MIRA INFORM REPORT

Report Date :

30.06.2012

IDENTIFICATION DETAILS

Name :	KRISHNA IMPEX CO., LTD.
Registered Office :	24^th Floor, Jewelry Trade Center, 919/308 Silom Road, Silom, Bangrak, Bangkok 10500
Country :	Thailand
Financials (as on) :	31.12.2011
Date of Incorporation :	11.02.2002
Com. Reg. No.:	0105545016545
Legal Form :	Private Limited Company
Line of Business :	Importer, Distributor and Exporter of Diamonds and Jewelry
No. of Employees :	4

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 :	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 – March 31^st, 2012

Country Name	Previous Rating (31.12.2011)	Current Rating (31.03.2012)
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

KRISHNA IMPEX CO., LTD.

SUMMARY

BUSINESS ADDRESS : 24^th FLOOR, JEWELRY TRADE CENTER,

919/308 SILOM ROAD, SILOM,

BANGRAK, BANGKOK 10500

TELEPHONE : [66] 2267-4251

FAX : [66] 2635-8488

E-MAIL ADDRESS : krishnaimpex@hotmail.com

REGISTRATION ADDRESS : SAME AS BUSINESS ADDRESS

ESTABLISHED : 2002

REGISTRATION NO. : 0105545016545 [Former: 10454500268]

TAX ID NO. : 3030469533

CAPITAL REGISTERED : BHT. 4,000,000

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

SHAREHOLDER’S PROPORTION : THAI : 51.00%

INDIAN : 49.00%

FISCAL YEAR CLOSING DATE : DECEMBER 31

LEGAL STATUS : PRIVATE LIMITED COMPANY

EXECUTIVE : MR. MAYUR MANJIBHAI DESAI, INDIAN

MANAGING DIRECTOR

NO. OF STAFF : 4

LINES OF BUSINESS : DIAMONDS AND JEWELRY IMPORTER, 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 February 11, 2002 as a private limited company under the name style KRISHNA IMPEX CO., LTD., by Thai and Indian groups, with the objective to engage in jewelry trading business. It currently employs 4 staff.

The subject’s registered address was initially located at 3^rd Flr., T.D. Bldg., 14-16 Mahaesak Rd., Suriyawongse, Bangrak, Bangkok 10500.

On March 18, 2008 the subject’s registered address was relocated to 5^th Flr., J.K. Bldg., Room 502, 6 Mahesak 3 Rd., Suriyawongse, Bangrak, Bangkok 10500.

On June 21, 2012, its registered address was relocated to 24^th Floor, Jewelry Trade Center, 919/308 Silom Rd., Silom, Bangrak, Bangkok 10500, and this is the subject’s current operation address.

THE BOARD OF DIRECTORS

Name	Nationality	Age
Mr. Mayur Manjibhai Desai	Indian	31
Mr. Bharatkumar Manjibhai Patel Alias Desai	Indian	31
Mr. Hitesh Chhaganbhai Desai	Indian	28

AUTHORIZED PERSON

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

MANAGEMENT

Mr. Mayur Manjibhai Desai is the Managing Director.

He is Indian nationality with the age of 31 years old.

BUSINESS OPERATIONS

The subject is engaged in importing and distributing various kinds of diamonds and gemstones, as well as exporting of diamonds, gemstones and jewelry products.

PURCHASE

The products are purchased from suppliers both in domestic and overseas, mainly in India.

SALES

The products are sold locally by wholesale to manufacturers and end-users.

EXPORT

The products are also exported to Hong Kong, Republic of China, Belgium and E.U.

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 60-90 days.

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

Imports are by T/T on the credit term of 90 days.

Exports are against T/T on the credit term of 90 days.

BANKING

Bangkok Bank Public Co., Ltd.

EMPLOYMENT

The subject employs 4 staff.

LOCATION DETAILS

The premise is rented for administrative office at the heading address. Premise is located in a prime commercial area.

COMMENT

The subject’s business was good in the past few years due to demand of diamond and jewelry products had strongly grown, especially exports of jewelry products were bright.

