MIRA INFORM REPORT

 

 

Report Date :

23.09.2014

 

IDENTIFICATION DETAILS

 

Name :

TOKYO KIHO CO LTD

 

 

Registered Office :

Aurum Bldg 4F, 1-26-2 Higashiueno Taitoku Tokyo 110-0015

 

 

Country :

Japan

 

 

Financials (as on) :

31.03.2014

 

 

Date of Incorporation :

January 1960

 

 

Com. Reg. No.:

0105-01-009209

 

 

Legal Form :

Limited Company

 

 

Line of Business :

Wholesales jewelry & precious metals; diamonds, pearls, sapphire, ruby, emerald, fingerings, necklaces, bracelets, pierced earrings, other jewelry accessories.

 

 

No of Employees :

89

 

 

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 1, 2014

 

Country Name

Previous Rating

(31.03.2014)

Current Rating

(01.06.2014)

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 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. Prime Minister Shinzo ABE has declared the economy his government's top priority; he has overturned his predecessor's plan to permanently close nuclear power plants and is pursuing an economic revitalization agenda of fiscal stimulus, monetary easing, and structural reform. Japan joined the Trans Pacific Partnership negotiations in 2013, a pact that would open Japan's economy to increased foreign competition and create new export opportunities for Japanese businesses. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, Japan in 2013 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 is exceeding 230% of GDP. To help raise government revenue and reduce public debt, Japan decided in 2013 to gradually increase the consumption tax to a total of 10% by the year 2015. Japan is making progress on ending deflation due to a weaker yen and higher energy costs, but reliance on exports to drive growth and an aging, shrinking population pose other major long-term challenges for the economy.

 

Source : CIA

 

 

 

 

Company Name & Address

 

TOKYO KIHO CO LTD

 

 

REGD NAME

 

Tokyo Kiho KK

 

 

MAIN OFFICE

 

Aurum Bldg 4F, 1-26-2 Higashiueno Taitoku Tokyo 110-0015 JAPAN

Tel: 03-3834-6261    

Fax: 03-3831-2987

 

URL:                 http://www.tokyokiho.com/

E-Mail address: info@tokyokiho.com

 

ACTIVITIES:     Import, wholesale of jewelry, precious metals

BRANCHES:     Osaka

OVERSEAS:     Hong Kong

 

CHIEF EXEC:    CHIAKI NAKAGAWA, PRES & CEO

 

Yen Amount:     In million Yen, unless otherwise stated

 

SUMMARY

 

FINANCES        FAIR                             A/SALES          Yen 6,652 M

PAYMENTS      NO COMPLAINTS          CAPITAL           Yen 636 M

TREND STEADY                       WORTH            Yen 3,188 M

STARTED         1960                             EMPLOYES      89

 

COMMENT:       WHOLESALER SPECIALIZING IN JEWELRY FINANCIAL SITUATION CONSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

                       

 

 

 

 

 

 

                       

Unit: In Million Yen

Forecast (or estimated) figures for 31/03/2015 fiscal term

 

HIGHLIGHTS

           

The subject company was established by Kisaburo Masaki as a wholesaler of jewelry and accessories, owned & managed by the Masaki family, and succeeded by the present executives.  This is a comprehensive wholesaler of jewelry and precious stones & metals.  Strong in dealing a full range of items including ingots, diamonds and colored stones.  Particularly strong in diamond jewelry.  Known for original brand and sales at exhibition.  Goods are also imported from Europe, USA, S/E Asian countries.  Goods are retailed through a subsidiary jewelry store, JMC KK, too.    Holds large-scale sales promotion campaigns regularly nationwide.

 

 

FINANCIAL INFORMATION

           

The sales volume for Mar/2014 fiscal term amounted to Yen 6,652 million, an 8.9% up from Yen 6,111 million in the previous term.  Jewelry prices rose.  The recurring profit was posted at Yen 115 million and the net profit at Yen 86 million, respectively, compared with Yen 133 million recurring profit and Yen 114 million net profit, respectively, a year ago.

 

(Apr/Jun/2014 results): Sales Yen 1,208 million (down 7.5%), operating profit Yen 42 million (up 79.7%), recurring profit Yen 40 million (up 78.2%), net profit Yen 49 million (up 82.0%).   (% compared with the corresponding period a year ago).

           

For the current term ending Mar 2015 the recurring profit is projected at Yen 153 million and the net profit at Yen 134 million, respectively, on a 1.0% rise in turnover, to Yen 6,721 million.

