MIRA INFORM REPORT

 

 

Report No. :

322551

Report Date :

19.05.2015

 

IDENTIFICATION DETAILS

 

Name :

4'C DIAMONDS PTE LTD

 

 

Registered Office :

17, Phillip Street, 05-01, Grand Building, 048695

 

 

Country :

Singapore

 

 

Financials (as on) :

31.12.2012

 

 

Date of Incorporation :

25.10.1997

 

 

Com. Reg. No.:

199707403-N

 

 

Legal Form :

Exempt Private

 

 

Line of Business :

Subject is engaged in the trading of diamonds.

 

 

No. of Employees :

Not Available

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ca

 

RATING

STATUS

PROPOSED CREDIT LINE

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

 

 

Status :

Moderate

Payment Behaviour :

Unknown

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)

Singapore

A1

A1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

 

SINGAPORE - ECONOMIC OVERVIEW

 

Singapore has a highly developed and successful free-market economy. It enjoys a remarkably open and corruption-free environment, stable prices, and a per capita GDP higher than that of most developed countries. Unemployment is very low. The economy depends heavily on exports, particularly in consumer electronics, information technology products, pharmaceuticals, and on a growing financial services sector. The economy contracted 0.6% in 2009 as a result of the global financial crisis, but rebounded 15.1% in 2010, on the strength of renewed exports. Growth in 2014 was slower at 13.9%, largely a result of soft demand for exports during the second European recession. Over the longer term, the government hopes to establish a new growth path that focuses on raising productivity. Singapore has attracted major investments in pharmaceuticals and medical technology production and will continue efforts to establish Singapore as Southeast Asia's financial and high-tech hub. Singapore is a member of the 12-nation Trans-Pacific Partnership free trade agreement negotiations and, with the nine other ASEAN members, will form the ASEAN Economic Community in 2015.

 

Source : CIA

 


 

EXECUTIVE SUMMARY

 

REGISTRATION NO.

:

199707403-N

COMPANY NAME

:

4'C DIAMONDS PTE LTD

FORMER NAME

:

N/A

INCORPORATION DATE

:

25/10/1997

COMPANY STATUS

:

EXIST

LEGAL FORM

:

EXEMPT PRIVATE

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

17, PHILLIP STREET, 05-01, GRAND BUILDING, 048695, SINGAPORE.

BUSINESS ADDRESS

:

17, PHILLIP STREET, 05-01, GRAND BUILDING, 048695, SINGAPORE.

TEL.NO.

:

65-65333377

FAX.NO.

:

65-65333227

CONTACT PERSON

:

SHAH PARAG SHASHIKANT ( DIRECTOR )

PRINCIPAL ACTIVITY

:

TRADING OF DIAMONDS

ISSUED AND PAID UP CAPITAL

:

1,000,000.00 ORDINARY SHARE, OF A VALUE OF SGD 1,000,000.00 

SALES

:

SGD 5,311,941 [2012]

NET WORTH

:

SGD 1,995,077 [2012]

STAFF STRENGTH

:

N/A

BANKER (S)

:

MALAYAN BANKING BHD

LITIGATION

:

CLEAR

FINANCIAL CONDITION

:

N/A

PAYMENT

:

POOR

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

N/A

CURRENCY EXPOSURE

:

N/A

GENERAL REPUTATION

:

SATISFACTORY

INDUSTRY OUTLOOK

:

AVERAGE GROWTH

 

HISTORY / BACKGROUND

 

The Subject is an exempt private company whose shares are not held by any corporate body and has no more than 20 shareholders who are all natural persons. An exempt company is a type of private limited company. A private limited company is a separate legal entity from its shareholders. As a separate legal entity, the Subject is capable of owning assets, entering into contracts, suing or be sued by other companies. An exempt private company with an annual turnover of less than SGD5 million are exempted from statutory auditing requirements. Instead of filing audited annual accounts, the Subject has to file in a document duly signed by its director in charge of its finance and the company secretary stating that the Subject is able to meet all its obligations as and when they fall due. The Subject is not required to have their accounts audited. However, the Subject will prepare unaudited accounts for purposes of AGMs and filing with Registry Office if it is unable to meet all its obligations as and when they fall due .

