MIRA INFORM REPORT

Report Date :

24.12.2011

IDENTIFICATION DETAILS

Name :	KEY GEMS INTERNATIONAL CO., LTD.
Registered Office :	547/10-11 Soi Charoennakorn 28, Charoennakorn Road, Banglamphulang, Klongsan, Bangkok 10600
Country :	Thailand
Financials (as on) :	31.12.2010
Date of Incorporation :	09.05.2003
Com. Reg. No.:	0105546053894
Legal Form :	Private Limited Company
Line of Business :	Manufacturer, Distributor and Exporter of Jewelry Products
No. of Employees :	24

RATING & COMMENTS

MIRA’s Rating :

B

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Status :	Moderate
Payment Behaviour :	No Complaints
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 – September 30, 2011

Country Name	Previous Rating (30.06.2011)	Current Rating (30.09.2011)
Thailand	B1	B1

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

Company name

KEY GEMS INTERNATIONAL CO., LTD.

SUMMARY

BUSINESS ADDRESS : 547/10-11 SOI CHAROENNAKORN 28,

CHAROENNAKORN ROAD, BANGLAMPHULANG,

KLONGSAN, BANGKOK 10600, THAILAND

TELEPHONE : [66] 2439-2577-9

FAX : [66] 2860-1500, 2439-2699

E-MAIL ADDRESS : sales@keygems.net

REGISTRATION ADDRESS : SAME AS BUSINESS ADDRESS

ESTABLISHED : 2003

REGISTRATION NO. : 0105546053894 [Former : 10454600949]

CAPITAL REGISTERED : BHT. 4,000,000

CAPITAL PAID-UP : BHT. 4,000,000

SHAREHOLDER’S PROPORTION : THAI : 100%

FISCAL YEAR CLOSING DATE : DECEMBER 31

LEGAL STATUS : PRIVATE LIMITED COMPANY

EXECUTIVE : MR. RANGSAN TRONGCHAK, THAI

MANAGING DIRECTOR

NO. OF STAFF : 24

LINES OF BUSINESS : JEWELRY PRODUCTS

MANUFACTURER, DISTRIBUTOR AND EXPORTER

CORPORATE PROFILE

OPERATING TREND : STABLE

PRESENT SITUATION : OPERATING NORMALLY

REPUTATION : GOOD WITH NORMAL BUSINESS ENGAGEMENT

MANAGEMENT STANDARD : MANAGEMENT WITH FAIR PERFORMANCE

HISTORY

The subject was established on May 9, 2003 as a private limited company under the name style KEY GEMS INTERNATIONAL CO., LTD. by Thai groups. Its business objective is to manufacture jewelry products for domestic and export markets. It currently employs 24 staff.

The subject is Thailand’s well-known antiques reproduction jewellery, specialized in Art-Deco and Victorian styles.

The subject’s registered address is 547/10-11 Soi Charoennakorn 28, Charoennakorn Rd., Banglamphulang, Klongsan, Bangkok 10600, and this is the subject’s current operation address.

THE BOARD OF DIRECTOR

Name		Nationality	Age
Mr. Rangsan Trongchak	[x]	Thai	41
Ms. Chanjira Pithaya-ajchariyakul		Thai	45
Ms. Nuengnuch Trongchak		Thai	39
Mr. Jirawat Trongchak		Thai	43

AUTHORIZED PERSON

Only the mentioned director [x] can sign on behalf of the subject with company’s affixed.

MANAGEMENT

Mr. Rangsan Trongchak is the Managing Director.

He is Thai nationality with the age of 41 years old.

BUSINESS OPERATIONS

The subject is engaged in design and manufacturing jewelry products with gemstone and diamond in Art-Deco and Victorian styles. Range of products including necklace, earring, ring, pendant, bracelet and etc., under its name “REMARKABLE PIECES”.

PURCHASE

Raw materials and accessories are purchased from suppliers in both domestic and overseas, mainly India and Hong Kong.

SALES

The products are sold and serviced to customers both local and overseas, mainly in Italy, Hong Kong, Switzerland, Singapore and U.S.A.

