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Report Date : |
19.03.2013 |
IDENTIFICATION DETAILS
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Name : |
VARUN TRADING CO DMCC |
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Registered Office : |
AG Tower, Business Centre DMCC 1, 31st Floor, Jumeirah Lakes
Towers PO Box 57648 Dubai |
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Country : |
United Arab Emirates |
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Date of Incorporation : |
07.06.2007 |
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Legal Form : |
Limited Liability Company - LLC |
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Line of Business : |
Distributors of jewellery, gold and loose diamonds. |
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No. of Employees : |
3 |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Status : |
Satisfactory |
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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 – June 30th, 2012
|
Country Name |
Previous Rating (31.03.2011) |
Current Rating (30.06.2012) |
|
UAE |
A2 |
A2 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
Off-credit |
D |
UAE - ECONOMIC OVERVIEW
The UAE has an open economy with
a high per capita income and a sizable annual trade surplus. Successful efforts
at economic diversification have reduced the portion of GDP based on oil and
gas output to 25%. Since the discovery of oil in the UAE more than 30 years
ago, the UAE has undergone a profound transformation from an impoverished
region of small desert principalities to a modern state with a high standard of
living. The government has increased spending on job creation and
infrastructure expansion and is opening up utilities to greater private sector
involvement. In April 2004, the UAE signed a Trade and Investment Framework
Agreement with Washington and in November 2004 agreed to undertake negotiations
toward a Free Trade Agreement with the US, however, those talks have not moved
forward. The country's Free Trade Zones - offering 100% foreign ownership and
zero taxes - are helping to attract foreign investors. The global financial
crisis, tight international credit, and deflated asset prices constricted the
economy in 2009. UAE authorities tried to blunt the crisis by increasing
spending and boosting liquidity in the banking sector. The crisis hit Dubai
hardest, as it was heavily exposed to depressed real estate prices. Dubai
lacked sufficient cash to meet its debt obligations, prompting global concern
about its solvency. The UAE Central Bank and Abu Dhabi-based banks bought the
largest shares. In December 2009 Dubai received an additional $10 billion loan
from the emirate of Abu Dhabi. The economy is expected to continue a slow rebound.
Dependence on oil, a large expatriate workforce, and growing inflation
pressures are significant long-term challenges. The UAE''s strategic plan for
the next few years focuses on diversification and creating more opportunities
for nationals through improved education and increased private sector
employment.
Source : CIA
Company Name : VARUN TRADING CO DMCC
Country of Origin : Dubai, United Arab Emirates
Legal Form : Limited Liability Company - LLC
Registration Date : 7th June 2007
Trade Licence Number : 30713
Chamber Membership Number : 0981
Issued Capital : UAE Dh 300,000
Paid up Capital : UAE Dh 300,000
Total Workforce : 3
Activities : Distributors of jewellery, gold and loose diamonds.
Financial Condition : Undetermined
Payments : Nothing detrimental uncovered
Person Interviewed : Rajesh R Shah, Managing Director
VARUN TRADING CO DMCC
Location : AG Tower,
Business Centre DMCC 1, 31st Floor, Jumeirah Lakes Towers
PO Box : 57648
Town : Dubai
Country : United Arab
Emirates
Telephone : (971-4) 3325657
Facsimile : (971-4)
2264346
Mobile : (971-50)
7987501
Email : varundmcc@yahoo.com
Subject operates from a small suite of offices that are rented and
located in the Central Business Area of Dubai.
Branch Office (s)
Location Description
· 102 Miram Building Office
premises
Plot No. 113/131
Al Daghaya Road
Deira
Dubai
Tel: (971-4)
2264346
Name Position
· Rajesh R Shah Managing
Director
Date of
Establishment : 7th
June 2007
Legal Form : Limited Liability
Company
Trade Licence No. : 30713
Chamber Member No. : 0981
Issued Capital : UAE Dh 300,000
Paid up Capital : UAE Dh 300,000
· Rajesh R Shah 100%
Activities: Engaged in the import and distribution of jewellery, gold and loose
diamonds.
Import Countries: Europe and the Far East
Subject has a workforce of 3 employees.
Companies registered in Dubai, United Arab Emirates are not legally
required to make their accounts public and no financial information was
released by the company or submitted by outside sources.
·
Emirates National Bank of Dubai
Baniyas Street
PO Box:
777
Dubai
Tel:
(971-4) 2222241
No complaints regarding subject’s payments have been reported.
Please note that we were unable to contact the subject during our
investigation.
Local sources report that the subject’s operating history is clear with
payment obligations met in a generally timely manner. The financial position is
satisfactory and the business is deemed a fair trade risk.
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.
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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
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.54.29 |
|
|
1 |
Rs.81.93 |
|
Euro |
1 |
Rs.70.01 |
INFORMATION DETAILS
|
Report
Prepared by : |
PDT |
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.