 

The Subject is principally engaged in the (as a / as an) trading of diamonds.

 

Share Capital History

Date

Issue & Paid Up Capital

18/05/2015

SGD 1,000,000.00

 

The major shareholder(s) of the Subject are shown as follows :


Name

Address

IC/PP/Loc No

Shareholding

(%)

SHAH PARAG SHASHIKANT +

102, HAIG ROAD, 10-07, DUNMAN VIEW, 438798, SINGAPORE.

S7582329J

500,000.00

50.00

SHETH AMISHKUMAR RAMNIKLAL +

FLAT A 8/F HANG WAN BUILDING, 42-44, GRANVILLE ROAD, TSIMSHATSUI, KOWLOON, HONG KONG.

F3812291

500,000.00

50.00

---------------

------

1,000,000.00

100.00

============

=====

 

+ Also Director

 





DIRECTORS



DIRECTOR 1

 

Name Of Subject

:

SHAH PARAG SHASHIKANT

Address

:

102, HAIG ROAD, 10-07, DUNMAN VIEW, 438798, SINGAPORE.

IC / PP No

:

S7582329J

Nationality

:

SINGAPOREAN

Date of Appointment

:

25/10/1997

 

DIRECTOR 2

 

Name Of Subject

:

SHETH AMISHKUMAR RAMNIKLAL

Address

:

FLAT A 8/F HANG WAN BUILDING, 42-44, GRANVILLE ROAD, TSIMSHATSUI, KOWLOON, HONG KONG.

IC / PP No

:

F3812291

Nationality

:

INDIAN

Date of Appointment

:

03/04/1998

 

MANAGEMENT

 

 

1)

Name of Subject

:

SHAH PARAG SHASHIKANT

Position

:

DIRECTOR

 

AUDITOR

 

Auditor

:

PRUDENTIAL PUBLIC ACCOUNTING CORPORATION

Auditor' Address

:

N/A

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

SHAH SWATI PARAG

IC / PP No

:

S7780433A

Address

:

102, HAIG ROAD, 10-07, DUNMAN VIEW, 438798, SINGAPORE.

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

MALAYAN BANKING BHD

 

 

ENCUMBRANCE (S)

 

Charge No

Creation Date

Charge Description

Chargee Name

Total Charge

Status

C201202732

12/03/2012

N/A

MALAYAN BANKING BERHAD

-

Unsatisfied

 

LITIGATION CHECK AGAINST SUBJECT


* A check has been conducted in our databank againt the Subject whether the subject has been involved in any litigation.

No legal action was found in our databank.

No winding up petition was found in our databank.

PAYMENT RECORD

 

SOURCES OF RAW MATERIALS:

Local

:

N/A

Overseas

:

N/A


The staff from the registered office refused to disclose the Subject's suppliers. 

OVERALL PAYMENT HABIT

Prompt 0-30 Days

[

]

Good 31-60 Days

[

]

Average 61-90 Days

[

]

Fair 91-120 Days

[

]

Poor >120 Days

[

X

]

 

CLIENTELE

 

Local

:

N/A

Overseas

:

N/A


The staff from the registered office refused to disclose the Subject's clientele. 

 

OPERATIONS

 

Goods Traded

:

DIAMONDS

 

Branch

:

NO

Other Information:


The Subject is principally engaged in the (as a / as an) trading of diamonds. 

The staff from the registered office refused to disclose the Subject's operation. 


CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client

:

N/A

Current Telephone Number

:

65-65333377

Match

:

N/A

Address Provided by Client

:

180, PAYA LEBAR RD, 06-03, YI GUANG FACTORY BLG SINGAPORE

Current Address

:

17, PHILLIP STREET, 05-01, GRAND BUILDING, 048695, SINGAPORE.

Match

:

NO


We have contacted the Subject's Accountant and its Company Secretary for the latest financial accounts. However they have rejected our request in view of the confidentiality of the documents.

 

Other Investigations


We contacted one of the staff from the Subject's registered office but she only provided limited information on the Subject.

