MIRA INFORM REPORT
|
Report No. : |
322212 |
|
Report Date : |
11.05.2015 |
IDENTIFICATION DETAILS
|
Name : |
FLAWLESS CO.,
LTD. |
|
|
|
|
Registered Office : |
Room 1909-1911, 19th Floor, Jewelry Trade Center, 919/245-247 Silom Road, Silom, Bangrak, Bangkok 10500 |
|
|
|
|
Country : |
Thailand |
|
|
|
|
Financials (as on) : |
31.12.2013 |
|
|
|
|
Date of Incorporation : |
29.11.1985 |
|
|
|
|
Com. Reg. No.: |
0105528041715 |
|
|
|
|
Legal Form : |
Private
Limited Company |
|
|
|
|
Line of Business : |
Subject’s activities are
importer and distributor
of diamonds, gems,
precious stones and
jewelry products to
local jewelry trading
and production industry,
as well as
export of Thai’s
cutting diamonds and
jewelry products. |
|
|
|
|
No of Employees : |
25 |
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 : |
Slow but correct |
|
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 December 31, 2014
|
Country Name |
Previous Rating (30.09.2014) |
Current Rating (31.12.2014) |
|
Thailand |
B1 |
B1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
Off-credit |
D |
THAILAND - ECONOMIC OVERVIEW
With a well-developed
infrastructure, a free-enterprise economy, generally pro-investment policies, and
strong export industries, Thailand achieved steady growth due largely to
industrial and agriculture exports - mostly electronics, agricultural
commodities, automobiles and parts, and processed foods. Unemployment, at less
than 1% of the labor force, stands as one of the lowest levels in the world,
which puts upward pressure on wages in some industries. Thailand also attracts
nearly 2.5 million migrant workers from neighboring countries. 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 economy has weathered internal and external
economic shocks in recent years. The global economic recession severely cut
Thailand's exports, with most sectors experiencing double-digit drops. In late
2011 Thailand's recovery was interrupted by historic flooding in the industrial
areas in Bangkok and its five surrounding provinces, crippling the
manufacturing sector. The government approved flood mitigation projects worth
$11.7 billion, which were started in 2012, to prevent similar economic damage,
and an additional $75 billion for infrastructure over the following seven
years. This was expected to lead to an economic upsurge but growth has remained
slow, in part due to ongoing political unrest and resulting uncertainties.
Spending on infrastructure will require re-approval once a new government is
seated.
|
Source
: CIA |
COMPANY
NAME
FLAWLESS CO., LTD.
SUMMARY
BUSINESS ADDRESS : ROOM
1909-1911, 19th
FLOOR,
JEWELRY TRADE
CENTER,
919/245-247 SILOM
ROAD, SILOM,
BANGRAK, BANGKOK
10500, THAILAND
TELEPHONE : [66] 2630-0444-6, 2235-9664
FAX :
[66] 2630-0443,
2237-8562
E-MAIL
ADDRESS : flawless@flawlesscompany.com
REGISTRATION
ADDRESS : SAME
AS BUSINESS ADDRESS
ESTABLISHED
: 1985
REGISTRATION
NO. : 0105528041715 [Former : 4171/2528]
TAX
ID NO. : 3101369687
CAPITAL REGISTERED : BHT. 90,000,000
CAPITAL PAID-UP : BHT.
90,000,000
SHAREHODER’S
PROPORTION : THAI :
51.00%
INDIAN : 49.00%
FISCAL YEAR CLOSING DATE : DECEMBER 31
LEGAL
STATUS : PRIVATE LIMITED
COMPANY
EXECUTIVE : MR.
SUNIL KOTHARI, INDIAN
PRESIDENT
NO.
OF STAFF : 25
LINES
OF BUSINESS : DIAMONDS, GEMS
AND JEWELRY PRODUCTS
IMPORTER, EXPORTER
AND DISTRIBUTOR
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 November 29, 1985
as a private
limited company under
the name style
FLAWLESS CO., LTD, by Thai
and Indian groups,
in order to
import, distribute and export
diamonds, gems and
jewelry products. It
currently employs 25
staff.
The
subject’s registered address
was Room 1909-1910,
19th Floor,
Jewelry Trade Center, 919/245-246
Silom Rd., Silom,
Bangrak, Bangkok 10500.
