MIRA
INFORM REPORT
|
Report Date : |
29.07.2014 |
IDENTIFICATION DETAILS
|
Name : |
UNIGEMS IMPEX
LIMITED |
|
|
|
|
Formerly Known as : |
Unigems Thai
Limited |
|
|
|
|
Registered Office : |
73/4 Moo 3, T. Nadee,
A. Muang, Samutsakorn 74000 |
|
|
|
|
Country : |
|
|
|
|
|
Financials (as on) : |
31.12.2013 |
|
|
|
|
Date of Incorporation : |
18.04.1984 |
|
|
|
|
Com. Reg. No.: |
0105527015168 |
|
|
|
|
Legal Form : |
Private
Limited Company |
|
|
|
|
Line of Business : |
·
Subject was primarily dealing
in diamonds and
gemstones engaged
in international trading
business to import,
distribute and export
a wide range of ferrous & non-ferrous metal
scraps and related
products, including aluminium
scraps, steel scraps,
lead ingot, brass ingot,
copper ingot, aluminium
alloy ingot , to
various industries. |
|
|
|
|
No of Employees : |
approximately 20
(Including Office Staff and
Warehouse Workers) |
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 : |
Slow but Correct |
|
|
|
|
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 01, 2014
|
Country Name |
Previous Rating (31.03.2014) |
Current Rating (01.06.2014) |
|
Thailand |
B1 |
B1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low Risk |
A2 |
|
Moderate Low Risk |
B1 |
|
Moderate Risk |
B2 |
|
Moderate High Risk |
C1 |
|
High Risk |
C2 |
|
Very High Risk |
D |
Thailand ECONOMIC OVERVIEW
With a well-developed infrastructure, a free-enterprise economy,
generally pro-investment policies, and strong export industries, Thailand
achieved steady growth due largely to industrial and agriculture exports -
mostly electronics, agricultural commodities, automobiles and parts, and
processed foods. Unemployment, at less than 1% of the labor force, stands as
one of the lowest levels in the world, which puts upward pressure on wages in
some industries. Thailand also attracts nearly 2.5 million migrant workers from
neighboring countries. The Thai government in 2013 implemented a nation-wide
300 baht ($10) per day minimum wage policy and deployed new tax reforms
designed to lower rates on middle-income earners. The Thai economy has
weathered internal and external economic shocks in recent years. The global
economic recession severely cut Thailand's exports, with most sectors
experiencing double-digit drops. In late 2011 Thailand's recovery was
interrupted by historic flooding in the industrial areas in Bangkok and its
five surrounding provinces, crippling the manufacturing sector. The government
approved flood mitigation projects worth $11.7 billion, which were started in
2012, to prevent similar economic damage, and an additional $75 billion for
infrastructure over the following seven years. This was expected to lead to an
economic upsurge but growth has remained slow, in part due to ongoing political
unrest and resulting uncertainties. Spending on infrastructure will require
re-approval once a new government is seated.
|
Source : CIA |
Company name
UNIGEMS IMPEX
LIMITED
SUMMARY
BUSINESS
ADDRESS : 8th FLOOR,
GEMS TOWER,
1249/66 CHAROENKRUNG
ROAD,
SURIYAWONGSE, BANGRAK,
BANGKOK 10500,
THAILAND
TELEPHONE : [66] 2234-7217,
2267-4745-6
FAX :
[66] 2267-6582
E-MAIL
ADDRESS : unigems.bkk@gmail.com
REGISTRATION
ADDRESS : 73/4
MOO 3, T. NADEE,
A. MUANG,
SAMUTSAKORN 74000,
THAILAND
ESTABLISHED
: 1984
REGISTRATION
NO. : 0105527015168
TAX
ID NO. : 3101294286
CAPITAL REGISTERED : BHT. 35,000,000
CAPITAL PAID-UP : BHT.
35,000,000
SHAREHOLDER’S PROPORTION : THAI :
51.43%
INDIAN
: 48.57%
FISCAL YEAR CLOSING DATE : DECEMBER 31
LEGAL
STATUS : PRIVATE LIMITED
COMPANY
EXECUTIVE : MR.
AHMED IQBAL HABEEB
AHMED SULAIMAN,
INDIAN, MANAGING
DIRECTOR
NO.
