MIRA
INFORM REPORT
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Report Date : |
22.02.2012 |
IDENTIFICATION DETAILS
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Name : |
NANHAI ARTS AND CRAFTS I/E CO. LTD OF GUANGDONG |
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Registered Office : |
No. 26, 3rd South Guicheng Road, Nanhai District, Foshan
City, Guangdong Province 528200 Pr |
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Country : |
China |
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Financials (as on) : |
31.12.2009 |
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Date of Incorporation : |
15.11.1985 |
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Com. Reg. No.: |
4406822005006 |
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Legal Form : |
Limited Liabilities Company |
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Line of Business : |
International Trade mainly include gold, silver jewelry, clock,
watches, furniture, lighting, etc. |
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No. of Employees : |
47 |
RATING & COMMENTS
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MIRA’s Rating : |
B |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
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Status : |
Moderate |
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Payment Behaviour : |
No Complaints |
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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 – September 30, 2011
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Country Name |
Previous Rating (30.06.2011) |
Current Rating (30.09.2011) |
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China |
A2 |
A2 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
Company name and address
NANHAI ARTS AND CRAFTS I/E CO. LTD OF GUANGDONG
No. 26, 3RD
South Guicheng Road, Nanhai District, Foshan City, Guangdong Province 528200 PR
CHINA
TEL: 86 (0)
757-86338620/86229191 FAX: 86 (0)
757-86220225
EXECUTIVE SUMMARY
INCORPORATION DATE : NOV. 15, 1985
REGISTRATION NO. : 4406822005006
REGISTERED LEGAL FORM : LIMITED LIABILITIES CO.
STAFF STRENGTH :
47
REGISTERED CAPITAL : CNY 2,123,000
BUSINESS LINE :
TRADING
TURNOVER :
CNY 899,370,000 (AS OF DEC. 31,
2009)
EQUITIES :
CNY 5,440,000 (AS OF DEC. 31, 2009)
PAYMENT :
AVERAGE
RECOMM. CREDIT RANGE : UP TO
USD 40,000
MARKET CONDITION : COMPETITIVE
FINANCIAL CONDITION :
FAIRLY STABLE
OPERATIONAL TREND : STEADY
GENERAL REPUTATION : WELL-KNOWN
EXCHANGE RATE :
CNY6.30= USD 1
Adopted abbreviations:
ANS - amount not stated
NS - not stated
SC - subject company (the company inquired by you)
NA - not available
CNY - China Yuan Renminbi
SC was registered as a Limited liabilities co. at local
Administration for Industry & Commerce (AIC - The official body of issuing
and renewing business license).
Company Status: Limited liabilities co. This form of business in PR China
is defined as a legal person. No more than fifty shareholders contribute its registered
capital jointly. Shareholders bear limited liability to the extent of
shareholding, and the co. is liable for its debts only to extent of its
total assets. The characteristics of this form of co. are as follows: Upon the establishment of the
co., an investment certificate is issued to the each of shareholders. The board of directors is
comprised of three to thirteen members. The minimum registered capital
for a co. is CNY 30,000. Shareholders may take their
capital contributions in cash or by means of tangible assets or intangible
assets such as industrial property and non-patented technology. Cash contributed by all
shareholders must account for at least 30% of the registered capital. Existing shareholders have
pre-exemption right to purchase shares of the co. offered for sale by the
other shareholders and to subscribe for the newly increased registered
capital of the co.
SC’s
registered business scope includes importing and exporting commodities and
technologies; processing with imported materials, processing with imported
samples, assembling with imported parts, and compensation trade in agreement; counter trade & transit trade.
SC is mainly
engaged in international trade.
Mr. Liang
Chuwen is legal representative and
chairman of SC at present.
SC is known to
have approx. 47 employees at present.
SC is currently operating at the above stated address, and this address
houses its operating office in the commercial zone of Foshan. Our checks reveal
that SC owns the total premise, but SC’s accountant refused to release the
gross area.
http://www.gdnhac.com/ The design is professional and the content is
well organized. At present the web site is in Chinese and English versions.
E-mail: nhac@pub.nanhai.net.cn
*To what extent is
your company affected by the current Credit Crisis?
SC’s accountant Mr. Li refused to make any comments.
No significant events or changes were found during our checks with the
local Administration for Industry and Commerce.
MAIN SHAREHOLDERS:
Name
% of Shareholding
Liang Chuwen 7
Lv Xuexia 6.2
Guan Fuhong 6.2
Yuan Jinhan 6.2
Liu Rencheng 6.2
Other 36 individual shareholders 68.2
l
Legal representative and chairman:
Mr. Liang Chuwen , with university education. He is currently
responsible for the overall management of SC.
Working Experience(s):
At present Working
in SC as legal representative and chairman.
SC is mainly
engaged in international trade.
SC’s products mainly
include gold, silver jewelry, clock, watches, furniture, lighting, etc.
SC sources its
materials 80% from domestic market and 20% from overseas market. SC sells 50%
in domestic market and 50% to overseas market.
The buying terms of SC include Check, T/T, L/C and Credit of 30-60 days.