She also refused to disclose the number of employees.

The contact number we found for the address provided at 65-67439030 is not answered.


FINANCIAL ANALYSIS

 

The Subject's latest financial accounts are up to 2012 which is out dated in our opinion. Therefore, our comment on the Subject financial performance is restricted thereto.

Overall financial condition of the Subject : N/A

 

SINGAPORE ECONOMIC / INDUSTRY OUTLOOK

 

Major Economic Indicators :

2009

2010

2011

2012

2013

 

Population (Million)

4.98

5.08

5.18

5.31

5.40

Gross Domestic Products ( % )

(0.8)

14.5

4.9

1.3

3.7

Consumer Price Index

0.6

2.8

5.2

4.6

2.4

Total Imports (Million)

356,299.3

423,221.8

459,655.1

474,554.0

466,762.0

Total Exports (Million)

391,118.1

478,840.7

514,741.2

510,329.0

513,391.0

 

Unemployment Rate (%)

3.2

2.2

2.1

2.0

1.9

Tourist Arrival (Million)

9.68

11.64

13.17

14.49

15.46

Hotel Occupancy Rate (%)

75.8

85.6

86.5

86.4

86.3

Cellular Phone Subscriber (Million)

1.37

1.43

1.50

1.52

1.97

 

Registration of New Companies (No.)

26,414

29,798

32,317

31,892

37,288

Registration of New Companies (%)

4.3

12.8

8.5

(1.3)

9.8

Liquidation of Companies (No.)

22,393

15,126

19,005

17,218

17,369

Liquidation of Companies (%)

113.4

(32.5)

25.6

9.4

(5.3)

 

Registration of New Businesses (No.)

26,876

23,978

23,494

24,788

22,893

Registration of New Businesses (%)

8.15

(10.78)

2.02

5.51

1.70

Liquidation of Businesses (No.)

23,552

24,211

23,005

22,489

22,598

Liquidation of Businesses (%)

11.4

2.8

(5)

(2.2)

0.5

 

Bankruptcy Orders (No.)

2,058

1,537

1,527

1,748

1,992

Bankruptcy Orders (%)

(11.5)

(25.3)

(0.7)

14.5

14.0

Bankruptcy Discharges (No.)

3,056

2,252

1,391

1,881

2,584

Bankruptcy Discharges (%)

103.7

(26.3)

(38.2)

35.2

37.4

 

INDUSTRIES ( % of Growth ) :

Agriculture

Production of Principal Crops

3.25

(0.48)

4.25

3.64

-

Fish Supply & Wholesale

(1.93)

(10.5)

12.10

(0.5)

-

 

Manufacturing *

71.5

92.8

100.0

100.3

102.0

Food, Beverages & Tobacco

90.4

96.4

100.0

103.5

103.5

Textiles

145.9

122.1

100.0

104.0

87.1

Wearing Apparel

211.0

123.3

100.0

92.1

77.8

Leather Products & Footwear

79.5

81.8

100.0

98.6

109.8

Wood & Wood Products

101.4

104.0

100.0

95.5

107.4

Paper & Paper Products

95.4

106.1

100.0

97.4

103.2

Printing & Media

100.9

103.5

100.0

93.0

86.1

Crude Oil Refineries

96.4

95.6

100.0

99.4

93.5

Chemical & Chemical Products

80.3

97.6

100.0

100.5

104.1

Pharmaceutical Products

49.1

75.3

100.0

109.7

107.2

Rubber & Plastic Products

101.2

112.3

100.0

96.5

92.9

Non-metallic Mineral

91.9

92.5

100.0

98.2

97.6

Basic Metals

92.6

102.2

100.0

90.6

76.5

Fabricated Metal Products

90.8

103.6

100.0

104.3

105.1

Machinery & Equipment

57.3

78.5

100.0

112.9

114.5

Electrical Machinery

86.8

124.1

100.0

99.3

108.5

Electronic Components

85.2

113.6

100.0

90.6

94.3

Transport Equipment

96.0

94.0

100.0

106.3

107.5

 

