MIRA INFORM REPORT

 

 

Report No. :

337748

Report Date :

19.08.2015

 

IDENTIFICATION DETAILS

 

Name :

TSUTSUMI JEWELRY CO LTD

 

 

Registered Office :

4-24-26 Chuo Warabi City Saitama-Pref 335-0004

 

 

Country :

Japan

 

 

Financials (as on) :

31.03.2015

 

 

Date of Incorporation :

June 1973

 

 

Com. Reg. No.:

0300-01-021115

 

 

Legal Form :

Limited Company

 

 

Line of Business :

Retails & wholesales of jewelry, operating a total 187 jewelry chain stores centrally in greater-Tokyo regions:

 

 

No. of Employees :

1,259

 

 

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, 2015

 

Country Name

Previous Rating

(31.12.2014)

Current Rating

(31.03.2015)

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 an 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. Scarce in many natural resources, Japan has long been dependent on imported raw materials. Since the complete shutdown of Japan’s nuclear reactors after the earthquake and tsunami disaster in 2011, Japan's industrial sector has become even more dependent than it was previously on imported fossil 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 impressive - 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 aftereffects 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 four times since 2008. 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 of that year disrupted manufacturing. The economy has largely recovered in the four years since the disaster, although reconstruction in the affected Tohoku region has lagged, in part due to a shortage of labor in the construction sector. Japan enjoyed a sharp uptick in growth in 2013 on the basis of Prime Minister Shinzo Abe’s “Three Arrows” economic revitalization agenda - dubbed “Abenomics” - of monetary easing, “flexible” fiscal policy, and structural reform. Abe’s government has replaced the preceding administration’s plan to phase out nuclear power with a new policy of seeking to restart nuclear power plants that meet strict new safety standards, and emphasizing nuclear energy’s importance as a base-load electricity source. Japan joined the Trans-Pacific Partnership (TPP) 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 2014 stood as the fourth-largest economy in the world after first-place China, which surpassed Japan in 2001, and third-place India, which edged out Japan in 2012. While seeking to stimulate and reform the economy, the government must also devise a strategy for reining in Japan's huge government debt, which amounts to more than 230% of GDP. To help raise government revenue, Japan adopted legislation in 2012 to gradually raise the consumption tax rate to 10% by 2015, beginning with a hike from 5% to 8% implemented in April 2014. That increase had a contractionary effect on GDP, however, so PM Abe in late 2014 decided to postpone the final phase of the increase until April 2017 to give the economy more time to recover. Led by the Bank of Japan’s aggressive monetary easing, Japan is making progress in ending deflation, but demographics - low birthrate and an aging, shrinking population - pose major long-term challenges for the economy.

 

Source : CIA

 

Company Name

 

TSUTSUMI JEWELRY CO LTD

 

REGD NAME:               KK Tsutsumi

 

MAIN OFFICE:              4-24-26 Chuo Warabi City Saitama-Pref 335-0004 JAPAN

                                                Tel: 048-431-5111     Fax: 048-431-5524

 

URL:                             http://www.tsutsumi.co.jp/

E-Mail address:                        info@tsutsumi.co.jp

 

 

ACTIVITIES

 

Mfg, retail, wholesale of jewelry

 

 

STORE(S)

 

187 (Tokyo Area-own managed stores)

 

 

FACTORIES

 

At the caption address (2), Gunma

 

 

CHIEF EXEC

 

SATOSHI TAGAI, PRES

 

Yen Amount:     In million Yen, unless otherwise stated

 

 

SUMMARY

 

FINANCES        FAIR                             A/SALES          Yen 22,148 M

PAYMENTSNO COMPLAINTS    CAPITAL           Yen 13,098 M

TREND SLOW                           WORTH            Yen 79,263 M

STARTED         1973                             EMPLOYES      1,259

 

 

COMMENT

 

MFR, RETAILER & WHOLESALER SPECIALIZING IN JEWELRY. 

 

FINANCIAL SITUATION CONSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

 

 

Unit: in Million Yen

Forecast (or estimated) figures for 31/03/2016 fiscal term

 

 

HIGHLIGHTS

 

The subject company was established by Seiji Tsutsumi originally as Tsutsumi Precious Metals & Crafts Co Ltd, and renamed as captioned in 1988.  This is an integrated jewelry company with a fully combined production & distribution system: from gem purchasing to jewelry mfg, retailing & wholesaling.  A major retailer of jewelry & precious metals, operating a total 182 outlets, more than 100 directly-run stores centrally in the greater-Tokyo region.  With start-up of product management center in Mar 1997, escalating new products development efforts and reducing inventory risks.  Known for quick response to market needs and immediately reflects them in designs & processing.  95% of the products are retailed at its own stores, with 5% wholesaled to department stores, chain stores, jewelry stores, other.  Integrating wallpaper production firms under 2 firms aimed at efficient structure. 

           

 

FINANCIAL INFORMATION

 

The sales volume for Mar/2015 fiscal term amounted to Yen 22,148 million, a 19.6% down from Yen 27,549 million in the previous term.  Sales of existing stores fell sharply below the preceding term as a result of the reactionary downturn after the demand upsurge prior to the consumption tax hike.  The recurring profit was posted at Yen 2,237 million and the net profit at Yen 1,188 million, compared with Yen 3,736 million recurring profit and Yen 2,297 million net profit a year ago.