However, market of jewelry products in 2011 was likely stagnant from many unfavourable factors such as higher oil prices, higher gold prices, inundation, inflation and etc., which resulted to a decrease in both sales revenue and net profit of the subject comparing to the previous year. However, its business is still promising in line with the improvement and growth of jewelry industry.

FINANCIAL INFORMATION

The capital was registered at Bht. 2,000,000 divided into 20,000 shares of Bht. 100 each.

On June 3, 2003, 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 27, 2012]

NAME	HOLDING	%
Mr. Mayur Manjibhai Desai Nationality: Indian Address : 5^th Flr., J.K. Building, 6 Mahaesak 3 Rd., Suriyawongse, Bangrak, Bangkok	9,000	22.50
Mr. Hitesh Chhaganbhai Desai Nationality: Indian Address : 5^th Flr., J.K. Building, 6 Mahaesak 3 Rd., Suriyawongse, Bangrak, Bangkok	5,600	14.00
Mr. Pornchai Samma-anant Nationality: Thai Address : 13/74 Rimklong-bang-or Rd., Bang-or, Jomthong, Bangkok	5,400	13.50
Mr. Bharatkumar Manjibhai Patel Alias Desai Nationality: Indian Address : 5^th Flr., J.K. Building, 6 Mahaesak 3 Rd., Suriyawongse, Bangrak, Bangkok	5,000	12.50
Mrs. Khaisri Vorapimrat Nationality: Thai Address : 206 Moo 5, T. Nongbuahee, A. Pibulmangsaharn, Ubonratchathani	5,000	12.50
Ms. Benjarin Srisukhon Nationality: Thai Address : 301/3 Moo 1, T. Thasala, A. Thasala, Nakornsrithammarat	5,000	12.50

Ms. Chanphen Phaka Nationality: Thai Address : 134/22 Soi Anamai Ngamcharoen 31 Rd., Thakam, Bnagkhunthien, Bangkok

5,000

12.50

Total Shareholders : 7

Share Structure [as at April 27, 2012]

Nationality	Shareholders	No. of Share	% Shares
Thai	4	20,400	51.00
Foreign - Indian	3	19,600	49.00
Total	7	40,000	100.00

NAME OF AUDITOR & CERTIFIED PUBLIC ACCOUNTANT NO. :

Ms. Nikul Udomkijja No. 6725

BALANCE SHEET [BAHT]

The latest financial figures published for December 31, 2011 & 2010 were:

ASSETS

Current Assets	2011	2010
Cash and Cash Equivalents	30,526.93	140,149.61
Trade Accounts Receivable	10,803,357.48	15,701,526.77
Inventories	17,376,787.08	16,427,200.05
Other Current Assets	108,406.37	113,448.28
Total Current Assets	28,319,077.86	32,382,324.71
Fixed Assets	339,953.58	422,987.26
Other Assets	-	2,000.00
Total Assets	28,659,031.44	32,807,311.97

LIABILITIES & SHAREHOLDERS' EQUITY [BAHT]

Current Liabilities	2011	2010
Bank Overdraft	2,629,535.64	333,225.79
Trade Accounts & Other Payable	16,084,746.37	22,608,159.81
Short-term Loan from Person or Related Company	1,866,000.00	2,600,000.00
Accrued Income Tax	27,229.25	117,007.55
Total Current Liabilities	20,607,511.26	25,658,393.15
Total Liabilities	20,607,511.26	25,658,393.15
Shareholders' Equity
Share capital : Baht 100 value authorized, issued and fully paid share capital 40,000 shares	4,000,000.00	4,000,000.00
Capital Paid	4,000,000.00	4,000,000.00
Retained Earning - Unappropriated	4,051,520.19	3,148,918.82
Total Shareholders' Equity	8,051,520.19	7,148,918.82
Total Liabilities & Shareholders' Equity	28,659,031.44	32,807,311.97

