INFORM REPORT
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Report Date : |
14.06.2014 |
IDENTIFICATION DETAILS
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Name : |
SHANGHAI
GENERAL DIAMOND CO., LTD. |
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Registered Office : |
Room a305, Shanghai Diamond Exchange Center Building, no. 1701 Century Boulevard, Pudong New Area, Shanghai city, 200120 PR |
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Country : |
China |
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Financials (as on) : |
31.12.2013 |
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Date of Incorporation : |
18.03.2008 |
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Com. Reg. No.: |
310115001061358 |
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Legal Form : |
Limited
Liabilities Co. |
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Line of Business : |
Subject includes selling jewellery, importing and exporting
goods and technology. |
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No. of Employees |
02 |
RATING & COMMENTS
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MIRA’s Rating : |
B |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
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Status : |
Moderate |
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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
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Country Name |
Previous Rating (31.12.2013) |
Current Rating (31.03.2014) |
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China |
A2 |
A2 |
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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 |
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
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Source
: CIA |
Company
name and address
SHANGHAI GENERAL DIAMOND
CO., LTD.
ROOM A305, SHANGHAI DIAMOND EXCHANGE CENTER
BUILDING, NO. 1701 CENTURY BOULEVARD, PUDONG NEW AREA,
SHANGHAI CITY, 200120 PR CHINA
TEL: 86 (0) 21-56666569/65222888-8043
FAX: 86 (0) 21-65402263/61003268
EXECUTIVE
SUMMARY
INCORPORATION DATE :
MARCH 18, 2008
REGISTRATION NO. : 310115001061358
REGISTERED LEGAL FORM :
LIMITED LIABILITIES CO.
CHIEF EXECUTIVE :
MR. SUN GUOHAO (CHAIRMAN)
STAFF STRENGTH : 2
REGISTERED CAPITAL :
CNY 1,500,000
BUSINESS LINE :
TRADING
TURNOVER :
CNY 46,870,000 (AS OF DEC. 31, 2013)
EQUITIES :
CNY 3,440,000 (AS OF DEC. 31, 2013)
PAYMENT : AVERAGE
MARKET CONDITION :
AVERAGE
FINANCIAL CONDITION :
FAIRLY STABLE
OPERATIONAL TREND :
STEADY
GENERAL REPUTATION :
AVERAGE
EXCHANGE RATE : CNY 6.2145=USD 1
Adopted abbreviations:
ANS - amount not stated
NS - not stated
SC - subject company (the company inquired by you)
NA - not available
CNY – China Yuan Ren Min Bi
Note: the given cell phone 0086-13701626077 belongs to SC’s employee; when we dialed the number, the man answered the phone told us that he did not know the given name (Lunder Group of Shanghai Arts & Crafts).
SC was registered as a one-person limited liability company at local Administration for Industry & Commerce (AIC-The official body of issuing and renewing business license) on March 18, 2008 and later was changed into current ownership.
Company Status: Limited liabilities co. This form of business in PR
China is defined as a legal person. No more than fifty shareholders
contribute its registered capital jointly. Shareholders bear limited
liability to the extent of shareholding, and the co. is liable for its
debts only to extent of its total assets. The characteristics of this form
of co. are as follows: Upon the establishment of the
co., an investment certificate is issued to the each of shareholders. The board of directors is
comprised of three to thirteen members. The minimum registered capital
for a co. is CNY 30,000. Shareholders may take their
capital contributions in cash or by means of tangible assets or intangible
assets such as industrial property and non-patented technology. Cash contributed by all
shareholders must account for at least 30% of the registered capital. Existing shareholders have
pre-exemption right to purchase shares of the co. offered for sale by the
other shareholders and to subscribe for the newly increased registered
capital of the co.
SC’s registered business scope includes selling jewellery, importing and exporting goods and technology.
SC is mainly engaged in selling jewellery.
Mr. Sun Guohao is legal representative and chairman of SC at present.
SC is known to have approx. 2 employees at present.
SC is currently operating at the above stated address, and this address houses its operating office in the commercial zone of Shanghai. Our checks reveal that SC rents the total premise, but SC’s accountant refused to release the gross area.
Note: SC is also known to have another office in Shanghai:
No. 52 Duolun Road, Hongkou District, Shanghai
www.jilidiamond.com The design is professional and the content is well organized. At present it is in Chinese version.
Email: generaldiamond@126.com
Changes of its registered information are as follows:
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Date of change |
Item |
Before the change |
After the change |
|
Unknown |
Legal form |
One-person Limited Liability Company |
Present one |
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Legal representative |
Feng Yang |
Present one |
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Shareholders & % of shareholding |
Shanghai Arts & Crafts Gem & Jewellery Imp. & Exp. Co., Ltd. 100% |
Present ones |
Organization Code: 672687650
Subject passed the annual inspection of 2012 with Administration for Industry & Commerce.
