|
Report Date : |
20.01.2014 |
IDENTIFICATION DETAILS
|
Name : |
KGK DIAMONDS (HK) LTD. |
|
|
|
|
Registered Office : |
14/F., Chevalier House, 45-51 Chatham Road South, Tsimshatsui, Kowloon |
|
|
|
|
Country : |
Hong Kong |
|
|
|
|
Date of Incorporation : |
27.10.2000 |
|
|
|
|
Com. Reg. No.: |
31329946 |
|
|
|
|
Legal Form : |
Private Limited Company |
|
|
|
|
Line of Business : |
Manufacturer and Exporter of All kinds of diamonds. |
|
|
|
|
No. of Employees : |
30. (Including associates in
Hong Kong) |
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 – March, 31st, 2013
|
Country Name |
Previous Rating (31.12.2012) |
Current Rating (31.03.2013) |
|
Hong Kong |
A2 |
A1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
Off-credit |
D |
HONG KONG - ECONOMIC OVERVIEW
Hong Kong has a free market economy, highly dependent on
international trade and finance - the value of goods and services trade,
including the sizable share of re-exports, is about four times GDP. Hong Kong
levies excise duties on only four commodities, namely: hard alcohol, tobacco,
hydrocarbon oil, and methyl alcohol. There are no quotas or dumping laws. Hong
Kong's open economy left it exposed to the global economic slowdown that began
in 2008. Although increasing integration with China, through trade, tourism,
and financial links, helped it to make an initial recovery more quickly than
many observers anticipated, it again faces a possible slowdown as exports to
the Euro zone and US slump. The Hong Kong government is promoting the Special
Administrative Region (SAR) as the site for Chinese renminbi (RMB)
internationalization. Hong Kong residents are allowed to establish
RMB-denominated savings accounts; RMB-denominated corporate and Chinese
government bonds have been issued in Hong Kong; and RMB trade settlement is
allowed. The territory far exceeded the RMB conversion quota set by Beijing for
trade settlements in 2010 due to the growth of earnings from exports to the
mainland. RMB deposits grew to roughly 9.1% of total system deposits in Hong
Kong by the end of 2012, an increase of 59% from the previous year. The
government is pursuing efforts to introduce additional use of RMB in Hong Kong
financial markets and is seeking to expand the RMB quota. The mainland has long
been Hong Kong's largest trading partner, accounting for about half of Hong
Kong's exports by value. Hong Kong's natural resources are limited, and food
and raw materials must be imported. As a result of China's easing of travel
restrictions, the number of mainland tourists to the territory has surged from
4.5 million in 2001 to 34.9 million in 2012, outnumbering visitors from all
other countries combined. Hong Kong has also established itself as the premier
stock market for Chinese firms seeking to list abroad. In 2012 mainland Chinese
companies constituted about 46.6% of the firms listed on the Hong Kong Stock
Exchange and accounted for about 57.4% of the Exchange's market capitalization.
During the past decade, as Hong Kong's manufacturing industry moved to the
mainland, its service industry has grown rapidly. Growth slowed to 5% in 2011,
and less than 2% in 2012. Credit expansion and tight housing supply conditions
caused Hong Kong property prices to rise rapidly and inflation to rise 4.1% in
2012. Lower and middle income segments of the population are increasingly unable
to afford adequate housing. Hong Kong continues to link its currency closely to
the US dollar, maintaining an arrangement established in 1983.
|
Source
: CIA |
KGK DIAMONDS (HK)
LTD.
14/F., Chevalier House, 45-51 Chatham Road South, Tsimshatsui, Kowloon,
Hong Kong.
PHONE: 852-2723 9828, 2733 0700
FAX: 852-2739 7584, 2723 8055
E-MAIL: kgk.hk@kgkmail.com
kgkhk@kgkgroup.com
Managing Director: Mr. Sanjay
Navrattan Kothari
Incorporated on: 27th
October, 2000.