PROFIT & LOSS ACCOUNT

Revenue	2011	2010
Sales & Services	46,140,545.57	54,716,211.25
Gain on Exchange Rate	1,534,011.97	2,710,076.25
Other Income	611.00	1,356.80
Total Revenues	47,675,168.54	57,427,644.30
Expenses
Cost of Goods Sold	42,138,188.92	52,480,940.35
Selling Expenses	543,465.79	596,645.10
Administrative Expenses	3,858,847.23	2,808,250.48
Total Expenses	46,540,501.94	55,885,835.93
Profit / Loss] before Finance Costs & Income Tax	1,134,666.60	1,541,808.37
Finance Costs	[65,894.93]	[117,540.55]
Profit / [Loss] before Income Tax	1,068,771.67	1,424,267.82
Income Tax	[166,170.31]	[244,507.55]
Net Profit / [Loss]	902,601.37	1,179,760.27

FINANCIAL ANALYSIS

ITEM	UNIT	2011	2010
LIQUIDITY RATIO
CURRENT RATIO	TIMES	1.37	1.26
QUICK RATIO	TIMES	0.53	0.62
ACTIVITY RATIO
FIXED ASSETS TURNOVER	TIMES	135.73	129.36
TOTAL ASSETS TURNOVER	TIMES	1.61	1.67
INVENTORY CONVERSION PERIOD	DAYS	150.52	114.25
INVENTORY TURNOVER	TIMES	2.42	3.19
RECEIVABLES CONVERSION PERIOD	DAYS	85.46	104.74
RECEIVABLES TURNOVER	TIMES	4.27	3.48
PAYABLES CONVERSION PERIOD	DAYS	139.33	157.24
CASH CONVERSION CYCLE	DAYS	96.65	61.75
PROFITABILITY RATIO
COST OF GOODS SOLD	%	91.33	95.91
SELLING & ADMINISTRATION	%	9.54	6.22
INTEREST	%	0.14	0.21
GROSS PROFIT MARGIN	%	12.00	9.04
NET PROFIT MARGIN BEFORE EX. ITEM	%	2.46	2.82
NET PROFIT MARGIN	%	1.96	2.16
RETURN ON EQUITY	%	11.21	16.50
RETURN ON ASSET	%	3.15	3.60
EARNING PER SHARE	BAHT	22.57	29.49
LEVERAGE RATIO
DEBT RATIO	TIMES	0.72	0.78
DEBT TO EQUITY RATIO	TIMES	2.56	3.59
TIME INTEREST EARNED	TIMES	17.22	13.12
ANNUAL GROWTH
SALES GROWTH	%	(15.67)
OPERATING PROFIT	%	(26.41)
NET PROFIT	%	(23.49)
FIXED ASSETS	%	(19.63)
TOTAL ASSETS	%	(12.64)

PROFITABILITY RATIO

Gross Profit Margin	12.00	Impressive	Industrial Average	9.17
Net Profit Margin	1.96	Impressive	Industrial Average	(0.11)
Return on Assets	3.15	Impressive	Industrial Average	(0.16)
Return on Equity	11.21	Impressive	Industrial Average	(0.32)

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 12%. 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 1.96%, 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 3.15%, 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 11.21%, 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	1.37	Acceptable	Industrial Average	2.38
Quick Ratio	0.53
Cash Conversion Cycle	96.65

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 1.37 times in 2011, increase from 1.26 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 0.53 times in 2011, decrease from 0.62 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 97 days.

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

Current Ratio Downtrend

LEVERAGE RATIO

Debt Ratio	0.72	Acceptable	Industrial Average	0.58
Debt to Equity Ratio	2.56	Risky	Industrial Average	1.47
Times Interest Earned	17.22	Impressive	Industrial Average	0.59

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 17.22 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 0.72 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	135.73	Impressive	Industrial Average	6.08
Total Assets Turnover	1.61	Impressive	Industrial Average	1.23
Inventory Conversion Period	150.52
Inventory Turnover	2.42	Impressive	Industrial Average	1.38
Receivables Conversion Period	85.46
Receivables Turnover	4.27	Impressive	Industrial Average	3.38
Payables Conversion Period	139.33

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 Downtrend

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.56.31
UK Pound	1	Rs.88.06
Euro	1	Rs.70.91

INFORMATION DETAILS

Report Prepared by :

PRL

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%)

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