MIRA INFORM REPORT

Report Date :

03.01.2014

IDENTIFICATION DETAILS

Name :	LOTUS STAR LTD.
Registered Office :	Room 1201, 12/F., Hart Avenue Plaza, 5-9 Hart Avenue, Tsimshatsui, Kowloon
Country :	Hong Kong
Date of Incorporation :	10.07.2009
Com. Reg. No.:	50881543
Legal Form :	Private Limited Company.
Line of Business :	Subject is engaged in manufacturing loose diamonds like marquise, pears, tappers, buggets and rose cut diamonds
No. of Employees :	03

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 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

Company name

LOTUS STAR LTD.

Company ADDRESS

Room 1201, 12/F., Hart Avenue Plaza, 5-9 Hart Avenue, Tsimshatsui, Kowloon, Hong Kong.

PHONE: 852-2364 4777, 3175 5343, 5189 9399

FAX: 852-2364 7999

MANAGEMENT

Managing Director: Mr. Prit Saileshbhai Savani

SUMMARY

Incorporated on: 10th July, 2009.

Organization: Private Limited Company.

Capital: Nominal: HK$1,000,000.00

Issued: HK$1,000,000.00

Business Category: Diamond Trader.

Employees: 3.

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

Banking Relation: Satisfactory.

COMPANY ADDRESS

Registered Head Office:-

Room 1201, 12/F., Hart Avenue Plaza, 5-9 Hart Avenue, Tsimshatsui, Kowloon, Hong Kong.

BUSINESS REGISTRATION NUMBER

50881543

COMPANY FILE NUMBER

1352271

MANAGEMENT

Managing Director: Mr. Prit Saileshbhai Savani

CAPITAL

Nominal Share Capital: HK$1,000,000.00 (Divided into 1,000,000 shares of HK$1.00 each)

Issued Share Capital: HK$1,000,000.00

SHAREHOLDERS

(As per registry dated 10-07-2012)

Name		No. of shares
Prit Saileshbhai SAVANI		500,000
Shail Vijaykumar SHAH		500,000
		––––––––
	Total:	1,000,000 =======

DIRECTORS

(As per registry dated 10-07-2012)

Name (Nationality)	Address
Prit Saileshbhai SAVANI	Flat G, 16/F., Luna Court Building, 55 Kimberly Road, Tsimshatsui, Kowloon, Hong Kong.
Shail Vijaykumar SHAH	Flat G, 16/F., Luna Court Building, 55 Kimberly Road, Tsimshatsui, Kowloon, Hong Kong.

SECRETARY

(As per registry dated 10-07-2012)

Name	Address
Bayani Divino Bautista PONCE	Flat A, 8/F., Tower 5, Caribbean Coast, 2 Kin Tung Road, Tung Chung, Lantau Island, Hong Kong.

HISTORY

The subject was incorporated on 10th July, 2009 as a private limited liability company under the Hong Kong Companies Ordinance.

Formerly the subject was located at Unit A, 16/F., Brilliant Court, 78 Kimberley Road, Tsimshatsui, Kowloon, Hong Kong, moved to Unit E2, 6/F., Summit Building, 30 Man Yue Street, Hunghom, Kowloon, Hong Kong. with effect from 9th October, 2009. It moved to the present address in early 2011.

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.

Employees: 3.

Commodities Imported: India, Europe, other Asian countries, etc.

Markets: Hong Kong, Japan, Taiwan, Middle East, other Asian countries, etc.

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

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

FINANCIAL INFORMATION

Nominal Share Capital: HK$1,000,000.00 (Divided into 1,000,000 shares of HK$1.00 each)

Issued Share Capital: HK$1,000,000.00

Profit or Loss: Made a small profit in 2011 & 2012.

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

Having issued 1 million ordinary shares of HK$1.00 each, Lotus Star Ltd. formerly was wholly-owned by Sujalkumar Kerulbhai Mehta who was an Indian. Now, it is equally owned by Mr. Prit Saileshbhai Savani and Mr. Shail Vijaykumar Shah. Residing in Hong Kong, Savani and Shah are the directors of the subject. They are Hong Kong ID Card holders and have got the right to reside in Hong Kong permanently.

The subject has moved to the present address since early 2011.

The subject is a diamond importer, exporter and wholesaler. It is engaged in manufacturing loose diamonds like marquise, pears, tappers, buggets and rose cut diamonds. It also trades in GIA Diamonds, Carat size Diamonds and IGI Diamonds.

Most of the commodities are imported from Mumbai, India. Prime markets are Hong Kong, Japan, Taiwan, other Asian countries, the Middle East, the United States, etc. Business keeps on improving.

Shah has had a number of affiliated diamond suppliers in Mumbai so that he is responsible for the supplying of the commodities to the subject.

The individual secretary of the subject Bayani Divino Bautista Ponce is also an Indian who is a Hong Kong ID card holder. To our knowledge, Ponce is one of the directors of a Hong Kong-registered firm Facets Hong Kong Ltd., and is also the secretary of a number of Indian firms in Hong Kong.

In order to penetrate the international market further, the subject has taken part in fairs and exhibitions held in Hong Kong and other foreign large cities. For instance, it took part in “HKTDC Hong Kong International Jewellery Show 2013” which had been held in Hong Kong Convention and Exhibition Centre, Wanchai, Hong Kong during the period of 5th to 9th March, 2013. Besides, it is going to take part in “HKTDC Hong Kong International Jewellery Show 2014” which will be held in Hong Kong Convention and Exhibition Centre, Wanchai, Hong Kong during the period of 5th to 9th March, 2014. Its booth No. is S421-11.

As the history of the subject in Hong Kong is about four years, on the whole, 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.61.90
UK Pound	1	Rs.102.74
Euro	1	Rs.85.16

INFORMATION DETAILS

Report Prepared by :

MNL

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

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