Organization: Private
Limited Company.
Capital: Nominal: HK$90,000,000.00
Issued: HK$89,700,002.00
Business Category: Diamond Trader.
Employees:
30. (Including associates in Hong Kong)
Main Dealing Banker: The Royal Bank of Scotland N.V., Hong Kong Branch.
Banking Relation: Very
Good.
KGK DIAMONDS (HK)
LTD.
Registered Head
Office:-
14/F., Chevalier House, 45-51 Chatham Road South, Tsimshatsui, Kowloon,
Hong Kong.
China Factory:-
KGK Jewellery Manufacturing Ltd.000000000
Panyu, Guangdong Province, China.
[Tel: (86-20) 3480 6744, 3999
0700
Fax: (86-20) 3480 6749, 3480
6759
E-mail: jewchina@kgkgroup.com
entice@kgkmail.com]
Holding Company:-
United Pacific Excel Ltd., British Virgin Islands.
Associated/Affiliated
Companies:-
KGK Group of Companies
DDK LLC, Russia.
Far East Gems Inc., China.
K Jewels (Pty) Ltd., South Africa.
K.G.K. Diamonds B.V.B.A., Belgium.
KGK Creation Guangzhou Ltd., China.
KGK Creations (India) Pvt. Ltd., India.
KGK Creations Pvt. Ltd., India.
KGK Diamond Israel Ltd., Israel.
KGK Diamonds & Jewellery DMCC, UAE.
KGK Diamonds & Jewellery LLC, UAE.
KGK Diamonds (Far East) Inc., Japan.
KGK Diamonds (India) Pvt. Ltd., India.
KGK Diamonds (Shanghai) Ltd., China.
KGK Diamonds (SZ) Co. Ltd., China.
KGK Diamonds (Taiwan) Ltd., Taiwan.
KGK Diamonds Co. Ltd., Thailand.
KGK Diamonds LLC, USA.
KGK Enterprises, India.
KGK Entice Jewellery (Shenzhen) Ltd., China.
KGK Gems (HK) Ltd., Hong Kong.
KGK Gems Ltd., Thailand.
KGK Gems, India.
KGK Investment USA (HK) Ltd., Hong Kong.
KGK Jewellery (China) Ltd., Hong Kong.
KGK Jewellery (HK) Ltd., Hong Kong.
KGK Jewellery Inc., Japan.
KGK Jewellery Inc., USA.
KGK Jewellery LLC, USA.
KGK Jewellery Manufacturing Ltd., China.
KGK Jewellery Manufacturing Ltd., Hong Kong.
KGK Jewelry Inc., China.
KGK Jewelry Manufacturing Ltd., Japan.
KGK Jewelry Pvt. Ltd., India.
KGK Jewels (Pty) Ltd., South Africa.
KGK Mining (HK) Ltd., Hong Kong.
KGK Properties (HK) Ltd., Hong Kong.
KGK Real Estate (HK) Ltd., Hong Kong.
M.B.K. Diamonds GmbH, Germany.
Precious Trade Inc., USA.
S. D. Diamond LLC, Russia.
Star Rough Diamonds (Pty) Ltd., South Africa.
etc.
31329946
0735843
Managing Director: Mr. Sanjay
Navrattan Kothari
Nominal Share Capital: HK$90,000,000.00
(Divided into 90,000,000 shares of HK$1.00 each)
Issued Share Capital: HK$89,700,002.00
(As per registry dated 27-10-2012)
|
Name |
|
No. of shares |
|
United Pacific Excel Ltd. 263 Main Street, P.O. Box 2196, Road Town, Tortola, British Virgin
Islands. |
|
88,000,000 |
|
Sanjay Navrattan KOTHARI |
|
1,700,001 |
|
Manju KOTHARI |
|
1 |
|
|
|
––––––––– |
|
|
Total: |
89,700,002 ======== |
(As per registry dated 05-08-2013)
|
Name (Nationality) |
Address |
|
Manju KOTHARI |
House A, 8623 Tai Po Road, Shatin, New
Territories, Hong Kong. |
|
Sanjay Navrattan KOTHARI |
House A, 8623 Tai Po Road, Shatin, New
Territories, Hong Kong. |
(As per registry dated 10-01-2013)
|
Name |
Address |
Co.
