MIRA INFORM REPORT
|
Report No. : |
354541 |
|
Report Date : |
18.12.2015 |
IDENTIFICATION DETAILS
|
Name : |
MKS JEWELRY INTERNATIONAL CO., LTD. |
|
|
|
|
Registered Office : |
47/1 Moo 4, Gemopolis Industrial Estate, Dokmai, Praves, Bangkok 10250, |
|
|
|
|
Country : |
Thailand |
|
|
|
|
Financials (as on) : |
31.12.2014 |
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|
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Date of Incorporation : |
26.08.1992 |
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|
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Com. Reg. No.: |
0105535119961 |
|
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|
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Legal Form : |
Private Limited Company |
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|
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Line of Business : |
The subject is engaged in design and manufacturing of gold, diamond
and platinum jewelry under customer’s requirement. |
|
|
|
|
No. of Employee : |
250 |
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 |
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Payment Behaviour : |
Slow but correct |
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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) |
|
Thailand |
B1 |
A2 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
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Restricted |
C2 |
|
Off-credit |
D |
THAILAND - ECONOMIC
OVERVIEW
With a well-developed infrastructure, a free-enterprise economy, and generally pro-investment policies Thailand has historically had a strong economy due in part to competitive industrial and agriculture exports - mostly electronics, agricultural commodities, automobiles and parts, and processed foods. The economy experienced slow growth and declining exports in 2014, in part due to domestic political turmoil and sluggish global demand. With full employment, Thailand attracts an estimated 2-4 million migrant workers from neighboring countries, and faces labor shortages. Following the May 2014 coup d'etat, tourism decreased 6-7% but is beginning to recover. The household debt to GDP ratio is over 80%. 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 baht has remained stable.
|
Source
: CIA |
Company
summery
MKS
JEWELRY INTERNATIONAL CO.,
LTD.
SUMMARY
BUSINESS
ADDRESS : 47/1
MOO 4, GEMOPOLIS
INDUSTRIAL ESTATE,
DOKMAI, PRAVES,
BANGKOK 10250,
THAILAND
TELEPHONE : [66] 2727-0150-9
FAX :
[66] 2727-0160-1
E-MAIL
ADDRESS : sales@mksjewelry.com
REGISTRATION
ADDRESS : SAME
AS BUSINESS ADDRESS
ESTABLISHED
: 1992
REGISTRATION
NO. : 0105535119961 [Former : 11665/2535]
TAX
ID NO. : 3011166000
CAPITAL REGISTERED : BHT. 124,950,000
CAPITAL PAID-UP : BHT.
124,950,000
SHAREHOLDER’S PROPORTION : MAURITIUS : 99.99%
THAI
: 0.01%
FISCAL YEAR CLOSING DATE : DECEMBER 31
LEGAL
STATUS : PRIVATE LIMITED
COMPANY
EXECUTIVE : MR.
MAJID ABDULREZA ALGOUNEH,
DUTCH
MANAGING DIRECTOR
NO.
OF STAFF : 250
LINES
OF BUSINESS : GOLD
AND PLATINUM JEWELRY
MANUFACTURER AND
EXPORTER
CORPORATE PROFILE
OPERATING
TREND : STABLE
PRESENT
SITUATION : OPERATING NORMALLY
REPUTATION : GOOD
WITH NORMAL BUSINESS
ENGAGEMENT
MANAGEMENT
STANDARD : MANAGEMENT WITH
FAIR PERFORMANCE
HISTORY
The subject was
established on August
26, 1992 as
a private limited
company under the
registered name MKS
JEWELRY INTERNATIONAL CO.,
LTD., to manufacture
wide range of jewelry
products for export markets.
It currently employs
approximately 250 staff.
In 1998, the subject joined
the German based company, J. E. Hammer & Soehne GmbH,
one of the
largest jewelry manufacturers
in Europe.
At present, MKS
is one of
Thailand’s largest jewelry
manufacturers and the
first to introduce the invisible setting design in
Thailand. It is a wholly
owned subsidiary of
Xorpio Financial Investments
Limited, Mauritius.
MKS has been operating the
production facilities in
Gemopolis, an exclusive
tax-free-zone located at 47/1 Moo 4, Dokmai, Praves, Bangkok 10250,
and this
is also the
company’s registered address
and current operation
address.
