MIRA INFORM REPORT

Report Date :

10.02.2012

IDENTIFICATION DETAILS

Name :	HATAM CO., LTD.
Registered Office :	41/24-25 Trok Wet, Silom Road, Silom, Bangrak, Bangkok 10500
Country :	Thailand
Financials (as on) :	31.12.2010
Date of Incorporation :	22.11.1983
Com. Reg. No.:	0105526048950
Legal Form :	Private Limited Company
LINE OF BUSINESS :	MANUFACTURER, CONTRACTOR AND EXPORTER OF FINE JEWELRY PRODUCTS
No. of Employees :	30

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

HATAM CO., LTD.

SUMMARY

BUSINESS ADDRESS : 41/24-25 TROK WET, SILOM ROAD,

SILOM, BANGRAK, BANGKOK 10500

TELEPHONE : [66] 2635-2894-5

FAX : [66] 2635-2896

E-MAIL ADDRESS : hamed@hatamjewels.com

hesam@hatamjewels.com

REGISTRATION ADDRESS : SAME AS BUSINESS ADDRESS

ESTABLISHED : 1983

REGISTRATION NO. : 0105526048950

CAPITAL REGISTERED : BHT. 5,000,000

CAPITAL PAID-UP : BHT. 5,000,000

SHAREHOLDER’S PROPORTION : THAI : 100%

FISCAL YEAR CLOSING DATE : DECEMBER 31

LEGAL STATUS : PRIVATE LIMITED COMPANY

EXECUTIVE : MR. HAMED KAZEMINI, THAI

MANAGING DIRECTOR

NO. OF STAFF : 30

LINES OF BUSINESS : FINE JEWELRY PRODUCTS

MANUFACTURER, CONTRACTOR AND EXPORTER

CORPORATE PROFILE

OPERATING TREND : STABLE

PRESENT SITUATION : OPERATING NORMALLY

REPUTATION : FAIR WITH NORMAL BUSINESS ENGAGEMENT

MANAGEMENT STANDARD : MANAGEMENT WITH FAIR PERFORMANCE

HISTORY

The subject was established on November 22, 1983 as a private limited company under the registered name HATAM CO., LTD., by Thai groups, with the business objective to manufacture and export fine jewelry products. It currently employs approximate 30 staff.

The subject’s registered address was initially located at Room 601, 6^th Floor, Maneesap Building II, 41/5-7 Soi Silom 19, Silom Rd., Silom, Bangrak, Bangkok 10500.

On March 27, 2009, the registered address was relocated to 41/24-25 Trok Wet, Silom Rd., Silom, Bangrak, Bangkok 10500, and this is the subject’s current operation address.

THE BOARD OF DIRECTOR

Name	Nationality	Age
Mr. Hamed Kazemini	Thai	28
Mr. Hesam Kazemini	Thai	25

AUTHORIZED PERSON

One of the above directors can sign on behalf of the subject with company’s affixed.

MANAGEMENT

Mr. Hamed Kazemini is the Managing Director.

He is Thai nationality with the age of 28 years old.

BUSINESS OPERATIONS

The subject is engaged in manufacturing, servicing and exporting various kinds of 18k gold jewelry products, with diamonds and precious gems. Its products are included ring, earrings, necklace, bracelet, bangle, pendant and etc., under its own brand “HATAM”, as well as customer’s brands.

PURCHASE

Most of raw materials mainly diamonds and gemstones are imported from India, the remaining, as well as components are purchased from local suppliers.

EXPORT

100% of the products is exported to India, and the countries in Middle East.

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

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

Imports are by T/T.

Exports are against T/T.

BANKING

Bangkok Bank Public Co., Ltd.

EMPLOYMENT

The subject employs approximately 30 staff.

LOCATION DETAILS

The premise is owned for administrative office, factory and warehouse at the heading address. Premise is located in a prime commercial area.

REMARK

MAXIMUM CREDIT SHOULD BE GRANTED AT US$ 100,000.

COMMENT

The subject is engaged in manufacturing and exporting of fine jewelry products. It serves mainly to overseas market. Emerging countries in the Middle East region are likely to improve this year, contributing to growth even with an economic slowdown in EU market. Subject’s business outlook is promising.

FINANCIAL INFORMATION

The capital was registered at Bht. 500,000 divided into 5,000 shares of Bht. 100 each with fully paid.

