MIRA
INFORM REPORT
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Report Date : |
23.12.2013 |
IDENTIFICATION DETAILS
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Name : |
STAR DIAM
SHANGHAI LTD. |
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Registered Office : |
B809 A China
Diamond Exchange Centre Plaza No. 1701 Century Avenue, Pudong New Area,
Shanghai 200122 Pr |
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Country : |
China |
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Financials (as on) : |
31.12.2012 |
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Date of Incorporation : |
08.07.2010 |
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Com. Reg. No.: |
310115400261022 |
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Legal Form : |
Wholly Foreign-Owned Enterprise |
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Line of Business : |
Subject is engaged in selling diamond. |
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No. of Employees : |
3 |
RATING & COMMENTS
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MIRA’s Rating : |
Ca |
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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 |
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Status : |
Moderate |
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Payment Behaviour : |
Slow |
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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) |
|
China |
A2 |
A2 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
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 and address
STAR DIAM SHANGHAI LTD.
B809A CHINA
DIAMOND EXCHANGE CENTRE PLAZA NO. 1701 CENTURY AVENUE, PUDONG NEW AREA,
SHANGHAI 200122 PR CHINA
TEL: 86 (0)
21-38729790
FAX: 86 (0)
21-38729791
EXECUTIVE SUMMARY
Date of Registration : july 8, 2010
REGISTRATION NO. : 310115400261022
LEGAL FORM : Wholly foreign-owned enterprise
CHIEF EXECUTIVE :
RUCHIT MUKESH SHAH (LEGAL REPRESENTATIVE)
REGISTERED CAPITAL : usd 200,000
staff :
3
BUSINESS CATEGORY : TRADING
Revenue :
CNY 16,178,000 (AS OF DEC. 31,
2012)
EQUITIES :
CNY -1,463,000 (AS OF DEC. 31, 2012)
WEBSITE : arioto.cn/N/A
E-MAIL :
N/A
PAYMENT :
AVERAGE
MARKET CONDITION : FAIR
FINANCIAL CONDITION : POOR
OPERATIONAL TREND : Downward
GENERAL REPUTATION : Detrimental
EXCHANGE RATE :
CNY 6.08 = USD 1
Adopted
abbreviations (as follows)
SC - Subject Company
(the company inquired by you)
N/A – Not available
CNY – China Yuan Ren
Min Bi
OPERATIONAL TREND & GENERAL
REPUTATION
This section aims at indicating the relative positions of SC in respect
of its operational trend & general reputation
Operational Trend:- General
Reputation:-
Upward Excellent
Steady Good
Fairly Steady Fairly
Good
Ordinary Average
Fair Fair
Stagnant Detrimental
Downward Not
known
Not known Not
yet be determined
Not yet be determined
LEGAL
STATUS & HISTORY
SC was established as a wholly foreign-owned
enterprise of PRC with State Administration of Industry & Commerce
(SAIC) under registration No.: 310115400261022
on July 8, 2010.
SC’s Organization Code Certificate No.:
55794476-2
SC’s registered capital: usd 200,000
SC’s paid-in capital: usd 200,000
Registration Change Record:-
No significant changes of SC have been noted
in SAIC since its incorporation.
Current Co search indicates SC’s shareholders & chief executives are
as follows:-
|
Name of Shareholder (s) |
% of Shareholding |
|
Spark Diam Limited (Hong Kong) |
100 |
SC’s Chief Executives:-
|
Position |
Name |
|
Legal Representative, Chairman, and General Manager |
Ruchit Mukesh Shah |
RECENT
DEVELOPMENT
No recent development was found during our checks at present.
SHAREHOLDER
CHART & BACKGROUND
Name %
of Shareholding
Spark Diam Limited (Hong Kong) 100
MANAGEMENT
Ruchit Mukesh
Shah, Legal Representative, Chairman
and General Manager
---------------------------------------------------------------------------------------------------
Gender: M
Qualification: University
Working experience
(s):
At present, working in SC as legal representative, chairman and general
manager
BUSINESS
OPERATION
SC’s registered business scope includes trading of diamond in Shanghai
Diamond Exchange.