OF STAFF : 20
LINES
OF BUSINESS : FERROUS AND
NON-FERROUS METAL SCRAPS
AND RELATED
PRODUCTS
IMPORTER, DISTRIBUTOR
AND EXPORTER
CORPORATE PROFILE
OPERATING
TREND : STABLE
PRESENT
SITUATION : OPERATING NORMALLY
REPUTATION : FAIR
WITH NORMAL BUSINESS
ENGAGEMENT
MANAGEMENT
STANDARD : MANAGEMENT WITH
FAIR PERFORMANCE
HISTORY
The
subject was established
on April 18, 1984
as a private
limited company under
the registered name “Unigems Thai
Limited” by Thai
and Indian groups,
with the objective
to operate an international trading
of ferrous & non-ferrous metal
scraps and related products
to various industries.
On
November 6, 1986 the
subject’s name was changed to
“UNIGEMS IMPEX LIMITED”.
It currently employs
20 staff.
The
subject’s initial registered
address was 8th Flr.,
Gems Tower, 1249/66 Charoenkrung
Rd., Suriyawongse, Bangrak,
Bangkok 10500.
On
October 17, 2012,
the subject’s registered
address was relocated
to 26/4 Soi Sriprasert,
Damrongmukda Rd., T.
Sriboonrueng, A. Muang, Mukdaharn 49000.
On June
19, 2013 the
registered address was
relocated to 73/4 Moo 3,
T. Nadee, A. Muang, Samutsakorn
74000, while the current
operation address is 8th
Flr., Gems Tower, 1249/66 Charoenkrung
Rd., Suriyawongse, Bangrak,
Bangkok 10500.
THE BOARD
OF DIRECTOR
|
Name |
|
Nationality |
Age |
|
|
|
|
|
|
Mr. Ahmed Iqbal Habeeb
Ahmed Sulaiman |
|
Indian |
48 |
AUTHORIZED PERSON
Only the above
director signs on
behalf of the
subject with company’s
affixed.
MANAGEMENT
Mr. Ahmed Iqbal Habeeb
Ahmed Sulaiman is
the Managing Director.
He is Indian
nationality with the
age of 48
years old.
BUSINESS OPERATIONS
The subject is
engaged in international
trading business to
import, distribute and
export a wide
range of ferrous &
non-ferrous metal scraps
and related products,
including aluminium scraps,
steel scraps, lead ingot,
brass ingot, copper
ingot, aluminium alloy
ingot to various
industries.
PURCHASE
The products are
purchased from suppliers
both domestic and
overseas, mainly in
United Arab Emirates.
SALES
The products are
sold and serviced
to customers both
local and overseas,
mainly in India,
Republic of China,
Malaysia and Indonesia.
RELATED AND AFFILIATED
COMPANY
Packtramat Co., Ltd.
Business Type :
Trading company
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
T/T.
Exports are against
T/T.
BANKING
Bangkok
Bank Public Co.,
Ltd.
EMPLOYMENT
The
subject employs approximately
20 office staff
and warehouse workers.
LOCATION
DETAILS
The
premise is rented for
operating administrative office
at the heading
address. Premise is
located in a
prime commercial area.
Warehouse:
-
73/4 Moo 3,
T. Nadee, A. Muang,
Samutsakorn 74000.
Branch:
- 26/4 Soi
Sriprasert, Dumrongmukda
Rd., T. Sriboonrueng,
A. Muang, Mukdaharn 49000
COMMENT
The
company was formed
primarily dealing in
diamonds and gemstones.
During the past
few years, it
has decided to
expand and diversify
the Bangkok, Thailand business
in order to
cater for the
increasing domestic and
Indian sub-continent industrial
demand for commodities
and materials. Later
it was successfully
trading ferrous & non-ferrous scrap, dross
and residues. Its
customer base has
widened into many industries.
FINANCIAL INFORMATION
The
capital was registered
at Bht. 1,000,000 divided into 1,000 shares of
Bht. 1,000 each with
fully paid.
The
capital was increased
later as follows:
Bht. 11,000,000
on April 30,
1992
Bht. 25,000,000
on July 19,
2010
Bht. 35,000,000
on August 16,
2011
The
latest registered capital
was increased to
Bht. 35,000,000 divided
into 35,000 shares
of Bht. 1,000 each
with fully paid.