THE BOARD
OF DIRECTORS
|
Name |
|
Nationality |
Age |
|
|
|
|
|
|
Mr. Majid Abdulreza
Algouneh |
|
Dutch |
47 |
|
Mr. Nader Algouneh |
|
Canadian |
51 |
|
Ms. Marjan Algouneh |
|
Canadian |
45 |
|
Mrs. Priti Mehta |
|
Indian |
44 |
|
Mr. Nital Rashmikant Kapadia |
|
Indian |
44 |
AUTHORIZED PERSON
Anyone of the
above directors can
sign on behalf
of the subject
with company’s affixed.
MANAGEMENT
Mr. Majid Abdulreza
Algouneh is the
Managing Director.
He is Dutch
nationality with the
age of 47
years old.
Mr. Nital Rashmikant Kapadia
is the General
Manager.
He is Indian
nationality with the
age of 44
years old.
Mr. Marcel Ballmer is
the Senior Manager
and Factory Manager.
He is Dutch
nationality.
BUSINESS OPERATIONS
The subject is engaged in design and manufacturing of gold, diamond and platinum
jewelry under customer’s
requirement.
PRODUCTION CAPACITY
Approximately 2,000 pieces
per day
PURCHASE
Diamonds, Gemstones and other
raw materials, accessories
and equipments for
the production are purchased from
both local and overseas suppliers in Germany, India, Pakistan,
Japan, Italy, Republic
of China and Hong Kong.
MAJOR SUPPLIERS
J. E. Hammer & Soehne
GmbH : Germany
[20-30%]
EXPORT
100% of the
products is exported
to Germany, Japan,
Hong Kong, Korea,
Singapore, Brunei, Canada,
Italy, Switzerland, Sweden,
Netherlands, France, United
Kingdom, Australia, United
States of America
and the country
in Middle East.
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
according for the past
two years.
CREDIT
Local bills are
paid by cash
or on the
credits term of
30-60-90 days.
Imports are by
L/C at sight
or T/T.
Exports are against
L/C at sight
or T/T.
BANKING
Bangkok Bank Public
Co., Ltd.
[Head Office :
333 Silom Rd.,
Silom, Bangrak, Bangkok 10500]
EMPLOYMENT
The subject employs
approximately 250 office
staff and factory
workers.
LOCATION DETAILS
The premise is owned for
administrative office and
factory at the
heading address. Premise
is located in
an industrial area.
COMMENT
The
subject is a
leading manufacturer and
exporter of gold
and platinum jewelry. With
its accumulated experience
for more than
20 years, the subject
has gained creditability
and comprehensive work
in the industry.
Despite
slow consumption of
jewelry products of
both domestic and
exports, the subject
still maintains its strong business.
FINANCIAL
INFORMATION
The capital was
initially registered at
Bht. 14,000,000 divided
into 10,000 shares
of Bht. 1,400
each.
The capital was
increased and decreased
later as follows:
Increased were : Bht.
100,000,000 on March
26, 1999
Bht. 208,390,000
on December 23,
1999
Bht. 232,001,000
on December 25,
2001
Decreased were : Bht. 372,001,000
on December 17,
2004
Bht. 114,947,000
on October 26,
2005
Bht. 124,950,000
on September 25,
2012
The latest registered
capital was decreased
to Bht. 124,950,000 divided
into 89,250 shares
of Bht. 1,400
each with fully
paid.
THE SHAREHOLDERS
LISTED WERE
[as at April
30, 2015]
|
NAME |
HOLDING |
% |
|
|
|
|
|
Xorpio Financial Investments
Limited Nationality: Mauritius Address : Waterfront
Port Louis, Mauritius |
89,244 |
99.99 |
|
Infostar Business Solutions
Ltd. Nationality: Thai Address : 1558/17
Bangna-Trad Rd., Bangkaew,
Bangplee, Samutprakarn |
1 |
|
|
Mr. Worawut Krairit Nationality: Thai Address : 72/11
Moo 5, Thasai, Muang,
Nonthaburi |
1 |
|
|
Mrs. Nipa Pakdeechanuan Nationality: Thai Address : 59/59
Moo 19, Boromratchonnee Rd.,
Salathammasop,
Taweewatana, Bangkok |
1 |
|
|
Mr. Poosit Luengruengtip Nationality: Thai Address : 104/11
Udorndusadee Rd., Makkaeng,
Muang, Udornthani
|
1 |
= 0.01 |
|
Ms. Benjawan Rajdusadee Nationality: Thai Address : 84/9
Ngamwongwan Rd., Bangkhen,
Muang,
Nonthaburi |
1 |
|
|
Mrs. Panjama Chantawut Nationality: Thai Address : 11 Takleepatana Rd.,
Taklee,
Nakornsawan |
1 |
|
Total Shareholders : 7
Share Structure [as
at April 30,
2015]
|
Nationality |
Shareholders |
No. of Share |
% Shares |
|
|
|
|
|
|
Thai |
6 |
6 |
0.01 |
|
Foreign - Mauritius |
1 |
89,244 |
99.99 |
|
Total |
7 |
89,250 |
100.00 |
NAME OF
AUDITOR & CERTIFIED
PUBLIC ACCOUNTANT NO.