SUBSIDIARY AND AFFILIATED COMPANY

The subject is not found to have any subsidiary or affiliated company here in Thailand.

LITIGATION

Bankruptcy and Receivership

There are no litigation on bankruptcy and receivership cases filed against the subject found at Legal Execution Department for the past five years.

Others

There are no legal suits filed against the subject for the past two years.

CREDIT

Sales are by cash or on the credits term of 30-60 days.

Local bills are paid by cash or on the credits term of 30-60 days.

Imports are by L/C at sight or T/T.

Exports are against T/T.

BANKING

The banker’s name was not disclosed.

EMPLOYMENT

The subject employs 24 staff.

LOCATION DETAILS

The premise is owned for administrative office and assembly house at the heading address. Premise is located in commercial/residential area.

REMARK

MAXIMUM CREDIT SHOULD BE GRAND AT USD 1,000,000.

COMMENT

Subject is engaged in manufacturing, distributing and exporting of jewelry products with sophisticated design and fine craftsmanship. Its sales are steadily grown and have a good business trend . Market outlook for jewelry product in the last quarter of 2011 is not bright due to massive floods in many provinces including Bangkok, while the rest of year is positive gained.

FINANCIAL INFORMATION

The capital was registered at Bht. 1,000,000 divided into 10,000 shares of Bht. 100 each with fully paid.

On November 10, 2010, the capital was increased to Bht. 4,000,000 divided into 40,000 shares of Bht. 100 each with fully paid.

THE SHAREHOLDERS LISTED WERE

[as at April 30, 2011]

NAME	HOLDING	%
Mr. Rangsan Trongchak Nationality: Thai Address : 291 Moo 6, Ratbamrung Rd., Pranburi, Prachuabkirikhan	20,400	51.00
Mr. Jirawat Trongchak Nationality: Thai Address : 291 Moo 6, Ratbamrung Rd., Pranburi, Prachuabkirikhan	12,000	30.00
Mrs. Amaraporn Trongchak Nationality: Thai Address : 422/10 Damrongrak Rd., Klongmahanark, Pomprab, Bangkok	1,600	4.00
Ms. Wallapa Trongchak Nationality: Thai Address : 291 Moo 6, Ratbamrung Rd., Pranburi, Prachuabkirikhan	1,600	4.00
Mrs. Thanida Trongchak Nationality: Thai Address : 291 Moo 6, Ratbamrung Rd., Pranburi, Prachuabkirikhan	1,600	4.00
Ms. Nuengnuch Trongchak Nationality: Thai Address : 581 Pattanakarn 39 Rd., Suanluang, Bangkok	1,600	4.00
Ms. Chanjira Pithaya-ajchariyakul Nationality: Thai Address : 303 Tonpho Rd., Bangkorlaem, Bangkok	1,200	3.00

Total Shareholders : 7

Share Structure [as at April 30, 2011]

Nationality	Shareholders	No. of Share	% Shares
Thai	7	40,000	100.00
Foreign	-	-	-
Total	7	40,000	100.00

NAME OF AUDITOR & CERTIFIED PUBLIC ACCOUNTANT NO.

Mrs. Vilai Larpsongphol No. 6533

BALANCE SHEET [BAHT]

The latest financial figures published for December 31, 2010 & 2009 were:

ASSETS

Current Assets	2010	2009
Cash and Cash Equivalents	227,957.81	1,455,101.63
Trade Accounts Receivable	32,791,669.09	6,199,021.70
Inventories	63,347,407.59	44,895,119.25
Other Current Assets	3,798,589.36	4,500,116.52
Total Current Assets	100,165,623.85	57,049,359.10
Fixed Assets	1,359,151.30	1,687,494.90
Total Assets	101,524,775.15	58,736,854.00

LIABILITIES & SHAREHOLDERS' EQUITY [BAHT]