For the past two years there is no record of litigation.
MAIN SHAREHOLDERS:
Name %
of shareholdings
Shanghai Foreign Trade Enterprises Co., Ltd. 90
Wang Yuqing and other 12 individuals 10
Shanghai Foreign Trade Enterprises Co., Ltd.
-------------------------------------------------------
Reg. No.: 310104000019293
Legal representative: Gao Wenwei
Incorporation date: March 1, 1988
Web: www.shftco.com
Legal Representative and Chairman:
Mr. Sun Guohao is currently responsible for the overall management of SC.
Working Experience(s):
At present Working in SC as legal representative and chairman
Also working Shanghai Gloves & Headwear Import &
Export Co., Ltd. and Shanghai Arts & Crafts Gem & Jewellery Imp. &
Exp. Co., Ltd. as legal representative
Directors:
Mao Yunchang
Feng Yang
Supervisors:
Chen Zhian
Yang Xiaomin
SC is mainly engaged in selling jewellery.
SC’s products mainly include: jewellery.
SC sources its materials 100% from overseas markets. SC sells 100% of its products in domestic market.
The buying terms of SC include Check, L/C, T/T and Credit of 30-60 days. The payment terms of SC include Check, T/T, and Credit of 30-60 days.
Note: SC refused to release its major suppliers and clients.
Shanghai Gloves & Headwear Import & Export Co., Ltd.
Shanghai Arts & Crafts Gem & Jewellery Imp. &
Exp. Co., Ltd.
Shanghai
General Jewellery Co., Ltd. (literal translation)
Shanghai Eastern
Resources Arts & Crafts Co., Ltd.
Shanghai Art Craft & Daily Articles Imp. Exp. Co., Ltd.
Etc.
Overall payment appraisal:
( ) Excellent ( ) Good (X) Average ( ) Fair ( ) Poor ( ) Not yet 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.
SC’s management declined to release its bank details.
Balance Sheet
Unit: CNY’000
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As of Dec. 31, 2013 |
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Cash & bank |
980 |
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Inventory |
5,440 |
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Accounts receivable |
9,750 |
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Advances to suppliers |
0 |
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Other accounts receivable |
410 |
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Other current assets |
0 |
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------------------ |
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Current assets |
16,580 |
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Fixed assets net value |
0 |
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Intangible and other assets |
0 |
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------------------ |
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Total assets |
16,580 |
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============= |
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Short loans |
0 |
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Accounts payable |
12,640 |
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Advances from clients |
0 |
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Accrued payroll |
0 |
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Taxes payable |
0 |
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Other accounts payable |
500 |
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Other current liabilities |
0 |
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------------------ |
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Current liabilities |
13,140 |
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Long-term liabilities |
0 |
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------------------ |
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Total liabilities |
13,140 |
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Equities |
3,440 |
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------------------ |
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Total liabilities & equities |
16,580 |
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============= |
Income Statement
Unit: CNY’000
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As of Dec. 31, 2013 |
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Turnover |
46,870 |
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Cost of goods sold |
52,990 |
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Sales expense |
140 |
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Management expense |
40 |
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Finance expense |
-680 |
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Subsidy income |
6,350 |
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Assets impairment loss |
-30 |
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Profit before tax |
760 |
|
190 |
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Profits |
570 |
Important Ratios
=============
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As of Dec. 31, 2013 |
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*Current ratio |
1.26 |
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*Quick ratio |
0.85 |
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*Liabilities to assets |
0.79 |
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*Net profit margin (%) |
1.22 |
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*Return on total assets (%) |
3.44 |
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*Inventory /Turnover ×365 |
42 days |
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*Accounts receivable/Turnover ×365 |
76 days |
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*Turnover/Total assets |
2.83 |
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* Cost of goods sold/Turnover |
1.13 |
PROFITABILITY:
AVERAGE
The turnover of SC appears average in its line.
SC’s net profit margin appears average.
SC’s return on total assets appears average.
SC’s cost of goods sold is high, comparing with its turnover.
LIQUIDITY: AVERAGE
The current ratio of SC is maintained in a normal level.
SC’s quick ratio is maintained in a normal level.
The inventory of SC appears average in 2013.
The accounts receivable of SC appears fairly large in 2013.
SC has no short-term loan in 2013.
SC’s turnover 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
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.59.48 |
|
|
1 |
Rs.100.93 |
|
Euro |
1 |
Rs.80.71 |
INFORMATION DETAILS
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Analysis Done by
: |
RAS |
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Report Prepared
by : |
NIS |
RATING EXPLANATIONS
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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 |
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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 |
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|
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 |
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|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
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|
-- |
NB |
New Business |
-- |
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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.