           

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

 

 

REGISTRATION

 

Date Registered:      Jan 1960

Regd No.:                        0105-01-009209 (Tokyo-Chuoku)

Legal Status:      Limited Company (Kabushiki Kaisha)

Authorized:         13,110,000 shares

Issued:                4,478,560 shares

Sum:                   Yen 636 million

           

Major shareholders (%): Seiwa Shoji (4.4), Chiaki Nakagawa (3.8), Sagami Co (3.4), Yoshihito Masaki (3.3), Furuya Co (3.2), Fujie Masaki (3.1), Urakei Pearl (2.9), Employees’ S/Holding Assn (2.8), Kuwayama Corp (2.7)

           

No. of shareholders: 207

 

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

 

Managements: Chiaki Nakagawa, pres; Yoshio Somemi, dir; Hideki Ishizuka, dir; Midori Masaki, dir; Mitsuya Takahata, dir; Yuji Higasa, dir

 

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

 

Related companies: Tokyo Kiho Overseas (Hong Kong) Co.

 

 

OPERATION

           

Activities: Wholesales jewelry & precious metals; diamonds, pearls, sapphire, ruby,  emerald, fingerings, necklaces, bracelets, pierced earrings, other jewelry accessories.

           

(Sales breakdown by items): designer brands jewelry (24%); Diamonds (39%), fashion jewelry & accessories (10%); colored stone jewelry (12%); pearls (9%), others (6%)

 

Designer brands: Sayoko, Lucciola, Asplandi, Kohoryu, other (--all Japanese designers).

 

Clients: [Jewelry stores, department stores, chain stores, mail order houses] Sagami Co, Mitsukoshi, Gem Select, Brother Sales, Makino Tokeiten, JMC (subsidiary), Nissen (mail order house), Tokyo Masuiwaya, other.

No. of accounts: 1,000

Domestic areas of activities: Nationwide

Suppliers: [Mfrs, jewelry processors, wholesalers] Kinki Hoshoku, Urakei Pearl, Mizuno                 Handy Harman, Meijido, NNK, Kondo Jewelry, Taiho Kikinzoku, Jewelry Ozawa, other.

 

Payment record: No Complaints

 

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

 

Bank References:

SMBC (Ueno)

MUFG (Ueno)

Relations: Satisfactory

 

 

FINANCES

 

 (In Million Yen)

FINANCES: (Consolidated in million yen)

　

　

　

Terms Ending:

31/03/2014

31/03/2013

INCOME STATEMENT

 

　

　

  Annual Sales

　

6,652

6,111

　

  Cost of Sales

5,086

4,627

　

      GROSS PROFIT

1,566

1,484

　

  Selling & Adm Costs

1,463

1,374

　

      OPERATING PROFIT

102

110

　

  Non-Operating P/L

13

23

　

      RECURRING PROFIT

115

133

　

      NET PROFIT

86

114

BALANCE SHEET

 

 

　

　

  Cash

　

968

952

　

  Receivables

 

2,099

1,745

　

  Inventory

 

2,677

2,808

　

  Securities, Marketable

　

　

　

  Other Current Assets

(54)

12

　

      TOTAL CURRENT ASSETS

5,690

5,517

　

  Property & Equipment

406

388

　

  Intangibles

 

1

1

　

  Investments, Other Fixed Assets

1,732

1,762

　

      TOTAL ASSETS

7,829

7,668

　

  Payables

 

519

410

　

  Short-Term Bank Loans

2,355

2,325

　

　

 

　

　

　

  Other Current Liabs

503

513

　

      TOTAL CURRENT LIABS

3,377

3,248

　

  Debentures

 

130

110

　

  Long-Term Bank Loans

930

994

　

  Reserve for Retirement Allw

55

58

　

  Other Debts

　

148

145

　

      TOTAL LIABILITIES

4,640

4,555

　

      MINORITY INTERESTS

 

　

　

Common stock

636

636

　

Additional paid-in capital

504

504

　

Retained earnings

2,039

1,979

　

Evaluation p/l on investments/securities

27

28

　

Others

 

9

(7)

　

Treasury stock, at cost

(27)

(27)

　

      TOTAL S/HOLDERS` EQUITY

3,188

3,113

　

      TOTAL EQUITIES

7,829

7,668

CONSOLIDATED CASH FLOWS

 

　

　

 

Terms ending:

31/03/2014

31/03/2013

　

Cash Flows from Operating Activities

　

70

105

　

Cash Flows from Investment Activities

-21

-29

　

Cash Flows from Financing Activities

-89

-174

　

Cash, Bank Deposits at the Term End

　

874

858

ANALYTICAL RATIOS            Terms ending:

31/03/2014

31/03/2013

　

 

Net Worth (S/Holders' Equity)

3,188

3,113

　

 

Current Ratio (%)

168.49

169.86

　

 

Net Worth Ratio (%)

40.72

40.60

　

 

Recurring Profit Ratio (%)

1.73

2.18

　

 

Net Profit Ratio (%)

1.29

1.87

　

　

Return On Equity (%)

2.70

3.66

 

 

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.60.79

UK Pound

1

Rs.99.30

Euro

1

Rs.78.16

 

 

INFORMATION DETAILS

 

Analysis Done by :

SUM

 

 

Report Prepared by :

TPT

 

 

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%)

 

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