Mr. Walit Panpoonsup No.
11126
BALANCE
SHEET [BAHT]
The latest financial figures published as
at December 31, 2014,
2013 & 2012
were:
ASSETS
|
Current Assets |
2014 |
2013 |
2012 |
|
|
|
|
|
|
Cash and Cash Equivalents |
3,625,116.68 |
1,016,813.32 |
3,692,283.80 |
|
Trade Accounts Receivable
|
367,221,727.60 |
430,327,724.88 |
407,551,067.12 |
|
Receivable - Related Company |
68,772,240.82 |
136,176,950.17 |
- |
|
Other Receivable |
9,033,346.93 |
3,288,255.19 |
1,541,708.59 |
|
Total
Trade Accounts Receivable
|
445,027,315.35 |
569,792,930.24 |
409,092,775.71 |
|
Inventories |
183,770,675.43 |
138,043,443.94 |
98,472,818.73 |
|
Refundable Value Added Tax |
1,297,975.04 |
1,082,895.39 |
612,532.91 |
|
Other Current Assets
|
138,255.98 |
108,763.24 |
584,816.14 |
|
|
|
|
|
|
Total Current Assets
|
633,859,338.48 |
710,044,846.13 |
512,455,227.29 |
|
Cash at Bank pledged as a Collateral |
39,104,568.94 |
34,047,062.01 |
32,906,840.00 |
|
Fixed Assets |
104,395,408.21 |
120,397,066.95 |
123,979,284.69 |
|
Other Non-current Assets |
698,509.00 |
683,467.29 |
1,404,414.29 |
|
Total Assets |
778,057,824.63 |
865,172,442.38 |
670,745,766.27 |
LIABILITIES & SHAREHOLDERS’
EQUITY [BAHT]
|
Current
Liabilities |
2014 |
2013 |
2012 |
|
|
|
|
|
|
Bank Overdraft & Short-term Loan From Financial Institutions |
359,956,544.59 |
335,850,927.08 |
328,310,351.78 |
|
Trade Accounts Payable
|
73,783,265.83 |
79,371,109.02 |
41,075,079.31 |
|
Payable - Related Company |
31,471,489.01 |
139,987,255.48 |
- |
|
Other Payable |
8,750,306.65 |
7,534,326.80 |
8,364,804.76 |
|
Total Trade Accounts
& Other Payable |
114,005,061.49 |
226,892,691.30 |
49,439,884.07 |
|
Current Portion of
Financial Lease Contract Liabilities |
2,993,326.88 |
5,929,516.24 |
7,014,175.00 |
|
Accrued Income Tax |
590,190.00 |
1,676,673.73 |
3,315,121.42 |
|
Other Current Liabilities |
744,333.09 |
587,699.65 |
477,153.04 |
|
|
|
|
|
|
Total Current Liabilities |
478,289,456.05 |
570,937,508.00 |
388,556,685.31 |
|
Financial Lease Contract Liabilities |
1,301,776.53 |
4,760,659.01 |
6,023,644.00 |
|
Long-term Loan from Foreign |
105,796,564.22 |
105,632,764.22 |
103,552,834.74 |
|
Other Liabilities - Employee
Benefits |
1,262,987.13 |
1,951,000.00 |
704,432.55 |
|
Other Non-current Liabilities |
4,511,106.60 |
3,006,068.66 |
2,571,569.50 |
|
Total Liabilities |
591,161,890.53 |
686,287,999.89 |
501,409,166.10 |
|
|
|
|
|
|
Shareholders' Equity |
|
|
|
|
|
|
|
|
|
Share capital : Baht 1,400
par value authorized, and
issued share capital
89,250 shares |
124,950,000.00 |
124,950,000.00 |
124,950,000.00 |
|
|
|
|
|
|
Capital Paid |
124,950,000.00 |
124,950,000.00 |
124,950,000.00 |
|
Retained Earning Unappropriated |
61,945,934.10 |
53,934,442.49 |
44,386,600.17 |
|
Total Shareholders' Equity |
186,895,934.10 |
178,884,442.49 |
169,336,600.17 |
|
Total Liabilities &
Shareholders' Equity |
778,057,824.63 |
865,172,442.38 |
670,745,766.27 |
PROFIT &
LOSS ACCOUNT
|
Revenue |
2014 |
2013 |
2012 |
|
|
|
|
|