No. |
|
Louis Lai & Luk Company Secretarial
Services Ltd. |
9/F., Surson Commercial Building, 140-142
Austin Road, Tsimshatsui, Kowloon, Hong Kong. |
0686503 |
The subject was incorporated on 27th
October, 2000 as a private limited liability company under the Hong Kong
Companies Ordinance.
Apart from these, neither material change
nor amendment has been ever traced and noted.
Activities: Manufacturer and Exporter.
Lines: All kinds of diamonds.
Brand Name: “Entice”.
Employees: 30.
(Including associates in Hong Kong)
Raw Materials: Imported
from India, other Asian countries, Europe, etc.
Markets: Japan, US, UAE, South Korea,
Australia, Middle East, South Africa, etc.
Terms/Sales:
L/C, T/T or as per
contracted.
Terms/Buying: L/C,
T/T, D/P, etc.
Diamond Federation of Hong Kong, China Ltd.,
Hong Kong.
The Indian Chamber of Commerce Hong Kong,
Hong Kong.
Hong Kong Jewelry Manufacturers’
Association, Hong Kong.
Hong Kong Gemstone Manufacturers’ Association
Ltd., Hong Kong.
Nominal Share Capital: HK$90,000,000.00 (Divided into 90,000,000
shares of HK$1.00 each)
Issued Share Capital: HK$89,700,002.00
Increase of Nominal Capital:-
|
From |
HK$60,000,000.00 |
to |
HK$90,000,000.00 |
on |
04-01-2010 |
Alternation of Issued Capital:-
|
Initially |
paid up |
HK$46,800,002.00 |
|
27-02-2009 |
paid up |
HK$11,700,000.00 |
|
04-03-2010 |
paid up |
HK$31,200,000.00 |
|
|
|
–––––––––––––––– |
|
Total: |
paid up |
HK$89,700,002.00 ============== |
Mortgage or Charge:-
Date of
Debenture: 27-05-2005
Amount: In
consideration of ABN AMRO Bank N.V. agreeing to grant general banking
facilities to KGK Diamonds (HK) Ltd.
Property: All
the Company’s undertaking and property and assets whatsoever and whosesoever
both present and future including all book and other debts revenues and claims
Mortgagee: ABN
AMRO Bank N.V., Hong Kong Branch.
[Now known as The Royal Bank of Scotland N.V.]
Profit or Loss: Operation is
profitable.
Condition:
Keeping in an
active manner.
Facilities:
Making rather
active use of general banking facilities.
Payment:
Met on time.
Commercial Morality: Good.
Bankers:-
The Royal Bank of
Scotland N.V., Hong Kong Branch.
Standard Chartered
Bank (Hong Kong) Ltd., Hong Kong.
Standing:
Very Good.
KGK Diamonds (HK) Ltd. is a subsidiary company of United Pacific Excel
Ltd. which is a BVI-registered firm. The
subject in fact is a member of the KGK Group which is trading in diamond and
related products. It increased its
issued share capital in March 2010.
The subject is trading in the Group’s products. It has got a main associated company located
at its operating address known as KGK Jewellery (HK) Ltd., a Hong
Kong-registered firm managed by the same personnel. The subject has set up at least six retailing
outlets in Hong Kong which are retailing the products of the KGK Group.
The KGK Group is a global corporation based in India with fully
integrated operations in diamonds, coloured gemstones and jewellery. From procurement to manufacturing and from
marketing to retailing, the Group is present across the full value chain of the
industry with offices spread across the world.
