MIRA INFORM REPORT

Report Date :

02.04.2011

IDENTIFICATION DETAILS

Name :	BELLINK DIAMOND (SHANGHAI) CO LTD

Registered Office :	904A, South Tower, China Diamond Exchange Center, No.1701 Century Avenue, Pudong District, Shanghai, Zip Code:200100

Country :	China

Financials (as on) :	31.12.2009

Date of Incorporation :	15.01.2002

Com. Reg. No.:	310115400088832

Legal Form :	Wholly Foreign-Owned Enterprise

Line of Business :	Wholesale of diamond

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
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

Status :	Moderate
Payment Behaviour :	Unknown
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 – December 31, 2010

Country Name

Previous Rating

(30.09.2010)

Current Rating

(31.12.2010)

China

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

Company name & address

BELLINK DIAMOND (SHANGHAI) CO LTD

904A, South Tower, China Diamond Exchange Center, No.1701 Century Avenue, Pudong District, Shanghai

200100

Tel : 86 21 50471103/13501765378

Fax 86 21 62778453

Website --

Currency in this report is Chinese Yuan unless otherwise stated.

Exchange Rate: 1 USD=6.56 Chinese Yuan

"--"in this report indicates "unavailable" due to insufficient information or "no comments"

EXECUTIVE SUMMARY

DATE OF establishment jan.15^th, 2002

Aic Registration No. : 310115400088832

REGISTERED LEGAL FORM : Wholly foreign-owned enterprise

REGISTERED CAPITAL : USD 200,000.00

main BUSINESS : wholesale of diamond

TURNOVER : 21,287,000.00 (As of 2009)

net profit -262,000.00 (As of Dec.31th, 2009)

total assets : 78,750,000.00 (As of Dec.31th, 2009)

net worth : -55,000.00 (As of Dec.31th, 2009)

employees : 10

CHIEF EXECUTIVE Li Lingxian

import and export

permits : yes

base CREDIT limit : 0 Chinese Yuan

EXCHANGE RATE : 1 Usd=6.56 CNY (Mar.30^TH, 2011)

Registered Address: 904A, South Tower, China Diamond Exchange Center, No.1701 Century Avenue, Pudong District, Shanghai, Zip Code:200100

Business Address: 904A, South Tower, China Diamond Exchange Center, No.1701 Century Avenue, Pudong District, Shanghai, Zip Code: 200100

Telephone: 86 21 50471103

Fax: 86 21 62778453

SIC Code (China): 6346 wholesale of ornaments, arts crafts and collections

REGISTRATION

Date of Establishment	jan.15^th, 2002
Registry	Administration Bureau of Industry and Commerce - Shanghai
Legal Representative	Li Lingxian
AIC Registration Number	310115400088832
Registered Legal Form	Wholly foreign-owned enterprise
Registered Capital	USD 200,000.00
Operating Period	From jan.15^th, 2002 to jan.14^th, 2012
Business Scope	Diamond (excluding gold and silver) transactions within the diamond exchange center; Import and export of diamond (with certificate if needed)
Changes in Registration	1. May 15^th, 2010 Subject’s address was changed to the present address from G003, 4F, JINMAO Building, No.88 Century Avenue, Pudong, Shanghai. 2. Mar.11^th, 2002 Subject’s shareholders were changed from CH. BERKOVIC BVBA and D&L DIAMONDS BVBA To D&L DIAMONDS BVBA

Wholly foreign-owned enterprise

This form of business in PR China is defined as a legal person. It is a limited co. established within the territories of PR China with capital provided totally by the foreign investors. More than one foreign investor may jointly invest in a wholly foreign-owned enterprise. The investing party/parties solely exercise management, reap profit and bear risks and liabilities by themselves. This form of companies usually have a limited duration is extendible upon approval of Examination and Approval Authorities.

REGISTRATION INFO: AVAILABLE

FINANCIAL REPORTS: AVAILABLE

FIELD INVESTIGATION

1. Subject’s income comes mainly from sales of diamond. Its sales are developed directly to the end users. The industry of diamond sales is an industry with fierce competition. With long history but average scale, subject’s popularity is under development. Generally speaking, subject’s competitiveness is average in the local place.