The capital was increased later as follows:

Bht. 2,000,000 on May 22, 1985

Bht. 5,000,000 on December 19, 1989

Bht. 7,500,000 on December 2, 1991

Bht. 17,500,000 on August 21, 2000

On January 6, 2005, the registered capital was decreased to Bht. 5,000,000 divided into 50,000 shares of Bht. 100 each with fully paid.

THE SHAREHOLDERS LISTED WERE

[as at April 30, 2011]

NAME	HOLDING	%
Mr. Hamed Kazemini Nationality: Thai Address : 40/54 Sukhumvit 18 Rd., Klongton, Klongtoey, Bangkok	23,000	46.00
Mr. Hesam Kazemini Nationality: Thai Address : 40/54 Sukhumvit 18 Rd., Klongton, Klongtoey, Bangkok	18,000	36.00
Ms. Shaha Kazemini Nationality: Thai Address : 40/54 Sukhumvit 18 Rd., Klongton, Klongtoey, Bangkok	9,000	18.00

Total Shareholders : 3

Share Structure [as at April 30, 2011]

Nationality	Shareholders	No. of Share	% Shares
Thai	3	50,000	100.00
Foreign	-	-	-
Total	3	50,000	100.00

NAME OF AUDITOR & CERTIFIED PUBLIC ACCOUNTANT NO.

Mr. Bovornsith Sornsilp No. 6131

BALANCE SHEET [BAHT]

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

ASSETS

Current Assets	2010	2009
Cash and Cash Equivalent	75,971.99	113,925.99
Inventories	6,982,115.71	2,523,589.86
Deferred Income	1,755,200.00	653,875.00
Other Current Assets	213,617.19	132,088.60
Total Current Assets	9,026,904.89	3,423,479.45
Long-term Loan to Person or Related Company	6,500,000.00	11,120,000.00
Fixed Assets	1,123,919.15	570,937.09
Other Assets	60,000.00	60,000.00
Total Assets	16,710,824.04	15,174,416.54

LIABILITIES & SHAREHOLDERS’ EQUITY [BAHT]

Current Liabilities	2010	2009
Bank Overdraft & Short-term Loan from Financial Institution	10,892,152.66	9,927,338.41
Trade Accounts Payable	-	5,200.00
Accrued Expenses	35,155.84	25,000.00
Other Current Liabilities	131,216.08	2,553.49
Total Current Liabilities	11,058,524.58	9,960,091.90
Total Liabilities	11,058,524.58	9,960,091.90
Shareholders’ Equity
Share capital : Baht 100 par value authorized, issued and fully paid share capital 50,000 shares	5,000,000.00	5,000,000.00
Capital Paid	5,000,000.00	5,000,000.00
Retained Earning - Unappropriated	652,299.46	214,324.64
Total Shareholders' Equity	5,652,299.46	5,214,324.64
Total Liabilities & Shareholders' Equity	16,710,824.04	15,174,416.54

PROFIT & LOSS ACCOUNT

Revenue	2010	2009
Sales & Services Income	10,162,262.36	3,783,759.67
Other Income	1,370,000.00	653,875.00
Total Revenues	11,532,262.36	4,437,634.67
Expenses
Cost of Goods Sold	8,354,814.16	2,306,415.55
Administrative Expenses	1,610,597.24	1,563,020.88
Total Expenses	9,965,411.40	3,869,436.43
Profit / [Loss] before Financial Cost & Income Tax	1,566,850.96	568,198.24
Financial Cost	[1,077,968.16]	[519,208.94]
Profit / [Loss] before Income Tax	488,882.80	48,989.30
Income Tax	[50,907.98]	-
Net Profit / [Loss]	437,974.82	48,989.30