Established in 1905, KGK group is one of the oldest Gemstone Houses of
India. It has its own manufacturing
set-up in India, China, South Africa and Russia. Being a DTC Sightholder, KGK receives its
rough directly from DTC.
KGK has its presence in 14 countries, covering major market
globally. KGK deals in diamonds of all
sizes, cut and clarity. KGK also has its fine Jewellery manufacturing units
which is specialized in commercial to high end range products.
KGK’s diamond operation started in 1969 with diamonds trading and
diamond manufacturing activities began in 1982.
Initially KGK was sourcing its rough diamonds from Antwerp which is the
world’s diamond capital. In 1997, KGK
became the DTC Sightholder and started getting rough diamonds directly from
London in addition to Antwerp. In 2005,
KGK got sight in South Africa. This has
facilitated KGK to produce more competitive and cost effective polish diamonds.
KGK has set up marketing offices in all important cities in the world,
and has set up manufacturing units in India, Thailand, China, South Africa and
Russia. These factories have modern
machines for diamond cutting and polishing operated by trained craftsmen. The stones are then assorted and graded into
different lots as per their cut, colour, clarity and size. The Group sources its diamonds and colour
stones from different parts of the world through its offices in Antwerp,
London, Russia and South Africa. The
Group opened its offices in the United Arab Emirates, Germany, Spain, London,
etc.
KGK Group is headed by Mr. Navrattan Kothari, who is the Group
Chairman. Each division of the group is
headed by senior members of the Kothari family who have wide ranging experience
in the industry. The Gemstones business
is managed by Mr. Vinay Kothari and Mr. Prakash Kothari, while the Diamonds and
Jewellery business is under the supervision of Mr. Surendra Kothari,
Mr. Sanjay Kothari, Mr. Sandeep Kothari and Mr. Prashant Kothari.
Currently, the subject is manufacturing the following commodities and
offering clients with the following services:-
|
Product/Service |
Product/Service
Remarks |
|
Jewellery – Diamond |
Include precious stones from India, Thailand, Belgium and Israel
(Importer) |
|
Gemstones and Jade |
Precious stones (Manufacturer) Precious stones (Exporter) Precious stones from India and Thailand (Importer) |
|
Diamond |
From India, Thailand, Belgium and Israel (Importer) |
The followings are some of the significant diamond jewellery products of
the subject:-
Bracelets, diamonte & pearl ornaments, diamond rings, silver diamond
rings, etc.
The Group now has set up a factory in Panyu Guangdong Province, China employing
about 300 persons. The factory is
specialised in diamond jewellery, magnetics and reversibles. In 2004, the subject developed its own brand
name “Entice” which is widely known in Hong Kong, the Middle East and
Belgium.
In China, the Group has had the following firms:-
KGK Diamonds (Shanghai) Ltd.
KGK Diamonds (SZ) Co. Ltd.
KGK Jewellery Manufacturing Ltd.
The second is in Shenzhen Special Economic Zone, China.
The third is factory in Panyu, Guangzhou, Guangdong Province,
China. Besides the Panyu factory, the
Group’s other diamond manufacturing plants are located in India and South
Africa. In these factories, KGK is able
to manufacture quality diamonds in a range of sizes (0.005 to 5.00 ct.),
shapes, qualities (VVS1 to PK), colour and clarity.
The Group’s gemstones such as emeralds, tanzanite, rubies and sapphires
are manufactured by its factories in Jaipur, Thailand and Sri Lanka.
The Jaipur factory of the Group produces jewellery for KGK’s own
showroom and the domestic market.
The Group’s products are exported to Japan, other Asian countries, the
Middle East, North America and Western Europe.
Overall business is active.