|
Sales Income |
871,833,086.26 |
844,051,068.99 |
834,513,288.59 |
|
Gain on Exchange Rate |
- |
- |
2,364,440.63 |
|
Other Income |
3,825,487.72 |
8,903,050.94 |
6,592,917.74 |
|
Total Revenues |
875,658,573.98 |
852,954,119.93 |
843,470,646.96 |
|
Expenses |
|
|
|
|
|
|
|
|
|
Cost of Goods
Sold |
797,075,235.45 |
771,780,144.40 |
771,467,232.12 |
|
Selling Expenses |
11,923,372.15 |
10,503,672.77 |
3,089,167.37 |
|
Administrative Expenses |
34,776,762.37 |
34,284,634.92 |
34,958,784.28 |
|
Loss on Exchange Rate |
5,986,172.86 |
7,519,424.16 |
- |
|
Total Expenses |
849,761,542.83 |
824,087,876.25 |
809,515,183.77 |
|
|
|
|
|
|
Profit before Financial Cost & Income
Tax |
25,897,031.15 |
28,866,243.68 |
33,955,463.19 |
|
Financial Cost |
[16,430,755.89] |
[17,025,921.33] |
[16,726,027.02] |
|
Income Tax |
[1,454,783.65] |
[2,292,480.03] |
[3,846,133.40] |
|
|
|
|
|
|
Net Profit / [Loss] |
8,011,491.61 |
9,547,842.32 |
13,383,302.77 |
FINANCIAL ANALYSIS
|
ITEM |
UNIT |
2014 |
2013 |
2012 |
|
|
|
|
|
|
|
LIQUIDITY RATIO |
|
|
|
|
|
CURRENT RATIO |
TIMES |
1.33 |
1.24 |
1.32 |
|
QUICK RATIO |
TIMES |
0.94 |
1.00 |
1.06 |
|
|
|
|
|
|
|
ACTIVITY RATIO |
|
|
|
|
|
FIXED ASSETS TURNOVER |
TIMES |
8.35 |
7.01 |
6.73 |
|
TOTAL ASSETS TURNOVER |
TIMES |
1.12 |
0.98 |
1.24 |
|
INVENTORY CONVERSION PERIOD |
DAYS |
84.15 |
65.29 |
46.59 |
|
INVENTORY TURNOVER |
TIMES |
4.34 |
5.59 |
7.83 |
|
RECEIVABLES CONVERSION PERIOD |
DAYS |
153.74 |
186.09 |
178.25 |
|
RECEIVABLES TURNOVER |
TIMES |
2.37 |
1.96 |
2.05 |
|
PAYABLES CONVERSION PERIOD |
DAYS |
33.79 |
37.54 |
19.43 |
|
CASH CONVERSION CYCLE |
DAYS |
204.11 |
213.84 |
205.41 |
|
|
|
|
|
|
|
PROFITABILITY
RATIO |
|
|
|
|
|
COST OF GOODS SOLD |
% |
91.43 |
91.44 |
92.45 |
|
SELLING & ADMINISTRATION |
% |
5.36 |
5.31 |
4.56 |
|
INTEREST |
% |
1.88 |
2.02 |
2.00 |
|
GROSS PROFIT MARGIN |
% |
9.01 |
9.62 |
8.63 |
|
NET PROFIT MARGIN BEFORE EX. ITEM |
% |
2.97 |
3.42 |
4.07 |
|
NET PROFIT MARGIN |
% |
0.92 |
1.13 |
1.60 |
|
RETURN ON EQUITY |
% |
4.29 |
5.34 |
7.90 |
|
RETURN ON ASSET |
% |
1.03 |
1.10 |
2.00 |
|
EARNING PER SHARE |
BAHT |
89.76 |
106.98 |
149.95 |
|
|
|
|
|
|
|
LEVERAGE RATIO |
|
|
|
|
|
DEBT RATIO |
TIMES |
0.76 |
0.79 |
0.75 |
|
DEBT TO EQUITY RATIO |
TIMES |
3.16 |
3.84 |
2.96 |
|
TIME INTEREST EARNED |
TIMES |
1.58 |
1.70 |
2.03 |
|
|
|
|
|
|
|
ANNUAL GROWTH |
|
|
|
|
|
SALES GROWTH |
% |
3.29 |
1.14 |
|
|
OPERATING PROFIT |
% |
(10.29) |
(14.99) |
|
|
NET PROFIT |
% |
(16.09) |
(28.66) |
|
|
FIXED ASSETS |
% |
(13.29) |
(2.89) |
|
|
TOTAL ASSETS |
% |
(10.07) |
28.99 |
|
ANNUAL GROWTH :
RISKY
An annual sales growth is 3.29%. Turnover has increased from THB
PROFITABILITY :
ACCEPTABLE
PROFITABILITY
RATIO
|
Gross Profit Margin |
9.01 |
Impressive |
Industrial Average |
4.74 |
|
Net Profit Margin |
0.92 |
Deteriorated |
Industrial Average |
4.06 |
|
Return on Assets |
1.03 |
Deteriorated |
Industrial Average |
4.95 |
|
Return on Equity |
4.29 |
Deteriorated |
Industrial Average |
12.58 |
