MIRA INFORM REPORT
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Report Date : |
17.08.2013 |
IDENTIFICATION DETAILS
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Name : |
SHANGHAI MINGYA JEWELRY CO. LIMITED |
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Registered Office : |
Rm. B708b, South Tower Of China Diamond Exchange Center, No. 1701, Century Avenue, Pudong New District, Shanghai, 200120 PR |
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Country : |
China |
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Financials (as on) : |
31.12.2012 |
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Date of Incorporation : |
28.07.2009 |
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Com. Reg. No.: |
310115001142422 |
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Legal Form : |
Limited Liabilities Company |
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Line of Business : |
Subject is engaged in selling imported Jewellery. |
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No. of Employees : |
11 |
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 : |
Small vompany |
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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 31st, 2013
|
Country Name |
Previous Rating (31.12.2012) |
Current Rating (31.03.2013) |
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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 |
CHINA - ECONOMIC OVERVIEW
Since the late 1970s China has moved from a closed, centrally planned system to a more market-oriented one that plays a major global role - in 2010 China became the world's largest exporter. Reforms began with the phasing out of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, creation of a diversified banking system, development of stock markets, rapid growth of the private sector, and opening to foreign trade and investment. China has implemented reforms in a gradualist fashion. In recent years, China has renewed its support for state-owned enterprises in sectors it considers important to "economic security," explicitly looking to foster globally competitive national champions. After keeping its currency tightly linked to the US dollar for years, in July 2005 China revalued its currency by 2.1% against the US dollar and moved to an exchange rate system that references a basket of currencies. From mid 2005 to late 2008 cumulative appreciation of the renminbi against the US dollar was more than 20%, but the exchange rate remained virtually pegged to the dollar from the onset of the global financial crisis until June 2010, when Beijing allowed resumption of a gradual appreciation. The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, China in 2012 stood as the second-largest economy in the world after the US, having surpassed Japan in 2001. The dollar values of China's agricultural and industrial output each exceed those of the US; China is second to the US in the value of services it produces. Still, per capita income is below the world average. The Chinese government faces numerous economic challenges, including: (a) reducing its high domestic savings rate and correspondingly low domestic demand; (b) sustaining adequate job growth for tens of millions of migrants and new entrants to the work force; (c) reducing corruption and other economic crimes; and (d) containing environmental damage and social strife related to the economy's rapid transformation. Economic development has progressed further in coastal provinces than in the interior, and by 2011 more than 250 million migrant workers and their dependents had relocated to urban areas to find work. One consequence of population control policy is that China is now one of the most rapidly aging countries in the world. Deterioration in the environment - notably air pollution, soil erosion, and the steady fall of the water table, especially in the North - is another long-term problem. China continues to lose arable land because of erosion and economic development. The Chinese government is seeking to add energy production capacity from sources other than coal and oil, focusing on nuclear and alternative energy development. In 2010-11, China faced high inflation resulting largely from its credit-fueled stimulus program. Some tightening measures appear to have controlled inflation, but GDP growth consequently slowed to under 8% for 2012. An economic slowdown in Europe contributed to China's, and is expected to further drag Chinese growth in 2013. Debt overhang from the stimulus program, particularly among local governments, and a property price bubble challenge policy makers currently. The government's 12th Five-Year Plan, adopted in March 2011, emphasizes continued economic reforms and the need to increase domestic consumption in order to make the economy less dependent on exports in the future. However, China has made only marginal progress toward these rebalancing goals.
Source
: CIA
COMPANY NAME & ADDRESS
SHANGHAI MINGYA
JEWELRY CO., LTD.
RM. B708B, SOUTH
TOWER OF CHINA DIAMOND EXCHANGE CENTER,
NO. 1701, CENTURY
AVENUE,
PUDONG NEW DISTRICT,
SHANGHAI, 200120 PR CHINA
TEL: 86 (0)
21-33921137
FAX: 86 (0) 21-33921137
EXECUTIVE SUMMARY
INCORPORATION DATE : july 28, 2009
REGISTRATION NO. :
310115001142422
REGISTERED LEGAL FORM : LIMITED LIABILITIES COMPANY
STAFF STRENGTH : 11
REGISTERED CAPITAL :
CNY 1,000,000
BUSINESS LINE :
TRADING
TURNOVER :
CNY 83,330,000 (AS OF DEC. 31,
2012)
EQUITIES :
CNY 2,000,000 (AS OF DEC. 31, 2012)
PAYMENT :
AVERAGE
MARKET CONDITION : AVERAGE
FINANCIAL CONDITION : FAIRLY STABLE
OPERATIONAL TREND : FAIRLY STEADY
GENERAL REPUTATION : AVERAGE
EXCHANGE RATE :
CNY 6.12=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 Company at local
Administration for industry & commerce (AIC - the official body of issuing
and renewing business license) on July 28, 2009.
Company Status: Limited
Liability Company 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 processing and selling jewellery, arts & crafts; import and
export goods and technology.
SC is
mainly engaged in selling imported jewellery.
Ms.
Meng Biyang is the legal representative and chairman of SC at present.
SC is
known to have approx. 11 employees at present.
SC
is currently operating at the above stated address, and this address houses its
operating office in the commercial zone of Shanghai. The detailed premise
information is unknown.