Current Liabilities	2010	2009
Bank Overdraft & Short-term Loan from Financial Institution	3,880,743.66	419,597.61
Trade Accounts Payable	48,143,881.50	37,234,210.18
Current Portion of Long-term Loan	36,000.00	36,000.00
Other Current Liabilities	14,153,380.10	1,676,756.76
Total Current Liabilities	66,214,005.26	39,366,564.55
Long-term Loan from Person or Related Company	27,078,035.27	26,078,035.27
Other Long-term Loan	9,000.00	45,000.00
Total Liabilities	93,301,040.53	65,489,599.82
Shareholders' Equity
Share capital : Baht 100 value Authorized & issued share capital 40,000 & 10,000 shares in 2010 & 2009 respectively	4,000,000.00	1,000,000.00
Capital Paid	4,000,000.00	1,000,000.00
Retained Earning - Unappropriated	4,223,734.62	[7,752,745.82]
Total Shareholders' Equity	8,223,734.62	[6,752,745.82]
Total Liabilities & Shareholders' Equity	101,524,775.15	58,736,854.00

PROFIT & LOSS ACCOUNT

Revenue	2010	2009
Sales Income	178,700,427.90	76,152,212.50
Other Income	3,340,401.41	1,081,655.53
Total Revenues	182,040,829.31	77,233,868.03
Expenses
Cost of Goods Sold	148,859,481.33	71,521,189.95
Selling Expenses	13,041,211.59	8,222,297.20
Administrative Expenses	6,964,921.28	6,612,759.21
Total Expenses	168,865,614.20	86,356,246.36
Profit / [Loss] before Financial Cost & Income Tax	13,175,215.11	[9,122,378.33]
Financial Cost	[181,778.87]	-
Profit / [Loss] before Income Tax	12,993,436.24	[9,122,378.33]
Income Tax	[1,016,955.80]	-
Net Profit / [Loss]	11,976,480.44	[9,122,378.33]

FINANCIAL ANALYSIS

ITEM	UNIT	2010	2009
LIQUIDITY RATIO
CURRENT RATIO	TIMES	1.51	1.45
QUICK RATIO	TIMES	0.50	0.19
ACTIVITY RATIO
FIXED ASSETS TURNOVER	TIMES	131.48	45.13
TOTAL ASSETS TURNOVER	TIMES	1.76	1.30
INVENTORY CONVERSION PERIOD	DAYS	155.33	229.12
INVENTORY TURNOVER	TIMES	2.35	1.59
RECEIVABLES CONVERSION PERIOD	DAYS	66.98	29.71
RECEIVABLES TURNOVER	TIMES	5.45	12.28
PAYABLES CONVERSION PERIOD	DAYS	118.05	190.02
CASH CONVERSION CYCLE	DAYS	104.26	68.81
PROFITABILITY RATIO
COST OF GOODS SOLD	%	83.30	93.92
SELLING & ADMINISTRATION	%	11.20	19.48
INTEREST	%	0.10	-
GROSS PROFIT MARGIN	%	18.57	7.50
NET PROFIT MARGIN BEFORE EX. ITEM	%	7.37	(11.98)
NET PROFIT MARGIN	%	6.70	(11.98)
RETURN ON EQUITY	%	145.63	135.09
RETURN ON ASSET	%	11.80	(15.53)
EARNING PER SHARE	BAHT	299.41	(912.24)
LEVERAGE RATIO
DEBT RATIO	TIMES	0.92	1.11
DEBT TO EQUITY RATIO	TIMES	11.35	(9.70)
TIME INTEREST EARNED	TIMES	72.48	-
ANNUAL GROWTH
SALES GROWTH	%	134.66
OPERATING PROFIT	%	(244.43)
NET PROFIT	%	231.29
FIXED ASSETS	%	(19.46)
TOTAL ASSETS	%	72.85

PROFITABILITY RATIO

Gross Profit Margin	18.57	Acceptable	Industrial Average	25.80
Net Profit Margin	6.70	Impressive	Industrial Average	(40.29)
Return on Assets	11.80	Impressive	Industrial Average	(7.86)
Return on Equity	145.63	Impressive	Industrial Average	(8.60)

Gross Profit Margin used to assess a firm's financial health by revealing the proportion of money left over from revenues after accounting for the cost of goods sold. Gross profit margin serves as the source for paying additional expenses and future savings. The company's figure is 18.57%. When compared with the industry average, the ratio of the company was lower. This indicated that company was originated from the problems with control over its costs.