FINANCIAL ANALYSIS

ITEM	UNIT	2010	2009
LIQUIDITY RATIO
CURRENT RATIO	TIMES	0.82	0.34
QUICK RATIO	TIMES	0.01	0.01
ACTIVITY RATIO
FIXED ASSETS TURNOVER	TIMES	9.04	6.63
TOTAL ASSETS TURNOVER	TIMES	0.61	0.25
INVENTORY CONVERSION PERIOD	DAYS	305.03	399.37
INVENTORY TURNOVER	TIMES	1.20	0.91
RECEIVABLES CONVERSION PERIOD	DAYS	-	-
RECEIVABLES TURNOVER	TIMES	-	-
PAYABLES CONVERSION PERIOD	DAYS	-	0.82
CASH CONVERSION CYCLE	DAYS	305.03	398.55
PROFITABILITY RATIO
COST OF GOODS SOLD	%	82.21	60.96
SELLING & ADMINISTRATION	%	15.85	41.31
INTEREST	%	10.61	13.72
GROSS PROFIT MARGIN	%	31.27	56.33
NET PROFIT MARGIN BEFORE EX. ITEM	%	15.42	15.02
NET PROFIT MARGIN	%	4.31	1.29
RETURN ON EQUITY	%	7.75	0.94
RETURN ON ASSET	%	2.62	0.32
EARNING PER SHARE	BAHT	8.76	0.98
LEVERAGE RATIO
DEBT RATIO	TIMES	0.66	0.66
DEBT TO EQUITY RATIO	TIMES	1.96	1.91
TIME INTEREST EARNED	TIMES	1.45	1.09
ANNUAL GROWTH
SALES GROWTH	%	168.58
OPERATING PROFIT	%	175.76
NET PROFIT	%	794.02
FIXED ASSETS	%	96.86
TOTAL ASSETS	%	10.12

PROFITABILITY RATIO

Gross Profit Margin	31.27	Impressive	Industrial Average	29.20
Net Profit Margin	4.31	Impressive	Industrial Average	(51.65)
Return on Assets	2.62	Impressive	Industrial Average	(13.01)
Return on Equity	7.75	Impressive	Industrial Average	(3.83)

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. Gross Profit Margin is 31.27%. When compared with the industry average, the ratio of the company was higher. This indicated that company was more profitable than the same industry.

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 ratio is 4.31%, 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 2.62%, 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 7.75%, 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	0.82	Risky	Industrial Average	83.84
Quick Ratio	0.01
Cash Conversion Cycle	305.03

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 0.82 times in 2010, increase from 0.34 times, then the company may have problems meeting its short-term obligations. 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 0.01 time in 2010, same figure as in 2009, 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 306 days.

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

Current Ratio Uptrend

LEVERAGE RATIO

Debt Ratio	0.66	Impressive	Industrial Average	1.91
Debt to Equity Ratio	1.96	Risky	Industrial Average	1.49
Times Interest Earned	1.45	Deteriorated	Industrial Average	343.72

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 1.46 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 0.66 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 Uptrend

ACTIVITY RATIO

Fixed Assets Turnover	9.04	Deteriorated	Industrial Average	167,038.45
Total Assets Turnover	0.61	Acceptable	Industrial Average	1.18
Inventory Conversion Period	305.03
Inventory Turnover	1.20	Deteriorated	Industrial Average	4.27
Receivables Conversion Period	-
Receivables Turnover	-		Industrial Average	34.28
Payables Conversion Period	-

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

DIAMOND INDUSTRY – INDIA

- 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 8^th Century B.C.  India, in fact, remained undisputed leader till 18^th Century when Brazilian fields were discovered in 1725 followed by emergence of S. Africa, Russia and Australia.

- 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.

- 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.

- 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.

- 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.

- The diamond jewellery industry in India today may be more than Rs 60000 mil and is rated amongst the fastest growing  in the world. Indi ranks third in the world in domestic diamond consumption.

- 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.

- Excerpts from Times of India dated 30^th October 2010 is as under –

DIAMOND SAGA – DIRTY DOZEN STUCK WITH 2K CR DEBT

This could be the biggest credibility crisis the Indian diamond industry has ever faced. Fifteen banks run the risk of losing Rs 2000 crore lent to a dozen diamond firms in Surat. Until about two months ago, they had not repaid  these dues. Bankers believe many diamantaires borrowed money during the economic downturn two years ago and diverted funds to businesses like real estate and capital markets. Many of themselves made money from these businesses but their diamond companies have gone sick and declared insolvency.

- Most of the money borrowed from the banks in the name of their diamond business has been diverted in real estate and the share market. The banks are not in a position to seize their properties because in many cases, these were purchased in the name of their relatives and friends.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.49.29
UK Pound	1	Rs.78.10
Euro	1	Rs.65.59

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.