MIRA INFORM REPORT

Report Date :

06.11.2013

IDENTIFICATION DETAILS

Name :	WAI HING CO.
Registered Office :	Flat A4, 6/F., Hankow Centre, 47 Peking Road, Tsimshatsui, Kowloon
Country :	Hong Kong
Date of Incorporation :	03.11.2008
Com. Reg. No.:	39956612-000-11
Legal Form :	Sole Proprietorship.
Line of Business :	Importer, Exporter and Wholesaler of all kinds of diamonds and jewellery products, emerald, precious stones.
No. of Employees :	03. (Including associates)

RATING & COMMENTS

MIRA’s Rating :

Ba

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Satisfactory
Payment Behaviour :	No Complaints
Litigation :	Clear

NOTES:

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ECGC Country Risk Classification List – March 31^st 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

Concern name

WAI HING CO.

Concern ADDRESS

Flat A4, 6/F., Hankow Centre, 47 Peking Road, Tsimshatsui, Kowloon, Hong Kong.

PHONE: 2366 3063, 2366 4071

FAX: 2311 0919

E-MAIL: reliance@hkstar.com

MANAGEMENT

Manager: Mr. Asik Ali Mohamed Sadakthambi

SUMMARY

Establishment: 3rd November, 2008.

Organization: Sole Proprietorship.

Capital: Not disclosed.

Business Category: Diamond Trader.

Annual Turnover: HK$40~45 million (Including associates)

Employees: 3 (Including associates)

Main Dealing Banker: The Hongkong & Shanghai Banking Corp. Ltd., Hong Kong.

Banking Relation: Satisfactory.

Concern ADDRESS

Head Office:-

· Flat A4, 6/F., Hankow Centre, 47 Peking Road, Tsimshatsui, Kowloon, Hong Kong.

P.O. Box 97948, Tsim Sha Tsui Post Office, Kowloon, Hong Kong.

Associated Companies:- (Same address)

· Bridiam, Hong Kong.

Reliance Trades, Hong Kong.

BUSINESS REGISTRATION NUMBER

39956612-000-11

MANAGEMENT

Manager: Mr. Asik Ali Mohamed Sadakthambi

SOLE PROPRIETOR

Name: Mr. Asik Ali MOHAMED SADAKTHAMBI

Residential Address: Flat A4, 6/F., Hankow Centre, 47 Peking Road, Tsimshatsui, Kowloon, Hong Kong.

HISTORY

The subject was established on 3rd November, 2008 as a sole proprietorship concern owned by Mr. Asik Ali Mohamed Sadakthambi under the Hong Kong Business Registration Regulations.

Apart from these, neither material change nor amendment has been ever traced and noted.

OPERATIONS

Activities: Importer, Exporter and Wholesaler.

Lines: All kinds of diamonds and jewellery products, emerald, precious stones.

Employees: 3. (Including associates)

Commodities Imported: India, Belgium, other European countries, etc.

Markets: Japan, Southeast Asia, Europe, Middle East, etc.

Annual Turnover: HK$40~45 million (Including associates)

Terms/Sales: L/C, T/T, etc.

Terms/Buying: L/C, T/T, D/P, etc.

FINANCIAL INFORMATION

Capital: Not disclosed.

Profit or Loss: Making a small profit.

Condition: Business is normal.

Facilities: Making rather active use of general banking facilities.

Payment: Met trade commitments as contracted.

Commercial Morality: Satisfactory.

Banker: The Hongkong & Shanghai Banking Corp. Ltd., Hong Kong.

Standing: Small.

GENERAL

Wai Hing Co. is a sole proprietorship set up and owned by Mr. Asik Ali Mohamed Sadakthambi who is an Indian. He is a Hong Kong ID Card holder and has got the right to reside in Hong Kong permanently.

Business commenced in November 2008, the subject is a diamond importer, exporter and wholesaler. It is chiefly trading in loose diamonds.

The subject has got an affiliated company Reliance Trades located at its operating address. Established in February 1981, Reliance Trades and the subject are engaged in the same lines of business.

The subject’s operating address is in a private and commercial building known as Hankow Centre which is in Tsimshatsui, Kowloon, Hong Kong. The subject is in the private part of the building.

Reliance Trades is a partnership jointly owned by Mr. Seyed Abdul Gani Seyed Abdul Kader, Mr. Asik Ali Mohamed Sadakthamby and Mr. Seyed Abdul Kader Mafaz Mohamed. All the partners are Indians and all of whom are Hong Kong ID Card holders and have got the right to reside in Hong Kong permanently. The sole proprietor of the subject is one of the partners of Reliance Trades.

The last two partners are residing at the registered address of the subject. It is likely that Seyed Abdul Kader is also residing at the same address.

The subject is a polished and cut diamond importer, exporter and wholesaler. It also trades in alexandrite, emerald, precious stones, ruby jade, gem sets, semi-precious stones, blue or coloured sapphire, Tanzanite. Commodities are chiefly imported from India and Europe. Prime markets are Japan, India, Southeast Asia, Europe, the Middle East, etc.

The subject’s business is chiefly handled by Mohamed Sadakthambi himself. He has had close business ties with some the diamond suppliers and manufacturers in Mumbai, India.

The annual sales turnover of the subject and Reliance Trades ranges from HK$40 to 45 million.

The subject is supported by Reliance Trades.

On the whole, since the history of the subject in Hong Kong is over four years, consider it good for normal business engagements in small credit amounts.

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 8^th Century B.C.  India, in fact, remained undisputed leader till 18^th 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 30^th 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.61.79
UK Pound	1	Rs.98.66
Euro	1	Rs.83.42

INFORMATION DETAILS

Report Prepared by :

SDA

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%)

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This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.