MIRA
INFORM REPORT
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Report Date : |
11.11.2013 |
IDENTIFICATION DETAILS
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Name : |
BLH-KG DIAMONDS ( |
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Registered Office : |
Room A606, |
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Country : |
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Financials (as on) : |
31.12.2012 |
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Date of Incorporation : |
20.06.2005 |
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Com. Reg. No.: |
310115400177608 |
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Legal Form : |
Chinese-Foreign
Equity Joint Venture |
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Line of Business : |
Subject is engaged in diamond trading in shanghai diamond
exchange. |
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No. of Employees : |
06 |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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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 – March 31st, 2013
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Country Name |
Previous Rating (31.12.2012) |
Current Rating (31.03.2013) |
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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 |
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
BLH-KG DIAMONDS (CHINA)
ROOM A606, CHINA
DIAMOND EXCHANGE CENTER
NO. 1701 CENTURY
AVENUE, PUDONG NEW AREA, SHANGHAI 200122 PR CHINA
TEL: 86 (0)
21-50473771/61001655
FAX: 86 (0)
21-50473771
EXECUTIVE SUMMARY
Date of Registration : june 20, 2005
REGISTRATION NO. : 310115400177608
LEGAL FORM : Chinese-foreign equity joint venture
enterprise
CHIEF EXECUTIVE : geng lijun
(LEGAL REPRESENTATIVE)
REGISTERED CAPITAL : usd 200,000
staff :
6
BUSINESS CATEGORY :
trading
Revenue :
CNY 220,890,000 (AS OF DEC. 31, 2012)
EQUITIES :
CNY 9,610,000 (AS OF DEC.
31, 2012)
WEBSITE : N/A
E-MAIL : N/A
PAYMENT :
AVERAGE
MARKET CONDITION : COMPETITIVE
FINANCIAL CONDITION : fairly stable
OPERATIONAL TREND : FAIRLY STEADY
GENERAL REPUTATION : AVERAGE
EXCHANGE RATE : CNY 6.12 = 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 Chinese-foreign equity joint venture enterprise of PRC with State Administration of Industry & Commerce (SAIC) under registration No.: 310115400177608 on June 20, 2005.
SC’s Organization
Code Certificate No.: 77626608-4
%20-%20242783%2011-Nov-2013_files/image002.jpg)
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 |
|
K. Girdharlal (Hongkong) Ltd. |
51 |
|
Geng Lijun |
49 |
SC’s Chief Executives:-
|
Position |
Name |
|
Legal Representative, Chairman, and General Manager |
Geng Lijun |
RECENT DEVELOPMENT
No recent development was found during our checks at present.
SHAREHOLDER CHART &
BACKGROUND
Name %
of Shareholding
K. Girdharlal (Hongkong) Ltd. 51
Geng Lijun 49
K. Girdharlal (Hongkong) Ltd.
------------------------------------------
Date of Registration: March 6, 2000
Registration No.: 0706922
Legal Form: Private
Status: Live
MANAGEMENT
Geng Lijun, Legal Representative, Chairman and General
Manager
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Gender: M
Qualification: University
Working experience (s):
From 2005 to present, working in SC as legal representative, chairman and general manager
BUSINESS OPERATION
SC’s registered business scope includes diamond trading in shanghai diamond exchange; importing and exporting diamond
SC is mainly engaged in diamond trading in shanghai diamond exchange.
SC’s products mainly include: diamond.
SC sources its materials 100% from overseas market. SC sells
100% of its products in domestic market, mainly
The buying terms of SC include L/C and Credit of 30-60 days. The payment terms of SC include T/T and Credit of 30-60 days.
Staff & Office:
--------------------------
SC is known to have approx. 6 staff at present.
SC rents an area as its operating office of approx. 100 sq. meters at the heading address.
