|
Report Date : |
23.08.2013 |
IDENTIFICATION DETAILS
|
Name : |
STS GEMS LTD. |
|
|
|
|
Registered Office : |
Unit 614, 6/F., Heng Ngai Jewellery Center, 4, Hok Yuen Street East, Hunghom, Kowloon, |
|
|
|
|
Country : |
Hong Kong |
|
|
|
|
Date of Incorporation : |
02.05.1986. |
|
|
|
|
Com. Reg. No.: |
10284458 |
|
|
|
|
Legal Form : |
Private Limited Company |
|
|
|
|
Line of Business : |
Trader of all kinds of diamonds and gemstones. |
|
|
|
|
No. of Employees : |
8. (Including associate) |
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 – March 31st, 2013
|
Country Name |
Previous Rating (31.12.2012) |
Current Rating (31.03.2013) |
|
Hong Kong |
A2 |
A2 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
Off-credit |
D |
HONG KONG - ECONOMIC OVERVIEW
Hong Kong has a free market economy, highly dependent on
international trade and finance - the value of goods and services trade,
including the sizable share of re-exports, is about four times GDP. Hong Kong
levies excise duties on only four commodities, namely: hard alcohol, tobacco,
hydrocarbon oil, and methyl alcohol. There are no quotas or dumping laws. Hong
Kong's open economy left it exposed to the global economic slowdown that began
in 2008. Although increasing integration with China, through trade, tourism,
and financial links, helped it to make an initial recovery more quickly than
many observers anticipated, it again faces a possible slowdown as exports to
the Euro zone and US slump. The Hong Kong government is promoting the Special
Administrative Region (SAR) as the site for Chinese renminbi (RMB)
internationalization. Hong Kong residents are allowed to establish
RMB-denominated savings accounts; RMB-denominated corporate and Chinese
government bonds have been issued in Hong Kong; and RMB trade settlement is
allowed. The territory far exceeded the RMB conversion quota set by Beijing for
trade settlements in 2010 due to the growth of earnings from exports to the
mainland. RMB deposits grew to roughly 9.1% of total system deposits in Hong
Kong by the end of 2012, an increase of 59% from the previous year. The
government is pursuing efforts to introduce additional use of RMB in Hong Kong
financial markets and is seeking to expand the RMB quota. The mainland has long
been Hong Kong's largest trading partner, accounting for about half of Hong
Kong's exports by value. Hong Kong's natural resources are limited, and food
and raw materials must be imported. As a result of China's easing of travel
restrictions, the number of mainland tourists to the territory has surged from
4.5 million in 2001 to 34.9 million in 2012, outnumbering visitors from all
other countries combined. Hong Kong has also established itself as the premier
stock market for Chinese firms seeking to list abroad. In 2012 mainland Chinese
companies constituted about 46.6% of the firms listed on the Hong Kong Stock
Exchange and accounted for about 57.4% of the Exchange's market capitalization.
During the past decade, as Hong Kong's manufacturing industry moved to the
mainland, its service industry has grown rapidly. Growth slowed to 5% in 2011,
and less than 2% in 2012. Credit expansion and tight housing supply conditions
caused Hong Kong property prices to rise rapidly and inflation to rise 4.1% in
2012. Lower and middle income segments of the population are increasingly
unable to afford adequate housing. Hong Kong continues to link its currency
closely to the US dollar, maintaining an arrangement established in 1983.
Source
: CIA
STS GEMS
LTD.
ADDRESS: Unit 614, 6/F., Heng Ngai Jewellery
Center, 4, Hok Yuen Street East, Hunghom, Kowloon, Hong Kong.
PHONE: 852-2367 5066
FAX: 852-2739 4982
E-MAIL: info@stsgems.com.hk
Managing Director: Mr. Sunil
Agrawal
Incorporated on: 2nd
May, 1986.
Organization: Private
Limited Company.
Capital: Nominal: HK$10,000,000.00
Issued: HK$8,750,000.00
Business Category: Diamond & Gemstone Trader.
Group Revenue: INR 9,305.6
million (Year ended 31-03-2013)
Employees:
8. (Including associate)
Main Dealing Banker: Bank of Baroda, Hong Kong Branch, Hong Kong.
Banking Relation: Good.