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. Gross Profit Margin is 9.01%. When compared with the industry
average, the ratio of the company was higher, indicated that company was more
profitable than the same industry.
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 0.92%.
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 1.03%.
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 4.29%.
Trend of the
average competitors in the same industry for last 5 years
Return on Assets Downtrend
Return on Equity Downtrend
LIQUIDITY : RISKY
LIQUIDITY RATIO
|
Current Ratio |
1.33 |
Satisfactory |
Industrial Average |
1.44 |
|
Quick Ratio |
0.94 |
|
|
|
|
Cash Conversion Cycle |
204.11 |
|
|
|
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 1.33 times in 2014, decrease from 1.24 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 0.94 times in 2014,
decrease from 1 time, by excluding inventory, the company may have problems meeting
current liabilities.
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 205 days.
Trend of the
average competitors in the same industry for last 5 years
Current Ratio Downtrend
LEVERAGE :
IMPRESSIVE
LEVERAGE RATIO
|
Debt Ratio |
0.76 |
Impressive |
Industrial Average |
0.77 |
|
Debt to Equity Ratio |
3.16 |
Acceptable |
Industrial Average |
3.32 |
|
Times Interest Earned |
1.58 |
Impressive |
Industrial Average |
- |
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 1.58 higher than 1, so the company can pay interest
expenses on outstanding debt.
Debt Ratio shows the proportion of a company's assets which are financed
through debt. The company's figure is 0.76 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 Uptrend
Times Interest Earned Stable
ACTIVITY :
IMPRESSIVE
ACTIVITY RATIO
|
Fixed Assets Turnover |
8.35 |
Impressive |
Industrial Average |
- |
|
Total Assets Turnover |
1.12 |
Satisfactory |
Industrial Average |
1.22 |
|
Inventory Conversion Period |
84.15 |
|
|
|
|
Inventory Turnover |
4.34 |
Impressive |
Industrial Average |
3.23 |
|
Receivables Conversion Period |
153.74 |
|
|
|
|
Receivables Turnover |
2.37 |
Impressive |
Industrial Average |
1.50 |
|
Payables Conversion Period |
33.79 |
|
|
|
The company's Account Receivable Ratio is calculated as 2.37 and
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 65 days at the
end of 2013 to 84 days at the end of 2014. This represents a negative trend.
And Inventory turnover has decreased from 5.59 times in year 2013 to 4.34 times
in year 2014.
The company's Total Asset Turnover is calculated as 1.12 times and 0.98
times in 2014 and 2013 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 Stable
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.66.65 |
|
|
1 |
Rs.99.61 |
|
Euro |
1 |
Rs.72.33 |
|
THB |
1 |
Rs.1.84 |
Note :
Above are approximate rates obtained from sources believed to be correct
INFORMATION DETAILS
|
Analysis Done by
: |
HEE |
|
|
|
|
Report Prepared
by : |
TRU |
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.