2. Shanghai, subject’s location is the largest city directly under the governing of Chinese government. It is the financial and economic center of China. The high economic development level provides enterprises here with great opportunities as well as big challenges. As an enterprise selling diamond, subject enjoys certain favorable policies provided by the local government.

SHAREHOLDERS AND SHARES

As indicated in the following table:

Shareholder	Capital Subscribed	Percentage
D&L DIAMONDS BVBA	USD 200,000	100%
Total	USD 200,000	100%

Shareholder	Way of investment	Paid-up Percentage
D&L DIAMONDS BVBA	Capital	100%

Background of major shareholder

Name	D&L DIAMONDS BVBA
Country	Belgium

AFFILIATE(S)

After checking with the industry and commerce channels, no affiliates of SC is found.

MANAGEMENT

Name	Li Lingxian
Title	Executive director
Nationality	Belgium

Name	Wang Yuan (王苑)
Title	Supervisor

NUMBER OF EMPLOYEES

Employees: 10

Recent Recruitment：No

BANKERS INFORMATION

Bank Name	Bank of China – JINMAO Building (Shanghai) Sub-branch
Account No. for Chinese Yuan	1001164809016201387
Title of the person investigated	Reception staff
Telephone	0086 21 38780368
Comment	The investigated person confirmed subject opened an account in the above bank, but refused to check the above account in the reason of keeping secret for the clients.

OFFICE FACILITIES

Geographic Location: SC is located in 904A, South Tower, China Diamond Exchange Center, No.1701 Century Avenue, Pudong District, Shanghai. The traffic condition around the premise is good.

Property Ownership: rented

TRADEMARKS

No trademark record was found after check with the National Trademark Management Bureau.

PATENTS

After checking with the National Patent Information Center, no patent record of subject was found.

MAIN PRODUCTS & SERVICES

Main business	Sales of diamond
Products and services	Subject’s products include rough diamond, finished diamond, diamond ornaments etc.

SALES INFORMATION

Percentage of domestic sales	100%
Regions	Shanghai and the surrounding area
Major domestic clients	SHANGHAI XING SHI LI JEWELLERY CO., LTD; SHANGHAI DINGMAO JEWELLERY CO., LTD etc.
Sales Terms:	Prompt payment; on credit
Subject’s products are all sold domestically. Its clients are mainly large stores in Shanghai.
The above information was confirmed by SC’s employee on Mar.30^th, 2011.

PURCHASE INFORMATION

Main Commodities Purchased	Bare diamond, office supplies etc.
Number of Major Suppliers	More than 2
Major Suppliers	EUROSTAR DIAMOND TRADERS, BRINKS DIAMOND & JEWELRY etc.
Main Terms of Payment	Domestic: Prompt payment; on credit Import: L/C, T/T
Subject company mostly purchases diamond from foreign suppliers. Its purchasing channel is fixed and it maintains good relationship with its suppliers.
The above information was confirmed by SC’s employee on Mar.30^th, 2011.

CREDIT

Subject’s suppliers are most foreign suppliers. Therefore, no comments from the suppliers can be provided in the report.

LITIGATION RECORDS

After checking with China court website, local court website and other major searching websites, no litigation records related to subject in the recent 3 years was found.

FINANCE

Balance Sheet (Unit: 1,000 Chinese Yuan):

	Dec. 31^st, 2007	Dec. 31^st, 2008	Dec. 31^st, 2009
Current assets
Money capital	547	19	15
Notes receivable
Net ball of account receivable	30,658	56,453	77,545
Payment in advance
Account receivable
Other account receivable	1,200	1,107	1,187
Inventory	272	272
Expenses to be deferred
Total current Assets	32,677	57,851	78,747
Long term investment
Long term investment
Fix assets
Original value of fixed assets	47	47	47
Accumulated depreciation	41	43	44
Net value of Fixed Assets	6	4	3
Project being constructed
Total fixed assets	6	4	3
Intangible assets
Intangible assets
Deferred assets
Total intangible assets and deferred assets
Total assets	32,683	57,855	78,750
Current liabilities
Short term loans
Notes payable
Account payable	32,248	57,339	78,018
Deposit received			261
Other account payable	221		619
Wages payable
Welfare payable
Tax unpaid	-110	-120	-93
Accrued expenses
Other current liabilities
Total current liabilities	32,359	57,648	78,805
L/T liabilities
L/T loan
L/T account payable
Total L/T liabilities	0	0	0
Total liabilities	32,359	57,648	78,805
Owner’s interest
Paid-up capital	1,658	1,658	1,658
Contributed surplus
Surplus reserves
Undistributed profits	-1,334	-1,451	-1,713
Total owner’s interest	324	207	-55
Liabilities and owner’s interest	32,683	57,855	78,750