Registered Head Office:-
Unit 614, 6/F., Heng Ngai Jewellery Center, 4, Hok Yuen Street East,
Hunghom, Kowloon, Hong Kong.
Holding Company:-
Vaibhav Global Ltd., India.
[Formerly known as: Vaibhav Gems Ltd.]
Associated Companies:-
Genoa Jewelers (St. Kitts) Ltd., West Indies.
Genoa Jewelers Ltd., British Virgin Islands.
Indo Mexico Co. S. De R.L De C.V., Mexico.
Jewel Gem USA Inc., US.
STS Creations Thai Ltd., Thailand.
STS Gems Japan Ltd., Japan.
STS Gems Thai Ltd., Thailand.
STS Gems USA Inc., USA.
STS Holdings Ltd., Hong Kong.
STS Jewels Inc., US.
The Jewellery Channel Inc., US.
The Jewellery Channel Ltd., UK.
10284458
0168685
Managing Director: Mr. Sunil
Agrawal
Nominal Share Capital: HK$10,000,000.00 (Divided into 100,000 shares of
HK$100.00 each)
Issued Share Capital: HK$8,750,000.00
(As per registry dated 02-05-2013)
|
Name |
|
No. of shares |
|
Vaibhav Global Ltd. [Formerly Known as: Vaibhav Gems Ltd.] K-6B, Fateh Tiba, Adarsh Nagar Jaipur, Rajasthan 302005, India. |
|
87,500 ===== |
(As per registry dated 02-05-2013)
|
Name (Nationality) |
Address |
|
Rizwan ULLAH |
House No. 722, Mohalla Patetan Kazi, Ka Nala, Ghat Gate, Jaipur,
Rajastha, India. |
|
Sunil AGRAWAL |
6/F., Po Yuk Building, 61 Robinson Road, Hong Kong. |
(As per registry dated 02-05-2013)
|
Name |
Address |
Co. No. |
|
Lodestar Secretaries Ltd. |
13/F., Wah Kit Commercial Centre, 302 Des Voeux Road Central, Hong
Kong. |
0113023 |
The subject was incorporated on 2nd May, 1986 as a private limited liability
company under the Hong Kong Companies Ordinance.
Apart from these, neither material change nor amendment has been ever
traced and noted.
Activities: Diamond
& Gemstone Trader.
Lines: All
kinds of diamonds and gemstones.
Employees: 8. (Including associate)
Commodities Imported: India, other Asian countries, etc.
Markets: Hong
Kong, China, other Asian countries, Europe, etc.
Group Revenue: INR
5,375.0 million (Year ended 31-03-2011)
INR 6,748.2
million (Year ended 31-03-2012)
INR 9,305.6
million (Year ended 31-03-2013)
Terms/Sales:
L/C or as per
contracted.
Terms/Buying: As
per contracted.
Nominal Share Capital: HK$10,000,000.00 (Divided into 100,000 shares
of HK$100.00 each)
Issued Share Capital: HK$8,750,000.00
Mortgage or Charge: (See attachment)
Group Net Profit/(Loss): INR 431.0 million (Year ended 31-03-2011)
INR 685.1
million (Year ended 31-03-2012)
(INR 856.1
million) (Year ended 31-03-2013)
Group Profit or Loss: Group
suffered from a great loss in FY2013.
Condition:
Keeping in a
satisfactory manner.
Facilities:
Making rather
active use of general banking facilities.
Payment:
Slow but
correct.
Commercial Morality: Satisfactory.
Banker:
Bank of Baroda,
Hong Kong Branch, Hong Kong.
Standing:
Small.
STS Gems Ltd. is a wholly-owned subsidiary of Vaibhav Global Ltd.
[Vaibhav/Group] which is an India-based firm.
The old name of Vaibhav was Vaibhav Gems Ltd. The name was changed on 29th November, 2012.
Vaibhav has had a subsidiary known as STS Jewels Inc. The subject belongs to STS group of
companies.
STS Group with headquarters in Austin, TX is amongst the better-known
organizations in the colour gemstones and jewellery industry. Tanzanite Jewellery is STS Group’s
specialty. So does the subject.
STS Group has a reservoir of over 1,800 skilled and trained employee
worldwide. This includes resources in
designing, manufacturing and distribution of jewellery and gemstones.
The subject has had an associated factory in Panyu District, Guangzhou
City, Guangdong Province, China.