In
2010, its registered
address was relocated
to Room 1909-1911,
19th Floor, Jewelry
Trade Center, 919/245-247
Silom Rd., Silom, Bangrak,
Bangkok 10500, and
this is the
subject’s current operation
address.
THE
BOARD OF DIRECTORS
|
Name |
|
Nationality |
Age |
|
|
|
|
|
|
Mr. Sunil Kothari
|
|
Indian |
52 |
|
Mr. Alongkorn Bovonveerakij |
|
Thai |
62 |
|
Mr. Poonam Chand
Kothari |
|
Indian |
46 |
AUTHORIZED
PERSON
Anyone of the
above directors can
sign on behalf
of the subject
with company’s affixed.
MANAGEMENT
Mr. Sunil Kothari
is the President.
He is Indian
nationality with the
age of 52
years old.
Mr. Poonam Chand Kothari
is the Managing
Director.
He is Indian
nationality with the
age of 46
years old.
Mr. Alongkorn Bovonveerakij is
the Executive Director.
He is Thai
nationality with the
age of 62
years old.
Mrs. Panvadee Bovonveerakij is
the Assistant Managing
Director.
She is Thai
nationality.
BUSINESS
OPERATIONS
The subject’s activities
are importer and
distributor of diamonds,
gems, precious stones
and jewelry products
to local jewelry
trading and production
industry, as well
as export of
Thai’s cutting diamonds
and jewelry products.
PURCHASE
Diamonds
and precious stones
are purchased from
both local and
overseas suppliers in
India, Belgium, Hong
Kong and South
Africa.
MAJOR
SUPPLIERS
Flawless Diamond [India]
Ltd. : India
Concorde International Ltd. : India
SALES
[LOCAL]
80%
of the products
is sold locally
by wholesale to
local traders and
manufacturers.
EXPORT
20% of the
products is exported
to Hong Kong, Japan,
Indonesia, Republic of
China and European
countries.
SUBSIDIARY
AND AFFILIATED COMPANY
The subject is
not found to have any
subsidiary or affiliated
company here in
Thailand.
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 to the
past two years.
CREDIT
Sales
are by cash
or on the
credit term of
30-60 days.
Local
bills are paid
by cash or
on the credit
term of 30-60
days.
Imports
are by L/C
at sight or
T/T.
Exports
are against T/T.
BANKING
BANGKOK BANK
PUBLIC CO., LTD.
[Head Office : 333
Silom Rd., Silom,
Bangrak, Bangkok]
EMPLOYMENT
The
subject employs 25
staff [office and sales staff].
LOCATION
DETAILS
The
premise is rented
for administrative office
at the heading
address. Premise is
located in a prime commercial area.
COMMENT
The
subject is a
leading supplier of
diamonds and precious
stones in local
market for many
years. With long experience and focusing
on high valued products
to respond to
customer demands has
enabled the subject
to be recognized among
its customers.
In 2014 the
subject has closely monitored the
impacts from the US economy,
the ongoing financial crisis in Europe and the recent economy slowdown have
affected on the
demand of the
products.
FINANCIAL
INFORMATION
The
capital was initially registered at Bht. 1,000,000 divided into 1,000 shares of
Bht. 1,000 each.
The capital was increased later as follows:
Bht 16,000,000 on
October 25, 1995
Bht. 25,000,000
on March 14,
2006
Bht. 45,000,000
on June 29,
2007
Bht. 60,000,000
on June 5,
2008
Bht. 80,000,000
on October 10,
2008
Bht. 90,000,000
on March 4,
2009
The
latest registered capital
was increased to
Bht. 90,000,000 divided into
90,000 shares of
Bht. 1,000 each with
fully paid.