Construction

(36.9)

14.20

20.50

28.70

-

Real Estate

1.4

21.3

25.4

31.9

-

 

Services

Electricity, Gas & Water

1.70

4.00

7.00

6.30

-

Transport, Storage & Communication

3.90

12.80

7.40

5.30

-

Finance & Insurance

(16.4)

(0.4)

8.90

0.50

-

Government Services

4.50

9.70

6.90

6.00

-

Education Services

0.10

(0.9)

(1.4)

0.30

-

 

* Based on Index of Industrial Production (2011 = 100)



INDUSTRY ANALYSIS

 

INDUSTRY :

TRADING

The wholesale and retail trade sectors have expanded by 2.0% in the third quarter of 2014, extending the 1.8 per cent growth in the previous quarter. In 2013, the wholesale and retail sector expanded by 5.0%, after declining by 1.4% the year before. Growth of the sector was driven by the wholesale trade segment.

The domestic wholesale trade index has increased by 3.2% in the fourth quarter of 2013, moderating from the 6.6% growth in the previous quarter. The slower growth was due to a decline in the sales of furniture and household equipment (-12%) and petroleum and petroleum products (-0.6%). For the full year, the domestic wholesale trade index grew by 5.2% reversing the 2.2% decline in 2012. On the other hand, the foreign wholesale trade index has increased by a slower pace of 5.6% in the fourth quarter, compared to the 7.7% expansion in the preceding quarter. The slowdown was due to a fall in the sales of telecommunication equipment and computer (-3.8%) and petroleum and petroleum products (-2.5%). For the full year, the growth of the foreign wholesale trade index moderated slightly to 8.6% from 9.1% in the previous year.

In the fourth quarter of 2013, retail sales volume fell by 6.2%, extending the 5.6% decline in the previous quarter. Excluding motor vehicles, retail sales volume increased by 0.4%, a slower pace of expansion as compared to the 1.6% gain in the preceding quarter. The sales volume of motor vehicles fell by 33% in the fourth quarter of 2013, extending the 32% decline in the previous quarter. Meanwhile, the sales of several discretionary items also fell in the fourth quarter of 2013. For instance, the sales of telecommunications apparatus and computers fell by 12%, while the sales of furniture and household equipment declined by 5.4%.

For the full year, retail sales volume contracted by 4.3%, a reversal from the 1.3% expansion in 2012. Excluding motor vehicle sales, the retail sales volume grew by 1.1% in 2013, slower than the 1.7% increase in 2012. Watches and jewellery recorded the largest increase (11%) in sales in 2013, followed by optical goods and book (3%) and medical goods and toiletries (3%). By contrast, the sales of telecommunications apparatus and computer (-7.3%), furniture and household equipment (-4.2%) and petrol service stations (-1.4) declined in 2013.

OVERALL INDUSTRY OUTLOOK : AVERAGE GROWTH



CREDIT RISK EVALUATION & RECOMMENDATION

 


Incorporated in 1997, the Subject is an Exempt Private company, focusing on trading of diamonds. Having been in the industry for over a decade, the Subject has achieved a certain market share and has built up a satisfactory reputation in the market. It should have received supports from its regular customers. A paid up capital of SGD 1,000,000 allows the Subject to expand its business more comfortably. However, the Subject does not have strong shareholders’ backing. Without a strong shareholders' backing, the opportunity of the Subject to expand its business is limited. 

Overall, we regard that the Subject's management capability is average. This indicates that the Subject has greater potential to improve its business performance and raising income for the Subject. 

The Subject's business performance showed a reverse trend as both its turnover and pre-tax profit have decreased compared to the previous year. The Subject has generated an unfavourable return on shareholders' funds indicating that the management was inefficient in utilising its funds to generate return. The Subject is in good liquidity position with its current liabilities well covered by it current assets. Hence, it has sufficient working capital to meet its short term financial obligations. Being a lowly geared company, the Subject is exposed to low financial risk as it is mainly dependent on its internal funds to finance its business needs. Given a positive net worth standing at SGD 1,995,077, the Subject should be able to maintain its business in the near terms. 