THE
SHAREHOLDERS LISTED WERE
: [as at
April 30, 2014]
|
NAME |
HOLDING |
% |
|
|
|
|
|
Mr. Ahmed Iqbal Habeeb
Ahmed Sulaiman Nationality: Indian Address : 4/3
Charoenkrung Road, Suriyawongse,
Bangrak, Bangkok |
17,000 |
48.57 |
|
Mrs. Irada Hanafee Nationality: Thai Address : 20/206
Moo 6, T. Bansuan,
A. Muang, Chonburi |
5,400 |
15.43 |
|
Mr. Samarn Manotiang Nationality: Thai Address : 36
Bangyeerua, Thonburi, Bangkok |
5,400 |
15.43 |
|
Ms. Ratchanee Musha Nationality: Thai Address : 448/15
Surawong Road, Siphaya, Bangrak, Bangkok |
5,400 |
15.43 |
|
Mr. Poomsak Hanafee Nationality: Thai Address : 57
Bangyeerua, Thonburi, Bangkok |
1,800 |
5.14 |
Total Shareholders : 5
Share Structure [as
at April 30,
2014]
|
Nationality |
Shareholders |
No. of Share |
% Shares |
|
|
|
|
|
|
Thai |
4 |
18,000 |
51.43 |
|
Foreign - Indian |
1 |
17,000 |
48.57 |
|
Total |
5 |
35,000 |
100.00 |
NAME OF AUDITOR
& CERTIFIED PUBLIC
ACCOUNTANT NO. :
Ms. Usuma Chantalert No.
8525
BALANCE SHEET [BAHT]
The latest financial figures published for December 31, 2013, 2012 & 2011 were:
ASSETS
|
Current Assets |
2013 |
2012 |
2011 |
|
|
|
|
|
|
Cash and Cash Equivalent |
12,854,928.13 |
3,787,285.45 |
185,711.17 |
|
Trade Accounts & Other
Receivable |
|
|
|
|
Trade Accounts
Receivable |
75,225,972.65 |
57,275,700.77 |
12,714,002.06 |
|
Deferred Interest |
- |
469.39 |
- |
|
Prepaid Legal
Fee |
706,849.32 |
- |
- |
|
Inventories |
37,308,462.22 |
32,576,963.36 |
37,186,781.96 |
|
Loan to Related Person |
65,843,993.98 |
6,853,135.52 |
- |
|
Short-term Loan |
26,176,107.00 |
- |
- |
|
Fixed Deposit |
15,058,000.00 |
- |
- |
|
Advance Payment for
Goods |
8,452,148.15 |
18,258,119.74 |
- |
|
Other Current Assets |
81,735,092.76 |
31,223,866.12 |
6,468,868.79 |
|
|
|
|
|
|
Total Current Assets
|
323,364,554.21 |
149,975,540.38 |
56,555,363.98 |
|
|
|
|
|
|
Fixed Assets |
55,352,277.33 |
55,911,636.25 |
54,748,347.52 |
|
Other Non-current Assets |
- |
271,870.00 |
- |
|
Total Assets |
378,716,831.54 |
206,159,046.60 |
111,303,711.50 |
LIABILITIES &
SHAREHOLDERS’ EQUITY [BAHT]
|
Current Liabilities |
2013 |
2012 |
2011 |
|
|
|
|
|
|
Bank Overdraft & Short-term
Loam from Financial
Institutions |
292,379,591.59 |
9,528,667.05 |
2,872,706.95 |
|
Trade Account & Other Payable |
|
|
|
|
Trade Accounts
Payable |
- |
60,315,542.91 |
27,133,235.42 |
|
Other Payable |
170,000.00 |
1,555,476.14 |
- |
|
Letter of Credit- Accounts Payable |
- |
- |
19,748,893.25 |
|
Accrued Income Tax |
8,874.72 |
579,915.70 |
538,306.38 |
|
Accrued Expenses |
- |
- |
722,643.04 |
|
Advances for Inventories |
- |
11,031,012.85 |
2,744,952.71 |
|
Other Current Liabilities |
2,727.27 |
29,861.64 |
- |
|
|
|
|
|
|
Total Current Liabilities |
292,561,193.58 |
83,040,476.29 |
53,760,737.75 |
|
Long-term Loan from
Financial Institutions |
21,723,969.83 |
24,966,852.09 |
27,000,000.00 |
|
Long-term Loan from Related Company |
31,984,750.00 |
62,976,116.04 |
- |
|
Total Liabilities |
346,269,913.41 |
170,983,444.42 |
80,760,737.75 |
|
|
|
|
|
|
Shareholders’ Equity |
|
|
|
|
|
|
|
|
|
Share capital : Baht 1,000
par value authorized, issued
and fully paid share
capital 35,000 shares |
35,000,000.00 |
35,000,000.00 |
35,000,000.00 |
|
|
|
|
|
|
Capital Paid |