The foundation of the KGK Group was laid in the year 1905, when Mr. Shri
Keshrimalji Kothari started trading in coloured gemstones simultaneously from
India and Burma. Assisted by his son,
Mr. Shri Ghisilalji Kothari, the business expanded from Jaipur to Chennai, and
then to Hong Kong. By the 1970’s with
new leadership at the helm of the Group, the business operations diversified
into diamonds and to new global locations such as the United States,
Thailand, Japan, etc. Now KGK Group has
had business concerns in fourteen countries of the world.
In July 2009, Martin Flyer Ltd. [Martin Flyer], a US-based firm,
confirmed its partnership and strategic alliance with KGK Group. This partnership has given Martin Flyer
access to additional diamond supplies to fulfil its needs and grow its brands
according to future plans.
In order to penetrate the international market further, KGK Group has
taken part in fairs and exhibitions held in Hong Kong and other foreign large
cities.
It has taken part in the following shows:-
United States
JCK Las Vegas Show
Europe
Baselworld, Switzerland
Hong Kong
HK International Jewellery Show
HK Jewellery & Gem Fair
China
Shenzhen International Jewellery Fair
Asia (other than Hong Kong and China)
International Jewellery Tokyo, Japan
Bangkok Gems & Jewelry Fair, Thailand
Jaipur Jewellery Show
India International Show
Bangkok Gems & Jewelry Fair, Thailand
Middle East
Dubai International Jewellery Show
In order to penetrate the international market further, the subject has
taken part in fairs and exhibitions held in Hong Kong and other foreign large
cities. For instance, it is going to
take part in “HKTDC Hong Kong International Jewellery Show 2014” which will be
held in Hong Kong Convention and Exhibition Centre, Wanchai, Hong Kong during
the period of 5th to 9th March, 2014.
The overall business of the subject in Hong Kong is active and
good. The subject is fully supported by
the KGK Group. It is sharing the same
office with its associated companies KGK Jewellery Manufacturing Ltd. and KGK
Jewellery (HK) Ltd.
To our knowledge, the total income of KGK Diamonds (India) Pvt. Ltd.
ranges from Rs. 11,000 to 13,000 million.
The consolidated turnover of the Group is very significant.
The history of the subject in Hong Kong is about thirteen years. In view of the background of the subject, on
the whole, consider it good for normal business engagements.
Property information of the company and director:-
1. Property Location: Flat 8 on 14/F. and Flat I on 18/F.,
Star Mansion, 3 Minden Row, Kowloon, Hong Kong.
Owner: KGK Diamonds (HK) Ltd.
Date of Purchase: n.a.
Purchased Price: n.a.
Incumbrances:-
|
Date of Mortgage |
Amount
Consideration |
Mortgagee |
Nature |
|
23-05-2008 |
- |
ABN AMRO Bank N.V., Hong Kong Branch. [Now known as The Royal Bank of Scotland
N.V.] |
Mortgage to secure general banking facilities granted to KGK Diamonds
(HK) Ltd. and KGK Jewellery Manufacturing Ltd. |
2. Property Location: 8/F., Robinson Garden Apartments, 3B
Robinson Road, Hong Kong.
Owner: Sanjay Navrattan Kothari
Date of Purchase: 25-05-1988
Purchased Price: HK$1,700,000 pt.
Incumbrances:-
|
Date of Mortgage |
Amount
Consideration |
Mortgagee |
Nature |
|
23-01-1996 |
- |
Belgian Bank, Hong Kong Branch.
[Business was taken over by Industrial & Commercial Bank of China
(Asia) Ltd.] |
Legal charge to secure banking facilities |
|
16-09-2003 |
- |
Fortis Bank Asia HK, Hong Kong Branch. [Name changed to Belgian Bank but the
business was taken over by Industrial & Commercial Bank of China (Asia)
Ltd.] |
Deed of variation of M/N 6509498 and legal further charge |
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.
-
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 –
-
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.
-
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
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.61.35 |
|
|
1 |
Rs.100.21 |
|
Euro |
1 |
Rs.83.52 |
INFORMATION DETAILS
|
Report Prepared
by : |
NNA |
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.