Income Statement (Unit: 1,000):

	Dec. 31^st, 2007	Dec. 31^st, 2008	Dec. 31^st, 2009
Main business income	31,562	67,554	21,287
Main business cost	31,746	67,611	21,362
Tax and associate charge
Main business profit	-184	-57	-75
Other business profit
Asset depreciation
Operation expenses	111	9	1
- management expenses	207	288	135
Financial expenses	-127	-167
Operation profit	-375	-187	-211
Investment profit
Non business income	231	69	28
-Non business expenses			79
Total profit	-144	-118	-262
-Income tax	0	0	0
Net profit	-114	-118	-262

Note: subject’s tax unpaid of 2008 and 2009 is negative because it prepaid more tax than needed in the previous year.

Important Ratios:

	2007	2008	2009
Return on net assets (%)	-44.44	-57.00	476.36
Return on total assets (%)	-0.44	-0.20	-0.33
Net profit margin (%)	-0.46	-0.17	-1.23
Turnover of total assets	0.97	1.17	0.27
Turnover of current assets	0.97	1.17	0.27
Turnover of account receivable	1.03	1.20	0.27
Inventory turnover	116.71	248.57	--
Asset liability ratio (%)	99.01	99.64	100.07
Current ratio	1.01	1.00	1.00
Quick ratio	1.00	1.00	1.00

Note: subject’s asset liability ratio is as high as 100.07%. Caution is recommended when transacting with it.

Major Financial Information

	2007	2008	2009
Main business income	31,562	67,554	21,287
Total profit	-144	-118	-262
Net profit	-144	-118	-262
Total assets	32,683	57,855	78,750
Total liabilities	32,359	57,648	78,805
Total owner’s interest	324	207	-55
Source from	government	government	government
Whether audited or not	Yes	Yes	Yes

ANALYSIS

Subject’s profitability indices of 2009 indicate its profitability is average. With the turnover of asset and current asset at a low level, its capital operation capacity is poor. Subject's turnover of A/R is low; its debt recovery speed is a bit lower.

Subject’s asset liability ratio is as high as 100.07%; the debt paying pressure is very heavy.

INDUSTRY PROFILE

Industry

SIC Code (China): 6346 wholesale of ornaments, arts crafts and collections

Description: wholesale, import and export of jewelry ornaments and related products, carving handicrafts, metal arts crafts, lacquer work and other unlisted arts crafts etc.

Status Quo & Trend

The year 2009 is the most difficult year for Chinese economy because of the effect of global financial crisis. Facing with the difficulty, entrepreneurs and associations of jewelry industry showed their strong aspiration to survive in the crisis. In 2009, sales volume of the industry increased 10% y/y with the total volume of 220 billion Yuan. At present, jewelry consumption type is showing a diversification trend in China. Except for gold and silver, sales of jade arts crafts, platinum, diamond and gem ornaments are also increasing obviously. Especially jade arts crafts and ornaments are becoming more and more popular in the market. In the future period, jewelry in China will keep increasing at a speed of more than 15%, and China will become the most competitive processing and consuming center of jewelry and gem in the world. The increase of Chinese gold and jewelry ornaments may be driven mainly by wedding, diamond ornaments and overseas tourists’ consumption.

GENERAL COMMENTS

Subject was registered in 2002 with the registration capital of USD 200,000 Chinese Yuan. Its main business is sales of diamond. With long history but average scale, its popularity still needs to be improved.

Subject's main business income in 2009 decreased largely from 2008 because its business was not well developed. The high account receivable and payable indicates it uses long term credit with its customers and suppliers in transactions. Other account payable in 2009 shows it keeps intimate relationship with its related companies. Because of high accumulated loss, subject’s asset liability ratio is as high as 100.07%; the debt paying risk is very high with poor solvency. We therefore recommend the client not use credit terms in transactions with Subject Company.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.44.65
UK Pound	1	Rs.71.93
Euro	1	Rs.63.24

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	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

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

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