MIRA INFORM REPORT

 

 

Report Date :

23.09.2014

 

IDENTIFICATION DETAILS

 

Name :

PRITI GEMS CO LTD

 

 

Registered Office :

Satoh Bldg 405, 3-43-10 Taito Taitoku Tokyo 110-0016

 

 

Country :

Japan

 

 

Financials (as on) :

31.12.2013

 

 

Date of Incorporation :

April 1998

 

 

Com. Reg. No.:

(Tokyo-Taitoku) 016010

 

 

Legal Form :

Private Limited Company

 

 

Line of Business :

Import, wholesale of polished diamonds

 

 

No. of Employees :

7

 

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 :

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 and address

 

PRITI GEMS CO LTD

REGD NAME:    YK Priti Gems

MAIN OFFICE:  Satoh Bldg 405, 3-43-10 Taito Taitoku Tokyo 110-0016 JAPAN

Tel: 03-5812-7977     Fax: 03-5812-7976

 

URL:                 N/A

 

 

ACTIVITIES

 

Import, wholesale of polished diamonds

 

 

BRANCHES   

 

Kofu

 

 

FACTORIES

 

(subcontracted)

 

 

OFFICERS

 

NAYAN SHAH, PRES (Indian resident)

Noboru Koyama, dir

 

Yen Amount:     In million Yen, unless otherwise stated

 

 

SUMMARY    

 

FINANCES        FAIR                 A/SALES          Yen 1,614 M

PAYMENTS      No complaints   CAPITAL           Yen 10 M

TREND UP                    WORTH            Yen 97 M

STARTED         1998                 EMPLOYES      7

 

 

COMMENT    

 

IMPORTER AND WHOLESALER SPECIALIZING IN POLISHED DIAMONDS.  FINANCIAL SITUATION CONSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

                       

                       

HIGHLIGHTS

           

The subject company was established by Nayan Shah, an Indian businessman, in order to make most of his over 10 years’ experience in the subject line of business.  A resident of Japan for nearly 20 years, speaking fluent Japanese, he had cultivated a wide business network in Japan, which prompted him to start his own company jointly with Noboru Koyama, says Nayan Shah.  This is a trading firm specializing in import and wholesale of polished and pre-cut diamonds.  80% of the products are imported from India, other from Hong Kong, Thailand, Israel, Belgium, etc.  Has a branch office in Kofu City, Yamanashi-Pref, hub of Jewelry mfrs, processors and wholesalers.  Goods are shipped to jewelers, chain stores centering in greater-Tokyo region.  The stones are partially subcontracted mfg to domestic jewelry makers into jewelry products. 

 

 

FINANCIAL INFORMATION

 

Financials are only partially disclosed.

           

The sales volume for Dec/2013 fiscal term amounted to Yen 1,614 million, a 6% up from Yen 1,522 million in the previous term.  This is attributed to the price hike of diamonds, says N Shah.  The net profit was posted at Yen 32 million, compared with Yen 15 million net profit a year ago. 

 

For the current term ending Dec 2014 the net profit is projected at Yen 35 million, on a 4% rise in turnover, to Yen 1,680 million.  

 

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

 

 

REGISTRATION

           

Date Registered:       Apr 1998

Regd No.:                   (Tokyo-Taitoku) 016010

Legal Status:      Private Limited Company (Yugen Kaisha)

Regd Capital:      Yen 10 million

      Major shareholders (%): Noboru Koyama (50), Nayan Shah (45)

No. of shareholders: 3

 

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

 

OPERATION

           

Activities: Imports and wholesales polished diamonds (eight-cut diamonds, fancy sized diamonds, small brilliants, polished, medium-sized diamonds, large-sized diamonds), other gem stones (--100%).

 

Goods are imported from India (80%) centrally, other from Israel (10%), Hong Kong, Belgium, Thailand, other.

Diamonds are partially subcontracted mfg to local jewelry processors into products & accessories.

           

Clients: [Jewelry stores, jewelry processors, chain stores] K2 Diamond, Komiya, Kuwari Hoshoku, Oriental Diamond, Four Stars, GN Co, Kashikey, other. 

Also exports to Singapore, Hong Kong, Thailand, etc.

No. of accounts: 400

Domestic areas of activities: Centered in greater-Tokyo

Suppliers: [Mfrs, wholesalers] Imports from India (80%), other from Israel (10%),

Belgium, Hong Kong, Thailand, USA, etc. 

Jewelry products are supplied from domestic subcontracted jewelry processors.

 

Payment record: no complaints

 

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

 

Bank References:

Asahi Shinkin Bank (H/O)

SMBC (Ueno)

Relations: Satisfactory

 

 

FINANCES

 

(In Million Yen)

Terms Ending:

　

31/12/2014

31/12/2013

31/12/2012

31/12/2011

Annual Sales

　

1,680

1,614

1,522

1,400

Recur. Profit

　

..

..

..

..

Net Profit

　

35

32

15

15

Total Assets

　

　

N/A

N/A

N/A

Net Worth

　

　

97

75

65

Capital, Paid-Up

　

　

10

10

10

Div.P.Share(¥)

　

　

0.00

0.00

0.00

<Analytical Data>

　

(%)

(%)

(%)

(%)

    S.Growth Rate

　

4.09

6.04

8.71

10.24

    Current Ratio

　

　

..

..

..

    N.Worth Ratio

　

　

..

..

..

    N.Profit/Sales

　

2.08

1.98

0.99

1.07

 

Notes: Financials are only partially disclosed.

Forecast (or estimated) figures for 31/12/2014 fiscal term.

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.60.78

UK Pound

1

Rs.99.29

Euro

1

Rs.78.16

 

INFORMATION DETAILS

 

Analysis Done by :

RAS

 

 

Report Prepared by :

PDT

 

               

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.