The payment terms of SC include Check, T/T, L/C and Credit of 30-60 days.
SC is not known to have the subsidiary at present.
Overall payment appraisal:
( ) Excellent (
) Good (X) Average (
) Fair ( ) Poor
( ) Not yet determined
The appraisal serves as a reference to reveal SC's payments habits and
ability to pay. It is based on the 3
weighed factors: Trade payment
experience (through current enquiry with SC's suppliers), our delinquent
payment and our debt collection record concerning SC.
Trade payment experience: SC did not
provide any name of trade/service suppliers and we have no other sources to
conduct the enquiry at present.
Delinquent
payment record: None in our database.
Debt collection record: No overdue amount owed
by SC was placed to us for collection within the last 6 years.
SC’s accountant
refused to release the banking information.
Balance Sheet
Unit: CNY’000
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As
of Dec. 31, 2009 |
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Cash & bank |
19,910 |
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Inventory |
80 |
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Accounts
receivable |
18,150 |
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Advances to
suppliers |
0 |
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Other
receivables |
0 |
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Other current
assets |
10 |
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------------------ |
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Current assets |
38,150 |
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Fixed assets net
value |
1,350 |
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Long term investment |
0 |
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Projects under
construction |
0 |
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Intangible and
other assets |
1,510 |
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------------------ |
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Total assets |
41,010 |
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=========== |
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Short loan |
5,000 |
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Accounts payable |
0 |
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Advances from
clients |
21,410 |
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Welfare payable |
0 |
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Withdraw the
expenses in advance |
0 |
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Taxes payable |
240 |
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Other Accounts
payable |
8,910 |
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Other current
liabilities |
10 |
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------------------ |
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Current
liabilities |
35,570 |
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Long term
liabilities |
0 |
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------------------ |
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Total liabilities |
35,570 |
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Equities |
5,440 |
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------------------ |
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Total
liabilities & equities |
41,010 |
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=========== |
Income Statement
Unit: CNY’000
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As
of Dec. 31, 2009 |
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Turnover |
899,370 |
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Cost of goods sold |
885,640 |
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Sales expense |
5,850 |
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Management expense |
5,600 |
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Finance expense |
960 |
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Profit before tax |
1,780 |
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Less: profit tax |
450 |
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Profits |
1,330 |
Note: SC’s latest financial is not available now. SC’s management
declined to release the breakdown of its short loans.
Important
Ratios
=============
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As
of Dec. 31, 2009 |
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*Current ratio |
1.07 |
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*Quick ratio |
1.07 |
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*Liabilities
to assets |
0.87 |
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*Net profit
margin (%) |
0.15 |
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*Return on
total assets (%) |
3.24 |
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*Inventory
/Turnover ×365 |
1 day |
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*Accounts
receivable/Turnover ×365 |
7 days |
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*Turnover/Total
assets |
21.93 |
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* Cost of
goods sold/Turnover |
0.98 |
PROFITABILITY:
AVERAGE
l
The turnover of SC appears fairly good.
l
SC’s net profit margin is average.
l
SC’s return on total assets is average.
l
SC’s cost of goods sold is high, comparing with its
turnover.
LIQUIDITY: AVERAGE
l
The current ratio of SC is maintained in a normal
level.
l
SC’s quick ratio is maintained in a normal level.
l
The inventory of SC appears average.
l
The accounts receivable of SC appears average.
l
The short-term loan of SC appears average.
l
SC’s turnover is in a good level, comparing with
the size of its total assets.
LEVERAGE: FAIR
l
The debt ratio of SC is high.
l
The risk for SC to go bankrupt is average.
Overall financial
condition of the SC: Fairly stable.
SC is considered medium-sized in its line with fairly stable financial
conditions. A credit line up to USD 40,000 would appear to be within SC’s
capacities.
DIAMOND INDUSTRY –
INDIA
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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.
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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.
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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.
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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.
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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.
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The diamond jewellery industry in India today may be
more than Rs 60000 mil and is rated amongst the fastest growing in the
world. Indi ranks third in the world in domestic diamond consumption.
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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.
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Excerpts from Times of India dated 30th
October 2010 is as under –
DIAMOND
SAGA – DIRTY DOZEN STUCK WITH 2K CR DEBT
This could be the biggest credibility crisis
the Indian diamond industry has ever faced. Fifteen banks run the risk of
losing Rs 2000 crore lent to a dozen diamond firms in Surat. Until about two
months ago, they had not repaid these dues. Bankers believe many
diamantaires borrowed money during the economic downturn two years ago and
diverted funds to businesses like real estate and capital markets. Many of
themselves made money from these businesses but their diamond companies have
gone sick and declared insolvency.
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Most of the money borrowed from the banks in the name
of their diamond business has been diverted in real estate and the share
market. The banks are not in a position to seize their properties because in
many cases, these were purchased in the name of their relatives and friends.
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
Rs.49.08 |
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|
1 |
Rs.77.80 |
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Euro |
1 |
Rs.65.17 |
RATING EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
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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 |
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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 |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
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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 |
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<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
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-- |
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.