MIRA INFORM REPORT

Report Date :

19.08.2014

IDENTIFICATION DETAILS

Name :	LARGE SUN TRADING CO.
Registered Office :	Flat A, 6/F., Joint Venture Factory Building, 76 Hung To Road, Kwun Tong, Kowloon
Country :	Hongkong
Date of Incorporation :	18.11.1997
Com. Reg. No.:	21374618-000-11
Legal Form :	Sole Proprietorship.
Line of Business :	Manufacture, Importer and Exporter of all kinds of Jewellery Products, Silver Products
No. of Employees :	6 (Hongkong)

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 – June 01, 2014

Country Name	Previous Rating (31.03.2014)	Current Rating (01.06.2014)
Hongkong	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low Risk	A2
Moderate Low Risk	B1
Moderate Risk	B2
Moderate High Risk	C1
High Risk	C2
Very High Risk	D

HONGKONG - 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 has no tariffs on imported goods, and it levies excise duties on only four commodities, whether imported or produced locally: 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, its continued reliance on foreign trade and investment leaves it vulnerable to renewed global financial market volatility or a slowdown in the global economy. 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 12% of total system deposits in Hong Kong by the end of 2013. 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 total trade 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. Credit expansion and tight housing supply conditions have caused Hong Kong property prices to rise rapidly; consumer prices increased by more than 4% in 2013. 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. In 2013, Hong Kong and China signed new agreements under the Closer Economic Partnership Agreement, adopted in 2003 to forge closer ties between Hong Kong and the mainland. The new measures, effective from January 2014, cover services and trade facilitation, and will improve access to the mainland's service sector for Hong Kong-based companies.

Source : CIA

Company Name and Address

LARGE SUN TRADING CO.

ADDRESS: Flat A, 6/F., Joint Venture Factory Building, 76 Hung To Road, Kwun Tong, Kowloon, Hong Kong.

PHONE: 852-2344 2299

FAX: 852-2344 2099

MANAGEMENT

Manager: Ms. Chao Min Fen, Nancy

SUMMARY

Establishment: 18th November, 1997.

Organization: Sole Proprietorship.

Capital: Not disclosed.

Business Category: Manufacturer, Importer and Exporter.

Annual Turnover: HK$50~55 million.

Employees: 6. (Hong Kong)

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

Banking Relation: Satisfactory.

ADDRESS

Head Office:-

Flat A, 6/F., Joint Venture Factory Building, 76 Hung To Road, Kwun Tong, Kowloon, Hong Kong.

Associated Factory:-

Large Sun Jewelry Mfy. Co. Ltd.

Qiwan Industrial Area, Qiwan Road, Dong Qu, Zhongshan City, Guangdong Province, China.

[Tel: 86-760-888 2444 (8 lines)

Fax: 86-760-888 2448, 888 2449

E-mail: largesun@largesun.com.cn]

BUSINESS REGISTRATION NUMBER

21374618-000-11

MANAGEMENT

Manager: Ms. Chao Min Fen, Nancy

Contact Person: Ms. Yang

SOLE PROPRIETOR

Name: Ms. CHAO Min Fen, Nancy

Residential Address: 2F, No. 7, Lane 50, Section 3, Sau Long Road, Chung Wo Shi, Taipei, Taiwan.

HISTORY

The subject was established on 18th November, 1997 as a sole proprietorship concern owned by Ms. Chao Min Fen under the Hong Kong Business Registration Regulations.

Initially the subject was located at Room 1302, 13/F., Ginza Plaza, 2A Sai Yeung Choi Street South, Mongkok, Kowloon, Hong Kong, moved to the present address in May 2002.

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

OPERATIONS

Activities: Manufacturer, Importer and Exporter.

Lines: All kinds of jewellery products, silver products

Employees: 6. (Hong Kong)

200 (China)

Materials/Commodities: India, Thailand, Europe, etc.

Markets: North America, Europe, Taiwan, Southeast Asia

Annual Turnover: HK$50~55 million.

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 every year.

Condition: Keeping in a satisfactory condition.

Facilities: Making rather active use of general banking facilities.

Payment: Met trade commitments as required.

Commercial Morality: Satisfactory.

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

Standing: Normal.

GENERAL

Large Sun Trading Co. is a sole proprietorship set up and owned by Ms. Nancy Chao Min Fen who is a Taiwan businesswoman.

The subject is a diamond, silver and jewellery product trader and manufacturer. The followings are its main products: 925 sterling silver pendants, bracelets, necklaces, earrings,

Its factory known as Large Sun Jewelry Mfy. Co. Ltd. [Large Sun] is in Zhongshan City, Guangdong Province, China.

Large Sun was well established in Taiwan in 1989 and moved to Zhongshan City of Guangdong in 1992.

Employing about 200 workers, Large Sun occupies over 7,000 sq.m. In 2005, Large Sun got the ISO 9001 certification.

Raw materials are imported from India, Thailand, Europe, etc. Prime markets are North America, Europe, Taiwan, Southeast Asia, etc. Business is normal.

The annual sales turnover of the subject ranges from HK$50 to 55 million. Making a small profit every year.

The subject’s business is chiefly handled by Ms. Nancy Chao Min Fen. Sometimes, she is stationing at the China factory. However, most of the time she is in Hong Kong.

The contact person of the subject in Hong Kong is a Ms. Yang.

The history of the subject in Hong Kong is over 16 years and eight months.

On the whole, consider it good for normal business engagements.

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.61.06
UK Pound	1	Rs.101.84
Euro	1	Rs.81.56

INFORMATION DETAILS

Analysis Done by :	SUB
Report Prepared by :	NIT

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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