MIRA
INFORM REPORT
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Report Date : |
01.08.2014 |
IDENTIFICATION DETAILS
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Name : |
STAR DIAM
SHANGHAI LTD. |
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Registered Office : |
B809a |
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Country : |
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Financials (as on) : |
30.06.2014 |
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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 the Trading of Diamond in Shanghai Diamond
Exchange. |
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No. of Employees : |
4 |
RATING & COMMENTS
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MIRA’s Rating : |
Ca |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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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 |
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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 – June 1, 2014
|
Country Name |
Previous Rating (31.03.2014) |
Current Rating (01.06.2014) |
|
China |
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 |
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, growth of the
private sector, development of stock markets and a modern banking system, 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 considered important to "economic
security," explicitly looking to foster globally competitive industries.
After keeping its currency tightly linked to the US dollar for years, in July
2005 China 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 and expanded
the daily trading band within which the RMB is permitted to fluctuate. 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 2013 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 consumption; (b)
facilitating higher-wage job opportunities for the aspiring middle class,
including rural migrants and increasing numbers of college graduates; (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. Several factors are converging to
slow China's growth, including debt overhang from its credit-fueled stimulus
program, industrial overcapacity, inefficient allocation of capital by
state-owned banks, and the slow recovery of China's trading partners. The government's
12th Five-Year Plan, adopted in March 2011 and reiterated at the Communist
Party's "Third Plenum" meeting in November 2013, emphasizes continued
economic reforms and the need to increase domestic consumption in order to make
the economy less dependent in the future on fixed investments, exports, and
heavy industry. However, China has made only marginal progress toward these
rebalancing goals. The new government of President XI Jinping has signaled a
greater willingness to undertake reforms that focus on China's long-term
economic health, including giving the market a more decisive role in allocating
resources.
|
Source
: CIA |
Company name & 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 :
4
BUSINESS CATEGORY : TRADING
REVENUE :
CNY 7,168,000 (JAN. 1, 2014 TO
JUN. 30, 2014)
EQUITIES :
CNY -1,652,000 (AS OF JUN. 30, 2014)
E-MAIL :
N/A
PAYMENT :
AVERAGE
MARKET CONDITION : FAIR
FINANCIAL CONDITION : POOR
OPERATIONAL TREND : FAIR
GENERAL REPUTATION : FAIR
EXCHANGE RATE :
CNY 6.18 = 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.:
55746464-6
SC’s Tax No.: 310115557464646
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 |
|
Supervisor |
Rishna Rajesh 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
-------------------------------
Registration No.: 1479962
Legal Form: Private
Status: Live
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
Supervisor
--------------
Rishna Rajesh Shah
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 products 100% from domestic market. SC sells 60% in
domestic market and 40% to overseas market, mainly
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. 4
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 Jun. 30, 2014 |
|
Current assets |
7,684 |
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Fixed assets |
0 |
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Construction in progress |
0 |
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Intangible assets |
0 |
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Long-term prepaid expenses |
0 |
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Deferred income tax assets |
0 |
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Other non-current assets |
0 |
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------------------ |
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Total assets |
7,684 |
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|
============= |
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Current liabilities |
9,336 |
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Non-current liabilities |
0 |
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|
------------------ |
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Total liabilities |
9,336 |
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Equities |
-1,652 |
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|
------------------ |
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Total liabilities & equities |
7,684 |
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|
============= |
Income Statement
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Unit: CNY’000 |
Jan.
1, 2014 to Jun. 30, 2014 |
|
Revenue |
7,168 |
|
Cost of sales |
7,034 |
|
Profit before tax |
-26 |
|
Less: profit tax |
0 |
|
-26 |
Important Ratios
=============
|
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As
of Jun. 30, 2014 |
|
*Current ratio |
0.82 |
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*Liabilities to assets |
1.21 |
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*Net profit margin (%) |
-0.36 |
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*Return on total assets (%) |
-0.34 |
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*Revenue / Total assets |
0.93 |
|
*Cost of sales / Revenue |
0.98 |
FINANCIAL
COMMENTS
PROFITABILITY:
FAIR
The revenue of SC appears fair in its line.
SC’s net profit margin is fair.
SC’s return on total assets is fair.
SC’s cost of sales is fairly high, comparing with its revenue.
LIQUIDITY: AVERAGE
The current ratio of SC is maintained in a fair level
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.
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
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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.60.25 |
|
|
1 |
Rs.101.92 |
|
Euro |
1 |
Rs.80.70 |
INFORMATION DETAILS
|
Analysis Done by
: |
DIV |
|
|
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|
Report Prepared
by : |
TPT |
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.