RELATED COMPANY
SC is not known to have any 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
Basic Bank:
Industrial and Commercial Bank of China
AC#: N/a
FINANCIALS
Balance Sheet
|
Unit: CNY’000 |
As of Dec. 31, 2010 |
As of Dec. 31, 2011 |
As of Dec. 31, 2012 |
|
11,420 |
33,910 |
26,780 |
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Notes receivable |
0 |
0 |
0 |
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Accounts receivable |
20,880 |
100,780 |
33,540 |
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Other receivable |
2,930 |
1,850 |
1,730 |
|
Inventory |
1,150 |
8,920 |
3,220 |
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Non-current assets within one year |
0 |
0 |
0 |
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Other current assets |
20 |
330 |
280 |
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------------------ |
------------------ |
------------------ |
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Current assets |
36,400 |
145,790 |
65,550 |
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Fixed assets |
0 |
0 |
0 |
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Long-term prepaid expenses |
0 |
0 |
0 |
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Deferred income tax assets |
0 |
0 |
0 |
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Other non-current assets |
0 |
0 |
0 |
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------------------ |
------------------ |
------------------ |
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Total assets |
36,400 |
145,790 |
65,550 |
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============= |
============= |
============= |
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Short-term loans |
0 |
0 |
0 |
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Notes payable |
0 |
0 |
0 |
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Accounts payable |
30,950 |
135,890 |
52,820 |
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Advances from clients |
0 |
0 |
0 |
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Other payable |
1,440 |
3,210 |
4,290 |
|
Other current liabilities |
-2,160 |
-2,960 |
-1,170 |
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------------------ |
------------------ |
------------------ |
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Current liabilities |
30,230 |
136,140 |
55,940 |
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Non-current liabilities |
0 |
320 |
0 |
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------------------ |
------------------ |
------------------ |
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Total liabilities |
30,230 |
136,460 |
55,940 |
|
Equities |
6,170 |
9,330 |
9,610 |
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------------------ |
------------------ |
------------------ |
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Total liabilities & equities |
36,400 |
145,790 |
65,550 |
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============= |
============= |
Income Statement
|
Unit: CNY’000 |
As of Dec. 31, 2010 |
As of Dec. 31, 2011 |
As of Dec. 31, 2012 |
|
Revenue |
123,100 |
301,560 |
220,890 |
|
Cost of sales |
137,960 |
346,870 |
249,130 |
|
Sales expense |
0 |
0 |
0 |
|
Management expense |
1,670 |
2,900 |
2,420 |
|
Finance expense |
-1,040 |
-7,870 |
-3,250 |
|
Other operating profit |
17,900 |
44,490 |
27,780 |
|
Profit before tax |
2,410 |
4,150 |
370 |
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Less: profit tax |
530 |
1,000 |
90 |
|
1,880 |
3,150 |
280 |
Important Ratios
=============
|
|
As of Dec. 31, 2010 |
As of Dec. 31, 2011 |
As of Dec. 31, 2012 |
|
*Current ratio |
1.20 |
1.07 |
1.17 |
|
*Quick ratio |
1.17 |
1.01 |
1.11 |
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*Liabilities to assets |
0.83 |
0.94 |
0.85 |
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*Net profit margin (%) |
1.53 |
1.04 |
0.13 |
|
*Return on total assets (%) |
5.16 |
2.16 |
0.43 |
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*Inventory / Revenue ×365 |
4 days |
11 days |
6 days |
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*Accounts receivable/ Revenue ×365 |
62 days |
122 days |
56 days |
|
* Revenue/Total assets |
3.38 |
2.07 |
3.37 |
|
* Cost of sales / Revenue |
1.12 |
1.15 |
1.13 |
FINANCIAL COMMENTS
PROFITABILITY:
AVERAGE
The revenue of SC appears fairly good in its line.
SC’s net profit margin is average in three years.
SC’s return on total assets is fairly good in 2010 and average in 2011 and 2012.
SC’s cost of sales is high, comparing with its revenue.
LIQUIDITY: AVERAGE
The current ratio of SC is maintained in a normal level.
SC’s quick ratio is maintained in a fairly good level.
The inventory of SC is maintained in an average level.
The accounts receivable of SC appears average in 2012.
SC has no short-term loans in three years.
SC’s revenue is in an average level, comparing with the size of its total assets.
LEVERAGE: FAIR
The debt ratio of SC is fairly high.
The risk for SC to go bankrupt is average.
Overall financial condition of the SC: Fairly Stable.
CONCLUSIONS
SC is considered small-sized in its line with fairly stable financial conditions.
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 –
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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.62.73 |
|
|
1 |
Rs.100.92 |
|
Euro |
1 |
Rs.84.06 |
INFORMATION DETAILS
|
Report
Prepared by : |
NNA |
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 |
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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.