SC is mainly engaged in selling diamond.
SC’s products mainly include: diamond.
SC sources its materials 100% from domestic market. SC sells 60% in domestic market and 40% to overseas market, mainly Southeast Asia, etc.
The buying terms of SC include Check, T/T and Credit of 30-60 days. The
payment terms of SC include Check, T/T, L/C and Credit of 30-60 days.
Staff &
Office:
--------------------------
SC is known to have approx. 3
staff at present.
SC rents an area as its operating office, but the detailed information
is unknown.
RELATED
COMPANY
SC is not known to have the subsidiary at present.
PAYMENT
Overall payment appraisal:
( ) Excellent ( ) Good (X) Average ( ) Fair ( ) Poor ( ) Not yet be 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.
BANKING
The bank information of SC is not filed in local SAIC.
FINANCIALS
Balance Sheet
|
Unit: CNY’000 |
As of Dec. 31,
2011 |
As of Dec. 31,
2012 |
|
Current assets |
2,791 |
12,416 |
|
Fixed assets |
0 |
0 |
|
Construction in progress |
0 |
0 |
|
Intangible assets |
0 |
0 |
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Long-term prepaid expenses |
0 |
0 |
|
Deferred income tax assets |
0 |
0 |
|
Other non-current assets |
0 |
103 |
|
|
------------------ |
------------------ |
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Total assets |
2,791 |
12,519 |
|
|
============= |
============= |
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Current liabilities |
1,504 |
13,982 |
|
Non-current liabilities |
0 |
0 |
|
|
------------------ |
------------------ |
|
Total liabilities |
1,504 |
13,982 |
|
Equities |
1,287 |
-1,463 |
|
|
------------------ |
------------------ |
|
Total liabilities & equities |
2,791 |
12,519 |
|
|
============= |
============= |
Income Statement
|
Unit: CNY’000 |
As of Dec. 31,
2011 |
As of Dec. 31,
2012 |
|
Revenue |
6,342 |
16,178 |
|
Cost of sales |
6,494 |
19,178 |
|
Profit before tax |
-58 |
-2,020 |
|
Less: profit tax |
0 |
0 |
|
-58 |
-2,020 |
Important Ratios
=============
|
|
As of Dec. 31,
2011 |
As of Dec. 31,
2012 |
|
*Current ratio |
1.86 |
0.89 |
|
*Liabilities to assets |
0.54 |
1.12 |
|
*Net profit margin (%) |
-0.91 |
-12.49 |
|
*Return on total assets (%) |
-2.08 |
-16.14 |
|
*Revenue / Total assets |
2.27 |
1.29 |
|
*Cost of sales / Revenue |
1.02 |
1.19 |
FINANCIAL
COMMENTS
PROFITABILITY:
POOR
The revenue of SC appears average, and it was rising in 2012.
SC’s net profit margin is fair in 2011, poor in 2012.
SC’s return on total assets is fair in 2011, poor in 2012.
SC’s cost of sales is too high, comparing with its revenue.
LIQUIDITY: FAIR
The current ratio of SC is maintained in a normal level in 2011, fair in
2012
SC’s revenue is in an average level, comparing with the size of its
total assets.
LEVERAGE: POOR
The debt ratio of SC is high in 2012.
The risk for SC to go bankrupt is fairly high.
Overall financial
condition of the SC: Poor.
CONCLUSIONS
SC is considered small-sized in its line with poor financial conditions.
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.
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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.
-
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.62.24 |
|
|
1 |
Rs.101.82 |
|
Euro |
1 |
Rs.84.88 |
INFORMATION DETAILS
|
Report
Prepared by : |
NIS |
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.