THE
SHAREHOLDERS LISTED WERE
[as
at April 30,
2014]
|
NAME |
HOLDING |
% |
|
|
|
|
|
Mr. Sunil Kothari Nationality: Indian Address : 919/245-247
Silom Rd., Silom,
Bangrak
Bangkok 10500 |
21,500 |
23.89 |
|
Mr. Poonam Chand
Kothari Nationality: Indian Address : 919/245-247
Silom Rd., Silom,
Bangrak
Bangkok 10500 |
18,100 |
20.11 |
|
Mrs. Panvadee Bavonveerakij Nationality: Thai Address : 19/62
Moo 2, Ladprao, Bangkok |
13,000 |
14.44 |
|
Mr. Alongkorn Bavonveerakij Nationality: Thai Address : 19/62
Moo 2, Ladprao, Bangkok
|
10,000 |
11.11 |
|
Mrs. Chotika Khantachawana Nationality: Thai Address : 1298/489
Rama 3 Rd.,
Chongnonsi, Yannawa, Bangkok |
5,900 |
6.56 |
|
Ms. Suchanart Chokechaicharoen Nationality: Thai Address : 74/433
Ramkhamhaeng 180 Rd.,
Minburi, Bangkok |
5,000 |
5.57 |
|
Mr. Siddharth Kothari Nationality: Indian Address : C-106
Jhankar Bhawan, Savitri
Path, Bapu Nagar,
Jaipur, India |
4,500 |
5.00 |
|
Mr. Pattapol Bavonveerakij Nationality: Thai Address : 19/62
Moo 2, Ladprao, Bangkok |
4,000 |
4.44 |
|
Mr. Chinapat Bavonveerakij Nationality: Thai Address : 19/62
Moo 2, Ladprao, Bangkok |
4,000 |
4.44 |
|
Ms. Aim-orn Sak-arpha Nationality: Thai Address : 59/17
Moo 4, Bangtalad,
Pakkred, Nonthaburi |
4,000 |
4.44 |
Total Shareholders : 10
Share Structure [as
at April 30,
2014]
|
Nationality |
Shareholders |
No. of Share |
% Shares |
|
|
|
|
|
|
Thai |
7 |
45,900 |
51.00 |
|
Foreign-Indian |
3 |
44,100 |
49.00 |
|
Total |
10 |
90,000 |
100.00 |
NAME
OF AUDITOR &
CERTIFIED PUBLIC ACCOUNTANT
NO
Mr. Anirut Ngamrungkij
No. 3730
BALANCE
SHEET [BAHT]
The
latest financial figures
published for December
31, 2013, 2012 & 2011 were:
ASSETS
|
Current Assets |
2013 |
2012 |
2011 |
|
|
|
|
|
|
Cash and Cash Equivalents |
902,186.14 |
490,670.68 |
5,189,821.26 |
|
Trade Accounts Receivable |
122,377,678.61 |
99,630,113.99 |
153,077,718.42 |
|
Inventories |
290,896,308.56 |
224,003,868.46 |
159,679,441.80 |
|
Other Current Assets
|
1,360,447.81 |
835,610.20 |
576,032.11 |
|
Total Current Assets
|
415,536,621.12 |
324,960,263.33 |
318,523,013.59 |
|
|
|
|
|
|
Fixed Deposit |
2,100,000.00 |
2,100,000.00 |
2,119,750.50 |
|
Fixed Assets |
2,944,929.44 |
4,079,473.98 |
2,137,575.50 |
|
Total Assets |
420,581,550.56 |
331,139,737.31 |
322,780,339.59 |
LIABILITIES &
SHAREHOLDERS' EQUITY [BAHT]
|
Current
Liabilities |
2013 |
2012 |
2011 |
|
|
|
|
|
|
Bank Overdraft &
Short-term Loan from Financial
Institutions |
127,272,382.02 |
86,270,278.36 |
68,464,284.40 |
|
Trade Accounts Payable |
180,355,566.07 |
111,327,281.35 |
130,921,339.36 |
|
Other Payable |
963,752.05 |
3,458,351.26 |
175,044.25 |
|
Accrued Income Tax |
- |
1,318,388.28 |
- |
|
Accrued Expenses |
497,857.46 |
761,641.77 |
439,759.06 |
|
Other Current Liabilities |
257,119.73 |
1,260,590.31 |
1,816,029.17 |
|
Total Current Liabilities |
309,346,677.33 |
204,396,531.33 |
201,816,456.24 |
|
Total Liabilities |
309,346,677.33 |
204,396,531.33 |
201,816,456.24 |
|
|
|
|
|
|
Shareholders' Equity |
|
|
|
|
|
|
|
|
|
Share capital : Baht 1,000
par value authorized, issued
and fully paid share
capital 90,000 shares |
90,000,000.00 |
90,000,000.00 |
90,000,000.00 |
|
Capital Paid |
90,000,000.00 |
90,000,000.00 |