Net Profit Margin is the indicator of the company's efficiency in that net profit takes into consideration all expenses of the company. A low profit margin indicates a low margin of safety, higher risk that a decline in sales will erase profits and result in a net loss. Net Profit Margin is 6.7%, higher figure when compared with those of its average competitors in the same industry, indicated that business was an efficient operator in a dominant position within its industry.

Return on Assets measures how efficiently profits are being generated from the assets employed in the business when compared with the ratios of firms in a similar business. A low ratio in comparison with industry averages indicates an inefficient use of business assets. Return on Assets ratio is 11.8%, higher figure when compared with those of its average competitors in the same industry, indicated that business was an efficient profit in a dominant position within its industry.

Return on Equity indicates how profitable a company is by comparing its net income to its average shareholders' equity, ROE measures how much the shareholders earned for their investment in the company. Return on Equity ratio is 145.63%, higher figure when compared with those of its average competitors in the same industry, indicated that business was an efficient profit in a dominant position within its industry.

Trend of the average competitors in the same industry for last 5 years

Return on Assets Downtrend

Return on Equity Downtrend

LIQUIDITY RATIO

Current Ratio	1.51	Deteriorated	Industrial Average	56.30
Quick Ratio	0.50
Cash Conversion Cycle	104.26

The Current Ratio is to ascertain whether a company's short-term assets are readily available to pay off its short-term liabilities. The company's figure is 1.51 times in 2010, increase from 1.45 times, then it is generally considered to have good short-term financial strength. When compared with the industry average, the ratio of the company was lower.

The Quick Ratio is a liquidity indicator that further refines the current ratio by measuring the amount of the most liquid current assets there are to cover current liabilities. The company's figure is 0.5 times in 2010, increase from 0.19 times, then the company has not enough current assets that presumably can be quickly converted to cash for pay financial obligations.

The Cash Conversion Cycle measures the number of days a company's cash is tied up in the production and sales process of its operations and the benefit from payment terms from its creditors. It meant the company could survive when no cash inflow was received from sale for 105 days.

Trend of the average competitors in the same industry for last 5 years

Current Ratio Uptrend

LEVERAGE RATIO

Debt Ratio	0.92	Impressive	Industrial Average	0.97
Debt to Equity Ratio	11.35	Risky	Industrial Average	1.81
Times Interest Earned	72.48	Impressive	Industrial Average	(12.71)

Debt to Equity Ratio a measurement of how much suppliers, lenders, creditors and obligors have committed to the company versus what the shareholders have committed. A lower the percentage means that the company is using less leverage and has a stronger equity position.

Times Interest Earned measuring a company's ability to meet its debt obligations. Ratio is 72.48 higher than 1, so the company can pay interest expenses on outstanding debt.

Debt Ratio shows the proportion of a company's assets which are financed through debt. The company's figure is 0.92 greater than 0.5, most of the company's assets are financed through debt.

Trend of the average competitors in the same industry for last 5 years

Debt Ratio Uptrend

Times Interest Earned Downtrend

ACTIVITY RATIO

Fixed Assets Turnover	131.48	Deteriorated	Industrial Average	60,262.57
Total Assets Turnover	1.76	Impressive	Industrial Average	1.38
Inventory Conversion Period	155.33
Inventory Turnover	2.35	Deteriorated	Industrial Average	8.21
Receivables Conversion Period	66.98
Receivables Turnover	5.45	Deteriorated	Industrial Average	16.03
Payables Conversion Period	118.05

Trend of the average competitors in the same industry for last 5 years

Fixed Assets Turnover Uptrend

Total Assets Turnover Downtrend

Inventory Turnover Uptrend

Receivables Turnover Uptrend

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.52.72
UK Pound	1	Rs.82.70
Euro	1	Rs.68.90

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
--	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%)

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.