35,000,000.00 |
35,000,000.00 |
35,000,000.00 |
|
Retained Earning-
Unappropriated |
[2,553,081.87] |
175,602.18 |
[4,457,026.25] |
|
Total Shareholders' Equity |
32,446,918.13 |
35,175,602.18 |
30,542,973.75 |
|
Total Liabilities &
Shareholders' Equity |
378,716,831.54 |
206,159,046.60 |
111,303,711.50 |
PROFIT &
LOSS ACCOUNT
|
Revenue |
2013 |
2012 |
2011 |
|
|
|
|
|
|
Sales Income |
850,738,811.98 |
968,945,044.33 |
205,101,705.51 |
|
Other Income |
77,967.12 |
2,399,624.64 |
450,041.37 |
|
Total Revenues |
850,816,779.10 |
971,344,668.97 |
205,551,746.88 |
|
Expenses |
|
|
|
|
|
|
|
|
|
Cost of Goods
Sold |
803,338,571.22 |
941,797,393.35 |
194,736,557.35 |
|
Selling Expenses |
10,929,447.96 |
10,443,006.86 |
4,700,830.73 |
|
Administrative Expenses |
26,467,698.33 |
9,168,967.68 |
4,268,670.41 |
|
Total Expenses |
840,735,717.51 |
961,409,367.89 |
203,706,058.49 |
|
|
|
|
|
|
Profit before Financial Cost & Income Tax |
10,081,061.59 |
9,935,301.08 |
1,845,688.39 |
|
Financial Cost |
[12,366,870.92] |
[3,917,756.95] |
[1,019,408.75] |
|
Profit before Income Tax |
[2,285,809.33] |
6,017,544.13 |
826,279.64 |
|
Income Tax |
[442,874.72] |
[1,384,915.70] |
[621,556.38] |
|
|
|
|
|
|
Net Profit / [Loss] |
[2,728,684.05] |
4,632,628.43 |
204,723.26 |
fINANCIAL ANALYSIS
|
ITEM |
UNIT |
2013 |
2012 |
2011 |
|
|
|
|
|
|
|
LIQUIDITY RATIO |
|
|
|
|
|
CURRENT RATIO |
TIMES |
1.11 |
1.81 |
1.05 |
|
QUICK RATIO |
TIMES |
0.30 |
0.74 |
0.24 |
|
|
|
|
|
|
|
ACTIVITY RATIO |
|
|
|
|
|
FIXED ASSETS TURNOVER |
TIMES |
15.37 |
17.33 |
3.75 |
|
TOTAL ASSETS TURNOVER |
TIMES |
2.25 |
4.70 |
1.84 |
|
INVENTORY CONVERSION PERIOD |
DAYS |
16.95 |
12.63 |
69.70 |
|
INVENTORY TURNOVER |
TIMES |
21.53 |
28.91 |
5.24 |
|
RECEIVABLES CONVERSION PERIOD |
DAYS |
32.27 |
21.58 |
22.63 |
|
RECEIVABLES TURNOVER |
TIMES |
11.31 |
16.92 |
16.13 |
|
PAYABLES CONVERSION PERIOD |
DAYS |
- |
23.38 |
50.86 |
|
CASH CONVERSION CYCLE |
DAYS |
49.23 |
10.83 |
41.47 |
|
|
|
|
|
|
|
PROFITABILITY
RATIO |
|
|
|
|
|
COST OF GOODS SOLD |
% |
94.43 |
97.20 |
94.95 |
|
SELLING & ADMINISTRATION |
% |
4.40 |
2.02 |
4.37 |
|
INTEREST |
% |
1.45 |
0.40 |
0.50 |
|
GROSS PROFIT MARGIN |
% |
5.58 |
3.05 |
5.27 |
|
NET PROFIT MARGIN BEFORE EX. ITEM |
% |
1.18 |
1.03 |
0.90 |
|
NET PROFIT MARGIN |
% |
(0.32) |
0.48 |
0.10 |
|
RETURN ON EQUITY |
% |
(8.41) |
13.17 |
0.67 |
|
RETURN ON ASSET |
% |
(0.72) |
2.25 |
0.18 |
|
EARNING PER SHARE |
BAHT |
(77.96) |
132.36 |
5.85 |
|
|
|
|
|
|
|
LEVERAGE RATIO |
|
|
|
|
|
DEBT RATIO |
TIMES |
0.91 |
0.83 |
0.73 |
|
DEBT TO EQUITY RATIO |
TIMES |
10.67 |
4.86 |
2.64 |
|
TIME INTEREST EARNED |
TIMES |
0.82 |
2.54 |
1.81 |
|
|
|
|
|
|
|
ANNUAL GROWTH |
|
|
|
|
|
SALES GROWTH |
% |
(12.20) |
372.42 |
|
|
OPERATING PROFIT |
% |
1.47 |
438.30 |
|
|
NET PROFIT |
% |
(158.90) |
2,162.87 |
|
|
FIXED ASSETS |
% |
(1.00) |
2.12 |
|
|
TOTAL ASSETS |
% |
83.70 |
85.22 |
|
ANNUAL GROWTH :
ACCEPTABLE
An annual sales growth is -12.2%. Turnover has decreased from THB
968,945,044.33 in 2012 to THB 850,738,811.98 in 2013. While net profit has decreased
from THB 4,632,628.43 in 2012 to THB -2,728,684.05 in 2013. And total assets
has increased from THB 206,159,046.60 in 2012 to THB 378,716,831.54 in 2013.
