MIRA INFORM REPORT

Report Date :

26^th February, 2007

IDENTIFICATION DETAILS

Name :	FANCY IMPEX O/B MARVAL GEMS (HONG KONG) LTD.
Registered Office :	Rm 1606, 16/F, Hart Avenue Plaza, 5-9 Hart Avenue, Tsimshatsui, Kowloon, Hong Kong.
Country :	Hong Kong
Date of Incorporation :	29.12.1999
Com. Reg. No.:	699297
Legal Form :	Private
Line of Business :	Engaged in trading of diamond.

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 :	Regular
Litigation :	Clear

Company Name & Address

FANCY IMPEX O/B MARVAL GEMS (HONG KONG) LTD.

RM 1606, 16/F, HART AVENUE PLAZA, 5-9 HART AVENUE, TSIMSHATSUI, KOWLOON, HONG KONG.

TEL : 852 27239789/27210114

FAX : 852 27244544

EXECUTIVE SUMMARY

INCORPORATION DATE : 29-12-1999

REGISTRATION NO. : 699297

REGISTERED LEGAL FORM : PRIVATE

CHIEF EXECUTIVE : MEHTA NIRAJ SURESH (MANAGING DIRECTOR)

STAFF STRENGTH : 4.

AUTHORIZED CAPITAL : HK$1,000,000 = 100,000 SHARES @ HK$10.-

PAID-UP CAPITAL : HK$1,000,000

BUSINESS LINE : TRADING OF DIAMOND

TURNOVER : N/A (AS OF DEC. 31, 2005)

EQUITIES : N/A (AS OF DEC. 31, 2005)

PAYMENT : AVERAGE

RECOMM. CREDIT RANGE : MODERATE AMOUNT

MARKET CONDITION : COMPETITIVE

FINANCIAL CONDITION : STABLE

OPERATIONAL TREND : FAIRLY STEADY

GENERAL REPUTATION : AVERAGE

EXCHANGE RATE : HKD 7.81333 = USD1 AS OF 2007-2-14

Adopted abbreviations:

ANS - amount not stated

NS - not stated

SC - subject company (the company inquired by you)

NA - not available

M - million

HKD – Hong Kong Dollars

SC is a private limited company registered under incorporation file no. 699297 on 29-12-1999.

SC's shareholders & directors are shown to be as follows:

Shareholders (as at 29-12-2006) Number of shares held

Modi Rajesh Babubhai 99,999

Modi Hina Rajesh 1

---

100,000

====

Directors (as at 29-12-2006)

Mehta Niraj Suresh / P952832(A)

Modi Rajesh Babubhai / P192645(8)

The above registration information is based on SC's annual return filed at Companies Registry within the last 2 years.

No material change or amendment regarding SC has been traced & noted within last 2 years.

Total number of employees : 4.

Location : Maintaining its office at the heading business address which occupies a gross area of 800 square feet at a commercial building in a commercial & residential district.

Condition inside the premises during our visit : Normal.

Office/factory layout : Standard.

Overseas affiliates:

--------------------------

- Fanci Source Inc. (in USA)

- Marval Gems B.V.B.A. (in Belgium)

- Marval Gems (Israel) Ltd. (in Israel)

- Marval Gems (Thailand) Ltd. (in Thailand)

This section will contain the civil litigations & winding-up petitions filed against SC for the last 6 years (as stored in our database), and the mortgage/charge filed by SC for the last 2 years. In Hong Kong, creation of such mortgages/charges by an unlimited co is not required to be registered in the public records.

Civil litigation/winding-up petitions : None in our database.

Mortgage/charge record(s) : None filed since its incorporation date.

Management advised that SC is affiliated to Minestone whose partial information is as follows:

Year established : NA

Registered/business address : 514 Panchratna, 5/F, Opera House, Mumbai 400004, India

Business line : The co is one of the India's prominent manufacturer & exporter of fancy cut diamond. It has 5 major factories located in 4 cities in India and has subsidiaries & representative office located in USA, Belgium, Israel, Thailand & HK.

No. of employees : 2,000 (group)

Civil litigation & winding-up petition records : None in our database

Turnover : NA

Contact information of the said co.:

- Tel: 0091-22-23632661

- Fax: 0091-22-23631817

Mehta Niraj Suresh, managing director:

- In his 40's & married

- He is by Indian nationality

Currently active in SC's day-to-day operations & is responsible for its management.

