 |
355 |
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Other Debts |
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269 |
355 |
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TOTAL LIABILITIES |
7,355 |
7,827 |
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MINORITY INTERESTS |
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Capital, Paid-Up |
5,323 |
5,323 |
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Surplus |
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8,692 |
8,451 |
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SHAREHOLDERS' EQUITY |
14,015 |
13,774 |
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TOTAL EQUITIES |
21,370 |
21,602 |
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CONSOLIDATED
CASH FLOWS |
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Terms ending: |
31/03/2012 |
31/03/2011 |
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Cash Flows from Operating Activities |
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1,354 |
1,047 |
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Cash Flows from Investment
Activities |
-290 |
5 |
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Cash Flows from Financing Activities |
-698 |
-1,080 |
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Cash, Bank Deposits at the Term End |
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1,945 |
1,576 |
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ANALYTICAL
RATIOS Terms ending: |
31/03/2012 |
31/03/2011 |
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Net Worth (S/Holders' Equity) |
14,015 |
13,774 |
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Current Ratio (%) |
224.46 |
213.29 |
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Net Worth Ratio (%) |
65.58 |
63.76 |
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Recurring Profit Ratio (%) |
3.66 |
1.50 |
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Net Profit Ratio (%) |
1.71 |
0.49 |
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Return On Equity (%) |
1.81 |
0.53 |
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DIAMOND INDUSTRY – INDIA
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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.
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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.
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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.
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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.
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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.
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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.
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Excerpts from Times of India dated 30th
October 2010 is as under –
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Gem & Jewellery Export Promotion Council in its
statistical data has shown the export of polished diamonds to have increase by
28 % in February 2013. Compared to $ 1.4 bn worth of polished diamond export in
February, 2012, India exported $ 1.84 billion worth of polished diamonds in
February 2013. A senior executive of GJEPC said, “Export of cut and polished
diamonds started falling month-wise after the imposition of 2 % of import duty
on the polished diamonds. But February, 2013 has given a new ray of hope to the
industry as the export of polished diamonds has actually increased by 28 %. It
means the industry is on the track of recovery and round tripping of
diamonds has stopped completely.” Demand has started coming from the US, the
UK, Japan and China. India’s polished diamond export is expected to cross $ 21
bn in 2013-14.
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The banking sector has started exercising restraint
while following prudent risk management norms when lending money to gems and
jewellery sector. This follows the implementation of Basel III accord – a
global voluntary regulatory standard on bank capital adequacy, stress testing
and market liquidity.
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
|
US Dollar |
1 |
Rs.54.27 |
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UK Pound |
1 |
Rs.84.32 |
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Euro |
1 |
Rs.70.99 |
INFORMATION DETAILS
|
Report Prepared
by : |
MNL |
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 |
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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NB |
New Business |
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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%)
This report is issued at your request without any risk
and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its
officials.