MIRA INFORM REPORT

 

 

Report Date :

05.05.2014              

 

IDENTIFICATION DETAILS

 

Name :

OKAVANGO DIAMOND COMPANY (PTY) LTD

 

 

Registered Office :

Plot 67782 Block 8 Diamond Technology Park Industrial GABARONE

 

 

Country :

Botswana

 

 

Date of Incorporation :

18.04.2013

 

 

Com. Reg. No.:

CO2013/4158

 

 

Legal Form :

Private Company

 

 

Line of Business :

Subject is engaged in Rough diamond distribution

 

 

No. of Employees

22

 

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 31, 2014

 

Country Name

Previous Rating

(31.12.2013)

Current Rating

(31.03.2014)

South Africa.

A2

A2

 

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

 

 

SOUTH AFRICA.ECONOMIC OVERVIEW

 

South Africa is a middle-income, emerging market with an abundant supply of natural resources; well-developed financial, legal, communications, energy, and transport sectors and a stock exchange that is the 16th largest in the world. Even though the country's modern infrastructure supports a relatively efficient distribution of goods to major urban centers throughout the region, unstable electricity supplies retard growth. The global financial crisis reduced commodity prices and world demand. GDP fell nearly 2% in 2009 but has recovered since then, albeit slowly with 2014 growth projected at about 2%. Unemployment, poverty, and inequality - among the highest in the world - remain a challenge. Official unemployment is at nearly 25% of the work force, and runs significantly higher among black youth. Eskom, the state-run power company, has built two new power stations and installed new power demand management programs to improve power grid reliability. Construction delays at two additional plants, however, mean South Africa is operating on a razor thin margin; economists judge that growth cannot exceed 3% until those plants come on line. South Africa's economic policy has focused on controlling inflation, however, the country has had significant budget deficits that restrict its ability to deal with pressing economic problems. The current government faces growing pressure from special interest groups to use state-owned enterprises to deliver basic services to low-income areas and to increase job growth

 

Source : CIA

 

 

 

Company name

 

OKAVANGO DIAMOND COMPANY (PTY) LTD

 

 

PHYSICAL ADDRESS

 

Plot 67782

Block 8

Diamond Technology Park

Industrial

GABARONE

Botswana

 

 

POSTAL ADDRESS   

 

P O Box 2258 ABG

SEBELE

Gabarone

Botswana

 

 

TELEPHONE NUMBER   

 

00 267 399 2300

 

 

FAX NUMBER

 

00 267 390 7711

 

 

SHAREHOLDERS

 

100%    GOVERNMENT OF BOTSWANA

 

 

ASSOCIATE COMPANIES

 

None

 

DIRECTORS

 

J THAMAGE

B MOLOSIWA

C DE KOP

B MOESI

T FREARS

 

 

BANKERS

 

STANDARD CHARTERED BANK, Main Branch, Account Number: 8740073289600.  The subject does not require an overdraft facility as credit balances are maintained at the bank.

 

 

DATE REGISTERED

 

18 April 2013

Registration Certificate Number:  CO2013/4158

 

 

 

VAT NUMBER    

 

C28676501113

 

 

TAX NUMBER    

 

C28676

 

 

MAJOR OPERATION

 

Rough diamond distribution

 

 

MAJOR SUPPLIERS

 

The subject deals with:

DIAMOND TRADING CO BOTSWANA

DIAMOND TECHNOLOGY PARK

MALCA AMIT

TRAVEL WISE

GRAND PALM

 

 

MAJOR CUSTOMERS OR BUSINESS SECTORS

 

Diamond Industry

 

 

AREA OF DISTRIBUTION AND SELLING   

 

Botswana

 

 

EXPORTS

 

India, Belgium, Israel, South Africa, United Arab Emirates, Hong Kong and the USA

 

 

TOTAL EMPLOYEES

 

22

 

 

OTHER PREMISES   

 

None

 

 

OWNED OR LEASED

 

The premises are reported to be leased

 

AUTHORISED SHARE CAPITAL

 

BWP100 divided into 100 ordinary shares of BWP1 each

 

 

ISSUED SHARE CAPITAl    

 

BWP100

 

 

FINANCIALS

 

The following estimated financial situation was submitted as at 23 April 2014:

 

STOCK BWP                 400 000 000

CASH   BWP                 390 000 000

FIXED ASSETS            BWP     14 600 000

TURNOVER per annum BWP1 000 000 000

 

 

AUDITORS:      KPMG

 

FINANCIAL YEAR END:            MARCH

 

INSURANCE BROKERS:           AON INSURANCE BROKERS

 

 

CURRENT TRADE REFERENCES

 

            ACCOUNT        HIGHEST          AVERAGE        TERMS             PAYMENT   EXPERIENCE

            OPENED          CREDIT            CREDIT                                    PATTERN

 

1.         +1 years           Open                R 200 000         30 days                        30 days                        Very Good                   

2.         June 2013         Open                R   70 000         60 days                        30 days                        Excellent

 

3.         May 2013          R  30 000          R   25 000         30 days                        30 days                        Excellent

 

 

NATURE OF GOODS OR SERVICES SUPPLIED

 

(These descriptions relate respectively by number to the above current trade transactions):

 

1.         Rental  

                       

2.         Courier 

 

3.         Accommodation

 

 

COMMENTS

 

This is a new business which is owned by the Botswana Government.  The subject is meeting its commitments timeously. 

 

 

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.60.23

UK Pound

1

Rs.101.68

Euro

1

Rs.83.46

 

INFORMATION DETAILS

 

Analysis Done by :

DIV

 

 

Report Prepared by :

NIS

 

               

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.