MIRA INFORM REPORT

Report Date :

2^nd march, 2007

IDENTIFICATION DETAILS

Name :	ULTRA GEMS ISRAEL LTD.

Registered Office :	3 Jabotinsky Street, Diamond Exchange, Shimshon Building, Ramat Gan 52520 Israel.

Country :	Israel

Date of Incorporation :	08.11.1993

Com. Reg. No.:	51-187583-3

Legal Form :	Private Limited Company

Line of Business :	Importers, exporters, processors and marketers of small diamond stones.

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Satisfactory

Payment Behaviour :	Usually Correct

Litigation :	Clear

Company Name & Address

ULTRA GEMS ISRAEL LTD.

Telephone 972 3 613 64 80

Fax 972 3 613 34 65

3 Jabotinsky Street

Diamond Exchange, Shimshon Building

RAMAT GAN 52520 ISRAEL

HISTORY

A private limited company, incorporated as per file No. 51-187583-3 on the 8.11.1993.

SHARE CAPITAL

Authorized share capital of NIS 19,800.00 divided into: 19,800 ordinary shares of NIS 1.00 each, of which shares amounting to NIS 100.00 were issued.

SHAREHOLDERS

Subject is fully owned by Benjamin Muller.

SOLE DIRECTOR AND GENERAL MANAGER

Benjamin Muller (registered address: New York, USA).

BUSINESS

Importers, exporters, processors and marketers of small diamond stones.

Most of sales are for export.

Operating from office premises in 3 Jabotinsky Street, Diamond Exchange, 3 Jabotinsky Building (9^th Floor), Ramat Gan.

Having 8 employees.

MEANS

Financial data not forthcoming.

There are 3 charges for unlimited amounts registered on the company's assets, in favor of Bank Leumi LeIsrael Ltd.

ANNUAL SALES

Sales figures not forthcoming.

BANKERS

Bank Leumi LeIsrael Ltd., Diamond Exchange Branch (No. 629), Ramat Gan.

CHARACTER AND REPUTATION

Nothing unfavorable learnt.

Subject's owner and General Manager refused to disclose financial data on his business.

According to a report from November 2006, the diamonds branch is on the verge of a significant recuperation after the deep crisis it got into, the worst one for decades, which affected the profitability of Israeli diamond businesses. World sales towards Thanksgiving Day grew by 10% comparing to 2005. That already led to a rise in rough diamonds.

According to the Ministry of Industry and Trade, the local diamonds branch managed to stabilize the total volume of export of cut diamonds during 2006, a year that witnessed many local and global challenges, and end in the same level as 2005. In rough diamonds a decrease was noted, due to marketing motives, and as high prices made the trade in rough diamonds less attractive.

Total (net) export of cut diamonds from Israel in 2006 reached US$ 6.610 billion, a mere decrease of 1.5% from 2005 (US$ 6.709 billion). Exports (net) of rough diamonds were US$ 2.701 billion, a 23.2% decrease from 2005 (US$ 3.517 billion, which was a 20.6% increase from 2004).

Import of rough diamonds (net) also fell in 2006 by 11.4% (from 2005) to US$ 4.709 billion, while import of cut diamonds (net) increased in 2006 by 3.3% reaching US$ 4.025 billion.

The USA is the main market for Israel’s export of cut diamonds (around 60%). The secondary markets are Hong Kong (15%), Belgium (7%), Switzerland (5%) and the UK (2%).

Import rough diamonds noted a 23.7% decrease in January 2007, due to a shortage in world markets, following the lowering in sales by DE BEERS and the tough winter in Africa that hurt mining. Nevertheless, the officials in the branch report a 11.7% increase in import of polished diamonds in January 2007.

SUMMARY

Notwithstanding the refusal to disclose any details, considered good for trade engagements.

Note: subject's correct address (street No. 3, not 1).

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