Based in Rajasthan, India, Vaibhav is a listed firm in India. Incorporated in Jaipur, India in 1989,
Vaibhav is today a professionally managed, end-to-end vertically integrated
business organization.
Vaibhav started as a gemstone manufacturer and then in 1996-97, as a
forward integration. It came out with
IPO to establish a jewellery‑manufacturing unit for export of gem-studded
gold jewellery. First unit was set up at
Adarsh Nagar Jaipur in 1997. In the year
1999, it set up a new 100% Export Oriented Unit at Export Promotion Industrial
Area, Sitapura, Jaipur. In 2002 it
installed an Italian micro-weight gold chain manufacturing plant.
The subject is engaged in outsourcing products for the Group and also
marketing jewellery products throughout the world.
The subject is one of the members of the STS Group.
STS Group with headquarters in Austin, TX (STS Jewels Inc.) is amongst
the better-known organizations in the colour gemstones and jewellery
industry. Tanzanite Jewellery is STS
Group’s specialty.
STS has over 1,800 skilled and trained employee worldwide. These include professionals engaged in
designing, manufacturing and distribution of jewellery and gemstones.
Besides the subject, STS Group has an extensive Product Development team
and infrastructure spread over New York, Bangkok and India.
From a humble beginning, the group has steadily expanded to be one of
the most vertically integrated jewellery companies in the world. Today, the group has four plants in India and
Thailand engaged in gemstone cutting and jewellery manufacturing, using casting
and stamping operations. The latest addition
is a state of art micro-weight rope chain manufacturing plant.
For the year ended 31st March, 2012, the revenues of the Group amounted
to INR 9,305.6 million (2012: INR 6,748.2 million), Group made a great loss of
INR 856.1 million (2011: Net Profit was INR 685.1 million). The Group had entered “Corporate Debt
Restructuring Mechanism”. However, in
April 2013 it exited CDRM.
According to the Group, it is taking measures and issues to prevent
further losing in FY 2014.
The subject is fully supported by the Group. History in Hong Kong is over 27 years.
The director of the subject Mr. Sunil Agrawal is also the Chairman of
the Group.
On the whole, consider the subject good for normal business engagements.
Brief personal profile of the principal director:
Mr. Sunil Agrawal is the chairman of the Vaibhav Group of companies
which is the parent company of STS Jewels Inc.
Being a native of Jaipur, India, Agrawal received his Bachelor’s Degree
from the University of Rajasthan in India, and his Executive MBA from Columbia
University, New York. He founded the
Vaibhav Group of companies in 1980 in Jaipur, India, and it remains one of the
world’s few fully integrated jewellery companies. Agrawal has been instrumental in
commercialization of gemstones such as Tanzanite, Pink Tourmaline, and Fire
Opal and in the development of the Tanzanite Protocol, the voluntary code of
conduct for the gemstone trade. He is a
board member and past president of the Indian Diamond & Colored Gemstone
Association.
|
Date |
Particulars |
Amount |
|
25-07-2006 |
Instrument: Memorandum Property: Distinctive TD 1065 14-07-2006 120,285.00 16-10-2006 TD 1077 21-07-2006
80,000.00 23-10-2006 Mortgagee: Bank of Baroda, Hong Kong Branch. |
Loan or credit or other facilities |
|
27-09-2007 |
Instrument: Memorandum Property: Distinctive 91220300000036 15-07-2007 US$126517.03 15-10-2007 91220300000054 22-07-2007 US$84144.84 20-10-2007 Mortgagee: Bank of Baroda, Hong Kong Branch. |
Loan or credit or other facilities |
|
22-04-2010 |
Instrument: Memorandum Property: No. of Receipts Date of
Issue Amount Due Date 91220300000036 03-01-2010 US$136,328.00 01-01-2011 91220300000367 06-10-2009 US$270,660,07 05-10-2010 91220300000379 27-10-2009 US$42,884,75 26-10-2010 91220300000975 12-07-2009 US$65,284.01 11-07-2010 Mortgagee: Bank of Baroda, Hong Kong Branch. |
Loan or credit or other facilities |
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.65.42 |
|
|
1 |
Rs.102.09 |
|
Euro |
1 |
Rs.87.32 |
INFORMATION DETAILS
|
Report
Prepared by : |
PRL |
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.