SC is not known to host website of its own at present.
No significant events or changes were found during our checks with local
AIC.
For the past two years there is no record of litigation.
MAIN SHAREHOLDERS:
Name %
of Shareholding
Meng Biyang
39
He Yan
61
l
Legal representative, Chairman & General
Manager:
Ms. Meng Biyang, in her
Working Experience(s):
At present Working in SC as legal
representative, chairman and general manager
SC is
mainly engaged in selling imported jewellery.
SC’s products mainly include diamond, etc.
SC
sources its merchandise 100% from overseas market, mainly India. SC sells 100%
of its products in domestic market.
The buying terms of SC include Check, T/T, L/C, and Credit
of 30-60 days. The payment terms of SC include T/T, Check, and Credit of 30-60
days.
Note: SC declined to release its major
suppliers and clients.
SC
is not known to have any 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.
China
Construction Bank Shanghai Branch Pudong New District Sub-branch
AC#：31001520313050022403
Relationship:
Normal
Balance Sheet
Unit: CNY’000
|
|
As of Dec. 31,
2011 |
As of Dec. 31,
2012 |
|
Cash & bank |
1,780 |
560 |
|
Inventory |
7,890 |
1,300 |
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Bills receivable |
0 |
0 |
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Accounts
receivable |
19,110 |
17,090 |
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Advances to
suppliers |
20,220 |
0 |
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Other
receivables |
410 |
50 |
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Other current
assets |
20 |
50 |
|
|
------------------ |
------------------ |
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Current assets |
49,430 |
19,050 |
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Fixed assets net
value |
10 |
20 |
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Long term
investment |
800 |
0 |
|
Projects under
construction |
0 |
0 |
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Intangible and
other assets |
0 |
0 |
|
|
------------------ |
------------------ |
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Total assets |
50,240 |
19,070 |
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=========== |
=========== |
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Short loan |
0 |
0 |
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Accounts payable |
0 |
660 |
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Advances from
clients |
0 |
6,080 |
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Taxes payable |
-3,520 |
-3,680 |
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Other Accounts
payable |
51,950 |
14,010 |
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Other current
liabilities |
0 |
0 |
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------------------ |
------------------ |
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Current
liabilities |
48,430 |
17,070 |
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Long term
liabilities |
0 |
0 |
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------------------ |
------------------ |
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Total
liabilities |
48,430 |
17,070 |
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Equities |
1,810 |
2,000 |
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|
------------------ |
------------------ |
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Total
liabilities & equities |
50,240 |
19,070 |
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|
=========== |
=========== |
Income Statement
Unit: CNY’000
|
|
As of Dec. 31, 2011 |
As
of Dec. 31, 2012 |
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Turnover |
100,240 |
83,330 |
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Cost of goods sold |
113,430 |
91,080 |
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Sales expense |
0 |
0 |
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Management expense |
2,420 |
2,840 |
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Finance expense |
-850 |
-40 |
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Non-operating income |
15,770 |
10,980 |
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Non-operating expense |
0 |
0 |
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Profit before tax |
1,020 |
430 |
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Less: profit tax |
100 |
110 |
|
Profits |
920 |
320 |
Important Ratios
=============
|
|
As of Dec. 31, 2011 |
As of
Dec. 31, 2012 |
|
*Current ratio |
1.02 |
1.12 |
|
*Quick ratio |
0.86 |
1.04 |
|
*Liabilities
to assets |
0.96 |
0.90 |
|
*Net profit
margin (%) |
0.92 |
0.38 |
|
*Return on
total assets (%) |
1.83 |
1.68 |
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*Inventory
/Turnover ×365 |
29 days |
6 days |
|
*Accounts
receivable/Turnover ×365 |
70 days |
75 days |
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*Turnover/Total
assets |
2.00 |
4.37 |
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* Cost of
goods sold/Turnover |
1.13 |
1.09 |
PROFITABILITY: AVERAGE
l The turnover of SC
appears fairly good in its line in 2011, but it deceased in 2012.
l SC’s net profit
margin is average in both years.
l SC’s return on
total assets is average in both years.
l
SC’s cost of goods sold is too high, comparing with
its turnover in both years.
LIQUIDITY: AVERAGE
l
The current ratio of SC is maintained in a normal
level in both years.
l
SC’s quick ratio is maintained in a normal level in
both years.
l
The inventory of SC appears average in both years.
l
The accounts receivable of SC appears fairly large
in both years.
l
SC has no short-term loan in both years.
l
SC’s turnover is in an average level in 2011 and in
a fairly good level in 2012, comparing with the size of its total assets.
LEVERAGE: FAIR
l
The debt ratio of SC is high in both years.
l
The risk for SC to go bankrupt is average.
Overall financial condition of the SC: Fairly stable.
SC is considered small-sized in its line with fairly stable financial
conditions. The large amount of accounts receivable could be a threat to SC’s
financial condition.
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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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 –
-
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.
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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. 61.82 |
|
|
1 |
Rs. 96.57 |
|
Euro |
1 |
Rs. 82.45 |
INFORMATION DETAILS
|
Report
Prepared by : |
NIS |
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 |
|
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.