90,000,000.00 |
|
Retained Earning Appropriated for
Statutory Reserve |
9,000,000.00 |
9,000,000.00 |
9,000,000.00 |
|
Unappropriated |
12,234,873.23 |
27,743,205.98 |
21,963,883.35 |
|
Total Shareholders' Equity |
111,234,873.23 |
126,743,205.98 |
120,963,883.35 |
|
Total Liabilities &
Shareholders' Equity |
420,581,550.56 |
331,139,737.31 |
322,780,339.59 |
PROFIT &
LOSS ACCOUNT
|
Revenue |
2013 |
2012 |
2011 |
|
|
|
|
|
|
Sales |
626,853,239.54 |
664,060,631.98 |
759,308,037.17 |
|
Gain on Exchange
Rate |
- |
7,681,095.49 |
- |
|
Other Income |
249,555.92 |
462,234.61 |
135,129.89 |
|
Total Revenues |
627,102,795.46 |
672,203,962.08 |
759,443,167.06 |
|
Expenses |
|
|
|
|
|
|
|
|
|
Cost of Goods
Sold |
584,603,985.63 |
620,279,471.98 |
716,768,609.03 |
|
Selling Expenses |
11,667,111.03 |
14,576,873.02 |
11,576,421.84 |
|
Administrative Expenses |
19,543,188.99 |
21,438,401.07 |
18,839,733.09 |
|
Loss on Exchange
Rate |
21,346,894.63 |
- |
1,838,499.67 |
|
Total Expenses |
637,161,180.28 |
656,294,746.07 |
749,023,263.63 |
|
Profit / [Loss] Before Financial Cost & Income Tax |
[10,058,384.82] |
15,909,216.01 |
10,419,903.43 |
|
Financial Cost |
[5,449,947.93] |
[6,681,817.92] |
[6,023,179.26] |
|
Profit / [Loss] Before Income
Tax |
[15,508,332.75] |
9,227,398.09 |
4,396,724.17 |
|
Income Tax |
- |
[3,448,075.46] |
[1,454,594.80] |
|
Net Profit / [Loss] |
[15,508,332.75] |
5,779,322.63 |
2,942,129.37 |
FINANCIAL ANALYSIS
|
ITEM |
UNIT |
2013 |
2012 |
2011 |
|
|
|
|
|
|
|
LIQUIDITY RATIO |
|
|
|
|
|
CURRENT RATIO |
TIMES |
1.34 |
1.59 |
1.58 |
|
QUICK RATIO |
TIMES |
0.40 |
0.49 |
0.78 |
|
|
|
|
|
|
|
ACTIVITY RATIO |
|
|
|
|
|
FIXED ASSETS TURNOVER |
TIMES |
212.86 |
162.78 |
355.22 |
|
TOTAL ASSETS TURNOVER |
TIMES |
1.49 |
2.01 |
2.35 |
|
INVENTORY CONVERSION PERIOD |
DAYS |
181.62 |
131.81 |
81.31 |
|
INVENTORY TURNOVER |
TIMES |
2.01 |
2.77 |
4.49 |
|
RECEIVABLES CONVERSION PERIOD |
DAYS |
71.26 |
54.76 |
73.58 |
|
RECEIVABLES TURNOVER |
TIMES |
5.12 |
6.67 |
4.96 |
|
PAYABLES CONVERSION PERIOD |
DAYS |
112.61 |
65.51 |
66.67 |
|
CASH CONVERSION CYCLE |
DAYS |
140.27 |
121.07 |
88.23 |
|
|
|
|
|
|
|
PROFITABILITY
RATIO |
|
|
|
|
|
COST OF GOODS SOLD |
% |
93.26 |
93.41 |
94.40 |
|
SELLING & ADMINISTRATION |
% |
4.98 |
5.42 |
4.01 |
|
INTEREST |
% |
0.87 |
1.01 |
0.79 |
|
GROSS PROFIT MARGIN |
% |
6.78 |
7.82 |
5.62 |
|
NET PROFIT MARGIN BEFORE EX. ITEM |
% |
(1.60) |
2.40 |
1.37 |
|
NET PROFIT MARGIN |
% |
(2.47) |
0.87 |
0.39 |
|
RETURN ON EQUITY |
% |
(13.94) |
4.56 |
2.43 |
|
RETURN ON ASSET |
% |
(3.69) |
1.75 |
0.91 |
|
EARNING PER SHARE |
BAHT |
(172.31) |
64.21 |
32.69 |
|
|
|
|
|
|
|
LEVERAGE RATIO |
|
|
|
|
|
DEBT RATIO |
TIMES |
0.74 |
0.62 |
0.63 |
|
DEBT TO EQUITY RATIO |
TIMES |
2.78 |
1.61 |
1.67 |
|
TIME INTEREST EARNED |
TIMES |
(1.85) |
2.38 |
1.73 |
|
|
|
|
|
|
|
ANNUAL GROWTH |
|
|
|
|
|
SALES GROWTH |
% |
(5.60) |
(12.54) |
|
|
OPERATING PROFIT |
% |
(163.22) |
52.68 |
|
|
NET PROFIT |
% |
(368.34) |
96.43 |
|
|
FIXED ASSETS |
% |
(27.81) |
90.85 |
|
|
TOTAL ASSETS |
% |
27.01 |
2.59 |
|
ANNUAL
GROWTH : RISKY
An annual sales growth is -5.6%. Turnover has decreased from THB
PROFITABILITY :
RISKY
PROFITABILITY
RATIO
|
Gross Profit Margin |