Registered residential address: Flat A, 10/F, South Sea Apartment, 81 Chatham Rd, Tsimshatsui, Kowloon, HK.

Property ownership: Current land search indicates the said premises ownership as follows:

- Owner(s) : Lai Ming Kit & Leung Oi Kum

- Date of purchase & consideration : 16-8-1999 / HK$2.5M

- Date of mortgage & secured amount : NA

- Mortgagee : NA

Credit history check : This refers to a check of our database whether the said person has been involved in any of the following records stored by us within the last 6 years:

Civil litigation as defendants : None in our database

Bankruptcy/winding-up petitions : None in our database

Delinquent payment records : None in our database

Debt collection records : No overdue amount owed by the said person was placed to us for collection

Modi Rajesh Babubhai, director:

- He is by Indian nationality

Currently residing in Israel & only visits Hong Kong for business occasionally.

Registered residential address: #5/5 Gilaad St, 2/F, Ramat Gan 52250, Israel.

Credit history check : This refers to a check of our database whether the said person has been involved in any of the following records stored by us within the last 6 years:

Civil litigation as defendants : None in our database

Bankruptcy/winding-up petitions : None in our database

Delinquent payment records : None in our database

Debt collection records : No overdue amount owed by the said person was placed to us for collection

Ownership background appraisal:

Rating : 3 Obtained scores : 60 (see explanatory notes below)

Keys : 1 : scores 81-100 : Excellent

2 : scores 61-80 : Good

3 : scores 46-60 : Average

4 : scores 21-45 : Fair

5 : scores 01-20 : Poor

The rating indicates the personal financial & operational strength of SC's major principals. It is calculated from a composite of scores obtained from the following 5 factors which carry equal weight in our analysis:

Personal financial strength, credit history & trade reputation, business experience & track record, market connection and management skill.

Business categories:

SC is engaged in trading of diamond.

Items available include a wide range of fancy cut & round diamond (such as as marquises, pearl shapes, ovals, baggets, heart shapes, trillions & princess cuts).

Principal purchases:

Major types of sourcing : Diamond

Local--type of suppliers : Nil

Buying terms : Nil

Overseas--supplying countries : India, Belgium, Israel & Thailand

Buying terms : T/T & L/C

Principal market:

Local--type of customers : Manufacturers, wholesalers & exporters

Selling terms : COD & credit of 30-60 days

Overseas--buying countries : USA, Europe & other Asian Pacific countries

Selling terms : T/T & L/C

SC is not known to have any subsidiary at present.

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 records and our debt collection record concerning SC.

Trade payment experience : A trade enquiry currently conducted with SC's supplier(s) reveal the following:

First Second

Type of supplies : Merchandise

Time known : 5 years

Selling terms : Net 30 days

Total purchases (last 6 months) : $2.1M

Present balance : $0.88M

Payment record : 3

Payment record keys : 1 = Prompt : Payment made before the credit period expires

2 = As agreed terms : Payment made upon due date

3 = Slightly slow but acceptable : Payment made 5 to 20 days beyond agreed terms

4 = Slow : Payment made 16 to 45 days beyond agreed terms

5 = Poor : Payment made over 45 days beyond agreed terms

6 = Payment slowing down : Payment formerly prompt but slowing down in recent months

7 = No comment : Account is newly opened & record is not yet established

Note : In some instances, payment beyond terms can be the result of disputes over merchandise, lost invoices, disputed accounts & etc.

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 relations are maintained principally with:

- HSBC

- Bank of India

Upon a current contact, Mehta Niraj Suresh, SC's managing director, declined forwarding any financial information on the ground that it is the company's policy not releasing any data to a third party without the benefit of knowing the identity of the inquiring party.

As per current co. search, total amount of indebtedness of SC in respect of all mortgages and charges which are required to be registered with Companies Registry as at 29-12-2006 was NA.

SC is considered a normally advancing concern with steady customers and good base to meet its trade engagements. Credit in the range of moderate amount can be considered.

-- Asset Tracing --

Upon our current investigation, our database & sources consulted indicate that SC was not involved in any property transaction (both purchase & disposal) in Hong Kong for the last 6 years.

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	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	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
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

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%)

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