 

For the current term ending Mar 2016 the recurring profit is projected at Yen 2,300 million and the net profit at Yen 1,250 million, on a 3.8% rise in turnover, to Yen 23,000 million.  Sales of existing stores will make a recovery. 

 

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

 

 

REGISTRATION

           

Date Registered:                       Jun 1973

Regd No.:                                 0300-01-021115 (Saitama-Warabi)

Legal Status:               Limited Company (Kabushiki Kaisha)

Authorized:                  40 million shares

Issued:                          20,080,480 shares

Sum:                            Yen 13,098 million

 

Major shareholders (%): Seiji Tsutsumi (48.4), State Street Bank & Trust (7.0), Shizuko Tsutsumi (6.3), Tsutsumi Scholarship Found (4.9), CBNYDFA Int’l Cap Value P (3.9), Japan Trustee Services T (2.5), State Street Bank & Trust 505044 (1.4), State Street Bank & Trust 505103 (1.4), JP Morgan Chase Bank 385166 (1.3), CBNYDFA Int’l Corp Value P (1.3); foreign owners (26.0)

 

No. of shareholders: 4,090

 

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

 

Managements: Seiji Tsutsumi, ch; Satoshi Tagai, pres; Keizo Fujieda, v pres; Katsumi Shindo, dir; Katsumi Okano, dir; Mitsuo Ohtomo; dir; Koji Shidatsu, dir; Atsuhide Mizutani, dir

 

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

 

 

OPERATION

 

Activities: Retails & wholesales jewelry, operating a total 187 jewelry chain stores centrally in greater-Tokyo regions:

 

(Sales breakdown by divisions): Rings (37%), necklaces & bracelets (35%), personal     goods (15%), others (13%). 

Retail (95%); wholesale (5%).  Goods are imported through trading houses.

 

Clients: Consumers, department stores, jewelry stores, chain stores, supermarkets, other

No. of accounts: Unavailable

Domestic areas of activities: Nationwide

 

Suppliers: [Mfrs, wholesalers] Marubeni Corp, Sumitomo Materials, Sojitz Corp, etc.

Imports from: USA, Belgium, Israel, India & Thailand.

 

Payment record: No Complaints

 

Location: Business area in Warabi City, Saitama-Pref.  Office premises at the caption address are owned and maintained satisfactorily.

 

Bank References:

SMBC (Akabane)

MUFG (Warabi)

Relations: Satisfactory

 

 

FINANCES

 (In Million Yen)

 

FINANCES: (Consolidated in million yen)

　

　

Terms Ending:

31/03/2015

31/03/2014

INCOME STATEMENT

  Annual Sales

　

22,148

27,549

  Cost of Sales

10,092

13,434

      GROSS PROFIT

12,056

14,115

  Selling & Adm Costs

9,945

10,496

      OPERATING PROFIT

2,110

3,618

  Non-Operating P/L

127

-882

      RECURRING PROFIT

2,237

2,736

　

      NET PROFIT

1,188

2,297

BALANCE SHEET

  Cash

　

42,136

41,580

  Receivables

1,059

1,787

  Inventory

19,068

18,828

  Securities, Marketable

　

　

  Other Current Assets

349

448

      TOTAL CURRENT ASSETS

62,612

62,643

  Property & Equipment

12,379

12,594

  Intangibles

940

773

  Investments, Other Fixed Assets

5,491

5,090

      TOTAL ASSETS

81,422

81,100

  Payables

192

370

  Short-Term Bank Loans

　

　

　

　

　

  Other Current Liabs

1,726

2,196

      TOTAL CURRENT LIABS

1,918

2,566

  Debentures

　

　

  Long-Term Bank Loans

　

　

  Reserve for Retirement Allw

172

162

  Other Debts

　

68

45

      TOTAL LIABILITIES

2,158

2,773

      MINORITY INTERESTS

  Capital, Paid-Up

13,098

13,098

  Surplus

66,165

65,229

      SHAREHOLDERS' EQUITY

79,263

78,327

　

      TOTAL EQUITIES

81,422

81,100

CONSOLIDATED CASH FLOWS

Terms ending:

31/03/2015

31/03/2014

Cash Flows from Operating Activities

　

1,663

2,941

Cash Flows from Investment Activities

-506

-150

Cash Flows from Financing Activities

-602

-1,104

　

Cash, Bank Deposits at the Term End

　

42,135

41,580

ANALYTICAL RATIOS            Terms ending:

31/03/2015

31/03/2014

Net Worth (S/Holders' Equity)

79,263

78,327

Current Ratio (%)

3264.44

2441.27

Net Worth Ratio (%)

97.35

96.58

Recurring Profit Ratio (%)

10.10

9.93

Net Profit Ratio (%)

5.36

8.34

Return On Equity (%)

1.50

2.93

 

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.65.22

UK Pound

1

Rs.102.23

Euro

1

Rs.72.39

 

INFORMATION DETAILS

 

Analysis Done by :

KAS

 

 

Report Prepared by :

NIT

 

               

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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