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Report Date : |
11.07.2014 |
IDENTIFICATION DETAILS
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Name : |
STS GEMS
LTD. |
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Registered Office : |
Unit 614, 6/F., Heng Ngai Jewelry Centre, |
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Country : |
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Date of Incorporation : |
02.05.1986 |
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Com. Reg. No.: |
10284458 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
· Engaged in trading of all kinds of diamonds and gemstones engaged in Outsourcing Products for the
Group and also marketing
Jewellery Products worldwide. subject is members of the STS Group. |
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No of Employees : |
08 (Including
associate) |
RATING & COMMENTS
|
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 31, 2014
|
Country Name |
Previous Rating (31.12.2013) |
Current Rating (31.03.2014) |
|
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A1 |
A1 |
|
Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low Risk |
A2 |
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Moderate Low Risk |
B1 |
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Moderate Risk |
B2 |
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Moderate High Risk |
C1 |
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High Risk |
C2 |
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Very High Risk |
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 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 |
STS GEMS
LTD.
Unit 614, 6/F., Heng Ngai Jewelry Centre, 4 Hok Yuen Street East, Hunghom, Kowloon, Hong Kong.
PHONE: 852-2367 5066
FAX: 852-2739 4982
E-MAIL: info@stsgems.com.hk
Managing Director: Mr. Sunil Agrawal
Incorporated on: 2nd May, 1986.
Organization: Private Limited Company.
Issued Capital: HK$8,750,000.00
Business Category: Diamond & Gemstone Trader.
Group Revenue: INR 9,305.6 million (Year ended 31-03-2013)
Employees: 8. (Including associate)
Main Dealing Banker: Belgian Bank, Hong Kong Branch. [Business was taken over by Industrial & Commercial
Bank of China (Asia) Ltd.]
Banking Relation: Good.
Registered Head Office:-
Unit 614, 6/F., Heng Ngai Jewelry Centre, 4 Hok Yuen Street East, Hunghom, Kowloon, Hong Kong.
Holding Company:-
Vaibhav Global Ltd., India.
[Formerly known as: Vaibhav Gems Ltd.]
Associated
Companies:-
Genoa Jewelers (St. Kitts) Ltd., West Indies.
Genoa Jewelers Ltd., British Virgin Islands.
Indo Mexico Co. S. De R.L De C.V., Mexico.
Jewel Gem USA Inc., US.
STS Creations Thai Ltd., Thailand.
STS Gems Japan Ltd., Japan.
STS Gems Thai Ltd., Thailand.
STS Gems USA Inc., US.
STS Holdings Ltd., Hong Kong.
STS Jewels Inc., US.
The Jewellery Channel Inc., US.
The Jewellery Channel Ltd., UK.
10284458
0168685
Managing Director: Mr. Sunil Agrawal
HK$8,750,000.00
(As per registry
dated 02-05-2014)
|
Name |
|
No.
of shares |
|
Vaibhav Global Ltd. [Formerly Known as: Vaibhav Gems Ltd.] K-6B,
Fateh Tiba, Adarsh Nagar Jaipur, Rajasthan-302005, India. |
|
87,500 ===== |
(As per registry dated
02-05-2014)
|
Name (Nationality) |
Address |
|
Rizwan ULLAH |
House No. 722, Mohalla Patetan
Kazi, Ka Nala, Ghat Gate, Jaipur, Rajastha, India. |
|
Sunil AGRAWAL |
6/F., Po Yue Yuk Building, 61
Robinson Road, Hong Kong. |
(As per registry
dated 02-05-2014)
|
Name |
Address |
Co.
No. |
|
Lodestar Secretaries Ltd. |
13/F., Wah Kit Commercial Centre, 302 Des Voeux Road
Central, Hong Kong. |
0113023 |
The subject was incorporated on 2nd May, 1986 as a private limited liability company under the Hong Kong Companies Ordinance.
Apart from these, neither material change nor amendment has been ever traced and noted.
Activities: Diamond & Gemstone Trader.
Lines: All kinds of diamonds and gemstones
Employees: 8. (Including associate)
Commodities Imported: India, other Asian countries, etc.
Markets: Hong Kong, China, other Asian countries, Europe, etc.
Group
Revenue:
INR 5,375.0 million (Year ended 31-03-2011)
INR 6,748.2 million (Year ended 31-03-2012)
INR 9,305.6 million (Year ended 31-03-2013)
Terms/Sales: L/C or as per contracted.
Terms/Buying: As per contracted.
Issued Capital: HK$8,750,000.00
Mortgage or Charge: (See attachment)
Group Net Profit/(Loss): INR 431.0 million (Year ended 31-03-2011)
INR 685.1 million (Year ended 31-03-2012)
(INR 856.1 million) (Year ended 31-03-2013)
Group Profit or Loss: Group suffered from a great loss in FY2013.
Condition: Keeping in a normal manner.
Facilities: Making rather active use of general banking facilities.
Payment: Met trade commitments as contracted.
Commercial Morality: Satisfactory.
Banker: Belgian Bank, Hong Kong Branch. [Business was taken over by Industrial & Commercial
Bank of China (Asia) Ltd.]