The poor payment habit may affect the goodwill between the Subject and its suppliers and the Subject may inadvertently have to pay more for its future supplies. 

The industry shows an upward trend and this trend is very likely to sustain in the near terms. 

In view of the above, we only recommend credit be proceeded to the Subject with guarantee.

 




 

PROFIT AND LOSS ACCOUNT

 

THE FINANCIAL STATEMENTS WERE PREPARED IN ACCORDANCE WITH SINGAPORE FINANCIAL REPORTING STANDARDS.

4'C DIAMONDS PTE LTD

 

Financial Year End

2012-12-31

2011-12-31

2010-12-31

2009-12-31

Months

12

12

12

12

Consolidated Account

Company

Company

Company

Company

Audited Account

YES

YES

YES

YES

Unqualified Auditor's Report (Clean Opinion)

YES

YES

YES

YES

Financial Type

FULL

FULL

SUMMARY

SUMMARY

Currency

SGD

SGD

SGD

SGD

TURNOVER

5,311,941

7,244,061

6,190,036

5,024,625

Other Income

12,607

7,909

-

-

----------------

----------------

----------------

----------------

Total Turnover

5,324,548

7,251,970

6,190,036

5,024,625

Costs of Goods Sold

(4,922,014)

(6,824,641)

-

-

----------------

----------------

----------------

----------------

Gross Profit

402,534

427,329

-

-

----------------

----------------

----------------

----------------

PROFIT/(LOSS) FROM OPERATIONS

83,811

93,692

85,529

99,012

----------------

----------------

----------------

----------------

PROFIT/(LOSS) BEFORE TAXATION

83,811

93,692

85,529

99,012

Taxation

(7,699)

(9,390)

(7,527)

(8,439)

----------------

----------------

----------------

----------------

PROFIT/(LOSS) AFTER TAXATION

76,112

84,302

78,002

90,573

----------------

----------------

----------------

----------------

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

As previously reported

918,965

834,663

756,661

666,088

----------------

----------------

----------------

----------------

As restated

918,965

834,663

756,661

666,088

----------------

----------------

----------------

----------------

PROFIT AVAILABLE FOR APPROPRIATIONS

995,077

918,965

834,663

756,661

----------------

----------------

----------------

----------------

RETAINED PROFIT/(LOSS) CARRIED FORWARD

995,077

918,965

834,663

756,661

=============

=============

=============

=============

INTEREST EXPENSE (as per notes to P&L)

Bank overdraft

-

5,847

-

-

Term loan / Borrowing

10,480

25,394

-

-

----------------

----------------

----------------

----------------

10,480

31,241

-

-

=============

=============

-

-

 

BALANCE SHEET

 

4'C DIAMONDS PTE LTD

 

ASSETS EMPLOYED:

FIXED ASSETS

985,815

1,008,343

1,033,517

1,051,537

Others

15,493

15,493

-

-

----------------

----------------

----------------

----------------

TOTAL INTANGIBLE ASSETS

15,493

15,493

-

-

----------------

----------------

----------------

----------------

TOTAL LONG TERM ASSETS

1,001,308

1,023,836

1,033,517

1,051,537

Stocks

1,166,109

1,218,502

-

-

Trade debtors

2,527,614

3,156,776

-

-

Other debtors, deposits & prepayments

3,580

4,932

-

-

Short term deposits

-

50,640

-

-

Amount due from related companies

203,104

224,219

-

-

Cash & bank balances

139,986

138,020

-

-

Others

-

29,511

-

-

----------------

----------------

----------------

----------------

TOTAL CURRENT ASSETS

4,040,393

4,822,600

4,806,999

3,977,458

----------------

----------------

----------------

----------------

TOTAL ASSET

5,041,701

5,846,436

5,840,516

5,028,995

=============

=============

=============

=============

CURRENT LIABILITIES

Trade creditors

1,432,768

2,294,976

-

-

Other creditors & accruals

61,574

4,912

-

-

Short term borrowings/Term loans

19,082

17,901

-

-

Amounts owing to related companies

479,051

495,748

-

-

Amounts owing to director

430,893

469,094

-

-

Provision for taxation

7,709

8,065

-

-

Other liabilities

8,936

-

-

-

----------------

----------------

----------------

----------------

TOTAL CURRENT LIABILITIES

2,440,013

3,290,696

3,350,418

2,598,552

----------------

----------------

----------------

----------------

NET CURRENT ASSETS/(LIABILITIES)