6.78 |
Deteriorated |
Industrial
Average |
37.49 |
|
Net Profit Margin |
(2.47) |
Deteriorated |
Industrial
Average |
12.66 |
|
Return on Assets |
(3.69) |
Deteriorated |
Industrial
Average |
5.31 |
|
Return on Equity |
(13.94) |
Deteriorated |
Industrial
Average |
10.16 |
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. The company's figure is 6.78%. When compared with
the industry average, the ratio of the company was lower. This indicated that
company may have problems with control over its costs.
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 -2.47%.
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 -3.69%.
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 -13.94%.
Trend of the
average competitors in the same industry for last 5 years
Return on Assets Uptrend
Return on Equity Downtrend
LIQUIDITY : RISKY
LIQUIDITY RATIO
|
Current Ratio |
1.34 |
Satisfactory |
Industrial
Average |
1.58 |
|
Quick Ratio |
0.40 |
|
|
|
|
Cash Conversion Cycle |
140.27 |
|
|
|
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 1.34 times in 2013, decreased from 1.59 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 0.4 times in 2013, decreased
from 0.49 times, then the company has not enough current assets that presumably
can be quickly converted to cash for pay financial obligations.
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 141 days.
Trend of the
average competitors in the same industry for last 5 years
Current Ratio Uptrend
LEVERAGE : RISKY
LEVERAGE RATIO
|
Debt Ratio |
0.74 |
Acceptable |
Industrial
Average |
0.43 |
|
Debt to Equity Ratio |
2.78 |
Risky |
Industrial
Average |
0.75 |
|
Times Interest Earned |
(1.85) |
Risky |
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 -1.85 lower than 1, so the company is not generating enough
cash from EBIT to meet its interest obligations.
Debt Ratio shows the proportion of a company's assets which are financed
through debt. The company's figure is 0.74 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 Downtrend
Times Interest Earned Stable
ACTIVITY :
EXCELLENT
ACTIVITY RATIO
|
Fixed Assets Turnover |
212.86 |
Impressive |
Industrial
Average |
- |
|
Total Assets Turnover |
1.49 |
Impressive |
Industrial
Average |
0.42 |
|
Inventory Conversion Period |
181.62 |
|
|
|
|
Inventory Turnover |
2.01 |
Impressive |
Industrial
Average |
1.75 |
|
Receivables Conversion Period |
71.26 |
|
|
|
|
Receivables Turnover |
5.12 |
Impressive |
Industrial
Average |
2.23 |
|
Payables Conversion Period |
112.61 |
|
|
|
The company's Account Receivable Ratio is calculated as 5.12 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 132 days at the
end of 2012 to 182 days at the end of 2013. This represents a negative trend.
And Inventory turnover has decreased from 2.77 times in year 2012 to 2.01 times
in year 2013.
The company's Total Asset Turnover is calculated as 1.49 times and 2.01
times in 2013 and 2012 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 Uptrend
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.64.05 |
|
|
1 |
Rs.99.04 |
|
Euro |
1 |
Rs.71.76 |
INFORMATION DETAILS
|
Analysis Done by
: |
RAS |
|
|
|
|
Report Prepared
by : |
ANK |
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.