Standing: Normal.
STS Gems Ltd. is a wholly-owned subsidiary of Vaibhav Global Ltd. [Vaibhav/Group] which is an India-based firm. The old name of Vaibhav was Vaibhav Gems Ltd. Its name changed on 29th November, 2012.
Vaibhav has had a subsidiary known as STS Jewels Inc. The subject belongs to STS group of companies.
The subject is a gemstone trader.
STS Group with headquarters in Austin, TX is amongst the well-known organizations in the colour gemstones and jewellery industry. Tanzanite Jewellery is STS Group’s specialty. So does the subject.
STS Group has a reservoir of over 1,800 skilled and trained employee worldwide. This includes resources in designing, manufacturing and distribution of jewellery and gemstones.
The subject has had an associated factory in Panyu District, Guangzhou City, Guangdong Province, China which is engaged in manufacturing all kinds of jewellery products and processing gemstones and diamonds.
Based in Rajasthan, India, Vaibhav is a listed firm in India. Incorporated in Jaipur, India in 1989, Vaibhav is today a professionally managed, end-to-end vertically integrated business organization.
Vaibhav started as a gemstone manufacturer and then in 1996-97, as a forward integration. It came out with IPO to establish a jewellery‑manufacturing unit for export of gem-studded gold jewellery. First unit was set up at Adarsh Nagar Jaipur in 1997. In the year 1999, it set up a new 100% Export Oriented Unit at Export Promotion Industrial Area, Sitapura, Jaipur. In 2002 it installed an Italian micro-weight gold chain manufacturing plant.
The subject is engaged in outsourcing products for the Group and also marketing jewellery products throughout the world.
The subject is one of the members of the STS Group.
STS Group with headquarters in Austin, TX (STS Jewels Inc.) is amongst the better-known organizations in the colour gemstones and jewellery industry. Tanzanite Jewellery is STS Group’s specialty.
Besides the subject, STS Group has an extensive Product Development team and infrastructure spread over New York, Bangkok and India.
From a humble beginning, the group has steadily expanded to be one of the most vertically integrated jewellery companies in the world. Today, the group has four plants in India and Thailand engaged in gemstone cutting and jewellery manufacturing, using casting and stamping operations. The latest addition is a state of art micro-weight rope chain manufacturing plant.
For the year ended 31st March, 2013, the revenues of the Group amounted to INR 9,305.6 million (2012: INR 6,748.2 million), Group made a great loss of INR 856.1 million (2012: Net Profit was INR 685.1 million). The Group had entered “Corporate Debt Restructuring Mechanism” [CDRM]. However, in April 2013 it exited CDRM.
According to the Group, it is taking measures and issues to prevent further losing in FY 2014. The Group believes it will made a profit in 2014.
The subject is fully supported by the Group. History in Hong Kong is over 28 years.
The subject is fully supported by the Group.
The director of the subject Mr. Sunil Agrawal is also the Chairman of the Group.
On the whole, consider the subject good for normal business engagements.
REMARK:
Brief personal
profile of the principal director:
Mr. Sunil Agrawal is the chairman of the Vaibhav Group of companies which is the parent company of STS Jewels Inc. Being a native of Jaipur, India, Agrawal received his Bachelor’s Degree from the University of Rajasthan in India, and his Executive MBA from Columbia University, New York. He founded the Vaibhav Group of companies in 1980 in Jaipur, India, and it remains one of the world’s few fully integrated jewellery companies. Agrawal has been instrumental in commercialization of gemstones such as Tanzanite, Pink Tourmaline, and Fire Opal and in the development of the Tanzanite Protocol, the voluntary code of conduct for the gemstone trade. He is a board member and past president of the Indian Diamond & Colored Gemstone Association.
|
Date |
Particulars |
Amount |
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25-07-2006 |
Instrument: Memorandum Property: Distinctive TD 1065 14-07-2006 120,285.00 16-10-2006 TD 1077 21-07-2006 80,000.00 23-10-2006 Mortgagee: Bank of Baroda, Hong Kong Branch. |
Loan or credit or other facilities |
|
27-09-2007 |
Instrument: Memorandum Property: Distinctive 91220300000036 15-07-2007 US$126517.03 15-10-2007 91220300000054 22-07-2007 US$84144.84 20-10-2007 Mortgagee: Bank of Baroda, Hong Kong Branch. |
Loan or credit or other facilities |
|
22-04-2010 |
Instrument: Memorandum Property: No.
of Receipts Date of
Issue Amount Due Date 91220300000036 03-01-2010 US$136,328.00 01-01-2011 91220300000367 06-10-2009 US$270,660,07 05-10-2010 91220300000379 27-10-2009 US$42,884,75 26-10-2010 91220300000975 12-07-2009 US$65,284.01 11-07-2010 Mortgagee: Bank of Baroda, Hong Kong Branch. |
Loan or credit or other facilities |
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.59.88 |
|
UK Pound |
1 |
Rs.102.59 |
|
Euro |
1 |
Rs.81.69 |
INFORMATION DETAILS
|
Analysis Done by
: |
KAR |
|
|
|
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Report Prepared
by : |
MNL |
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
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>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 |
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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.