1,600,380

1,531,904

1,456,581

1,378,906

----------------

----------------

----------------

----------------

TOTAL NET ASSETS

2,601,688

2,555,740

2,490,098

2,430,443

=============

=============

=============

=============

SHARE CAPITAL

Ordinary share capital

1,000,000

1,000,000

1,000,000

1,000,000

----------------

----------------

----------------

----------------

TOTAL SHARE CAPITAL

1,000,000

1,000,000

1,000,000

1,000,000

Retained profit/(loss) carried forward

995,077

918,965

834,663

756,661

Others

-

-

0

0

----------------

----------------

----------------

----------------

TOTAL RESERVES

995,077

918,965

834,663

756,661

----------------

----------------

----------------

----------------

SHAREHOLDERS' FUNDS/EQUITY

1,995,077

1,918,965

1,834,663

1,756,661

Long term loans

606,611

636,775

-

-

----------------

----------------

----------------

----------------

TOTAL LONG TERM LIABILITIES

606,611

636,775

655,435

673,782

----------------

----------------

----------------

----------------

2,601,688

2,555,740

2,490,098

2,430,443

=============

=============

=============

=============

 

FINANCIAL RATIO

 

4'C DIAMONDS PTE LTD

 

TYPES OF FUNDS

Cash

139,986

188,660

-

-

Net Liquid Funds

139,986

188,660

-

-

Net Liquid Assets

434,271

313,402

1,456,581

1,378,906

Net Current Assets/(Liabilities)

1,600,380

1,531,904

1,456,581

1,378,906

Net Tangible Assets

2,586,195

2,540,247

2,490,098

2,430,443

Net Monetary Assets

(172,340)

(323,373)

801,146

705,124

BALANCE SHEET ITEMS

Total Borrowings

625,693

654,676

-

-

Total Liabilities

3,046,624

3,927,471

4,005,853

3,272,334

Total Assets

5,041,701

5,846,436

5,840,516

5,028,995

Net Assets

2,601,688

2,555,740

2,490,098

2,430,443

Net Assets Backing

1,995,077

1,918,965

1,834,663

1,756,661

Shareholders' Funds

1,995,077

1,918,965

1,834,663

1,756,661

Total Share Capital

1,000,000

1,000,000

1,000,000

1,000,000

Total Reserves

995,077

918,965

834,663

756,661

LIQUIDITY (Times)

Cash Ratio

0.06

0.06

-

-

Liquid Ratio

1.18

1.10

-

-

Current Ratio

1.66

1.47

1.43

1.53

WORKING CAPITAL CONTROL (Days)

Stock Ratio

80

61

-

-

Debtors Ratio

174

159

-

-

Creditors Ratio

106

123

-

-

SOLVENCY RATIOS (Times)

Gearing Ratio

0.31

0.34

-

-

Liabilities Ratio

1.53

2.05

2.18

1.86

Times Interest Earned Ratio

9.00

4.00

-

-

Assets Backing Ratio

2.59

2.54

2.49

2.43

PERFORMANCE RATIO (%)

Operating Profit Margin

1.58

1.29

1.38

1.97

Net Profit Margin

1.43

1.16

1.26

1.80

Return On Net Assets

3.62

4.89

3.43

4.07

Return On Capital Employed

3.60

4.86

3.43

4.07

Return On Shareholders' Funds/Equity

3.81

4.39

4.25

5.16

Dividend Pay Out Ratio (Times)

0.00

0.00

-

-

NOTES TO ACCOUNTS

Contingent Liabilities

0

0




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.63.55

UK Pound

1

Rs.99.86

Euro

1

Rs.72.67

 

 

INFORMATION DETAILS

 

Analysis Done by :

DIV

 

 

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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