PROFITABILITY :
RISKY
PROFITABILITY
RATIO
|
Gross Profit Margin |
5.58 |
Deteriorated |
Industrial Average |
24.51 |
|
Net Profit Margin |
(0.32) |
Deteriorated |
Industrial Average |
1.50 |
|
Return on Assets |
(0.72) |
Deteriorated |
Industrial Average |
4.03 |
|
Return on Equity |
(8.41) |
Deteriorated |
Industrial Average |
14.24 |
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 5.58%. When compared with
the industry average, the ratio of the company was lower. This indicated that
company may have 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 -0.32%.
When compared with the industry average, the ratio of the company was lower.
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. When compared with the
industry average, it was lower, the
company's figure is -0.72%.
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. When compared with the
industry average, it was lower, the company's figure is -8.41%.
Trend of the
average competitors in the same industry for last 5 years
Return on Assets Uptrend
Return on Equity Uptrend
LIQUIDITY :
ACCEPTABLE
LIQUIDITY RATIO
|
Current Ratio |
1.11 |
Satisfactory |
Industrial Average |
1.24 |
|
Quick Ratio |
0.30 |
|
|
|
|
Cash Conversion Cycle |
49.23 |
|
|
|
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 1.11 times in 2013, decreased from 1.81 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 0.3 times in 2013,
decreased from 0.74 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 50 days.
Trend of the
average competitors in the same industry for last 5 years
Current Ratio Uptrend
LEVERAGE : RISKY
LEVERAGE RATIO
|
Debt Ratio |
0.91 |
Acceptable |
Industrial Average |
0.71 |
|
Debt to Equity Ratio |
10.67 |
Risky |
Industrial Average |
2.41 |
|
Times Interest Earned |
0.82 |
Risky |
Industrial Average |
(0.62) |
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 higher the percentage means that the company is using less equity
and has stronger leverage position.
Times Interest Earned measuring a company's ability to meet its debt
obligations. Ratio is 0.82 lower than 1, so the company is not generating
enough cash from EBIT to meet its
interest obligations.
Debt Ratio shows the proportion of a company's assets which are financed
through debt. The company's figure is 0.91 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 Downtrend
Times Interest Earned Downtrend
ACTIVITY :
IMPRESSIVE
ACTIVITY RATIO
|
Fixed Assets Turnover |
15.37 |
Impressive |
Industrial Average |
(5.66) |
|
Total Assets Turnover |
2.25 |
Satisfactory |
Industrial Average |
2.44 |
|
Inventory Conversion Period |
16.95 |
|
|
|
|
Inventory Turnover |
21.53 |
Impressive |
Industrial Average |
6.97 |
|
Receivables Conversion Period |
32.27 |
|
|
|
|
Receivables Turnover |
11.31 |
Impressive |
Industrial Average |
2.58 |
|
Payables Conversion Period |
- |
|
|
|
The company's Account Receivable Ratio is calculated as 11.31 and 16.92
in 2013 and 2012 respectively. This ratio measures the efficiency of the
company in managing its trade debtors to generate revenue. A lower ratio may
indicate over extension and collection problems. Conversely, a higher ratio may
indicate an overtly stringent policy. In this case, the company's A/R ratio in
2013 decreased from 2012. This would suggest the company had deteriorated in
the management of its debt collections.
Inventory Turnover in Days Ratio indicates the liquidity of inventory.
It estimates the number of days that it will take to sell the current
inventory. Inventory is particularly sensitive to change in business
activities. The inventory turnover in days has increased from 13 days at the
end of 2012 to 17 days at the end of 2013. This represents a negative trend.
And Inventory turnover has decreased from 28.91 times in year 2012 to 21.53
times in year 2013.
The company's Total Asset Turnover is calculated as 2.25 times and 4.7
times in 2013 and 2012 respectively. This ratio is determined by dividing total
assets into total sales turnover. The ratio measures the activity of the assets
and the ability of the firm to generate sales through the use of the assets.
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.
-
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.60.10 |
|
UK Pound |
1 |
Rs.102.04 |
|
Euro |
1 |
Rs.80.74 |
INFORMATION DETAILS
|
Analysis Done by
: |
KAR |
|
|
|
|
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.