MIRA INFORM REPORT

Report Date :

30.05.2012

IDENTIFICATION DETAILS

Name :	LIVING STONE DIAMOND CO., LTD.
Registered Office :	13a^th Floor, The Executive House, 410/154-156 Surawong Road, Siphaya, Bangrak, Bangkok 10500
Country :	Thailand
Financials (as on) :	31.12.2010
Date of Incorporation :	08.12.1988
Com. Reg. No.:	0105531096576
Legal Form :	Private Limited Company
Line of Business :	Importer, Distributor and Exporter of Diamonds
No. of Employees :	5

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 – 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

LIVING STONE DIAMOND CO., LTD.

SUMMARY

BUSINESS ADDRESS : 13A^th FLOOR, THE EXECUTIVE HOUSE,

410/154-156 SURAWONG ROAD, SIPHAYA,

BANGRAK, BANGKOK 10500, THAILAND

TELEPHONE : [66] 2234-4082, 2237-1436, 2235-9453

FAX : [66] 2266-7899, 2631-4033

E-MAIL ADDRESS : atuljogani@hotmail.com

REGISTRATION ADDRESS : SAME AS BUSINESS ADDRESS

ESTABLISHED : 1988

REGISTRATION NO. : 0105531096576

CAPITAL REGISTERED : BHT. 12,000,000

CAPITAL PAID-UP : BHT. 12,000,000

SHAREHOLDER’S PROPORTION : THAI : 70%

INDIAN : 30%

FISCAL YEAR CLOSING DATE : DECEMBER 31

LEGAL STATUS : PRIVATE LIMITED COMPANY

EXECUTIVE : MR. ATUL KUMAR JAYANTILAL JOKANI, INDIAN

MANAGING DIRECTOR

NO. OF STAFF : 5

LINES OF BUSINESS : DIAMONDS

IMPORTER, DISTRIBUTOR 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 December 8, 1988 as a private limited company under the name style LIVING STONE DIAMOND CO., LTD. by Thai and Indian groups. Its business objective is to import, distribute and export diamonds for jewelry industry. It currently employs 5 staff.

The subject’s registered address is 13A^th Flr., The Executive House, 410/154-156 Surawong Rd., Siphaya, Bangrak, Bangkok 10500, and this is the subject’s current operation address.

THE BOARD OF DIRECTOR

Name	Nationality	Age
Mr. Atul Kumar Jayantilal Jokani	Indian	48
Ms. Nalisa Saeharn	Thai	35

AUTHORIZED PERSON

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

MANAGEMENT

Mr. Atul Kumar Jayantilal Jokani is the Managing Director.

He is Indian nationality with the age of 48 years old.

BUSINESS OPERATIONS

The subject is engaged in importing, distributing and exporting of diamonds for jewelry trading and production industry.

PURCHASE

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

SALES

The products are sold to international traders and manufacturers both local and overseas, mainly to U.S.A., Hong Kong, Japan and European countries.

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 area against T/T.

BANKING

The banker’s name was not disclosed.

EMPLOYMENT

The subject employs 5 staff.

LOCATION DETAILS

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

NOTE

Refer to your given the subject’s address at “12^th Floor, The Executive House”. Please be informed that, the correct address is at “13^th Floor, The Executive House”.

COMMENT

The subject was formed in 1988 as an importer, distributor and exporter of diamond of jewelry productions. Subject reported moderate sales in the past several years, as well as disclose a promising sales in the first quarter of 2012. Its business outlook remains optimistic.

FINANCIAL INFORMATION

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

The capital was increased later as follows:

Bht. 3,000,000 on January 27, 1989

Bht. 4,000,000 on August 11, 1994

Bht. 12,000,000 on December 1, 1995

The latest registered capital was increased to Bht. 12 million, divided into 120,000 shares of Bht. 100 each with fully paid.

THE SHAREHOLDERS LISTED WERE : [as at April 30, 2011]

NAME	HOLDING	%
Mr. Atul Kumar Jayantilal Jokani Nationality: Indian Address : 410/155 Surawong Rd., Siphaya, Bangrak, Bangkok	36,000	30.00
Mr. Somchai Pornchindarak Nationality: Thai Address : 264-266 Mahaesak Rd., Suriyawongse, Bangrak, Bangkok	30,000	25.00
Mr. Sanan Kwankerd Nationality: Thai Address : 131/615 Moo 6, Samaedam, Bangkhunthien, Bangkok	24,000	20.00
Ms. Veerawan Jirathamwong Nationality: Thai Address : 190/16 Sathupradit Rd., Thungwatdon, Sathorn, Bangkok	9,600	8.00
Ms. Nalisa Saeharn Nationality: Thai Address : 326/1 Surawong Rd., Siphaya, Bangrak, Bangkok	7,200	6.00
Mrs. Ananya Sutapak Nationality: Thai Address : 159/402 Moo 6, Klongmai, Sampran, Nakornpathom	7,200	6.00
Mr. Samersak Chaidist Nationality: Thai Address : 65 Moo 5, Petchlakorn, Nongpai, Petchabun	6,000	5.00

Total Shareholders : 7

Share Structure [as at April 30, 2011]

Nationality	Shareholders	No. of Share	% Shares
Thai	6	84,000	70.00
Foreign - Indian	1	36,000	30.00
Total	7	120,000	100.00

NAME OF AUDITOR & CERTIFIED PUBLIC ACCOUNTANT NO. :

AVM Thamanoon Kongsamutr No. 0898

Note:

The 2011 financial statement was not submitted to the Commercial Registration Department during investigation.

BALANCE SHEET [BAHT]

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

ASSETS

Current Assets	2010	2009
Cash in Hand & at Bank	91,823.07	300,750.88
Trade Accounts Receivable	6,710,476.22	10,957,443.94
Inventories	28,632,573.75	18,978,658.34
Other Current Assets	77,085.51	78,986.33
Total Current Assets	35,511,958.55	30,315,839.49
Fixed Assets	702,505.62	732,755.98
Other Assets	17,802.04	17,802.04
Total Assets	36,232,266.21	31,066,397.51

LIABILITIES & SHAREHOLDERS' EQUITY [BAHT]

Current Liabilities	2010	2009
Short-term Loan from Financial Institution	634,339.78	-
Trade Accounts Payable	22,209,003.29	17,634,428.07
Other Current Liabilities	140,102.45	164,396.53
Total Current Liabilities	22,983,445.52	17,798,824.60
Total Liabilities	22,983,445.52	17,798,824.60
Shareholders' Equity
Share capital : Baht 100 par value authorized, issued and fully paid share capital 120,000 shares	12,000,000.00	12,000,000.00
Capital Paid	12,000,000.00	12,000,000.00
Retained Earning - Unappropriated	1,248,820.69	1,267,572.91
Total Shareholders' Equity	13,248,820.69	13,267,572.91
Total Liabilities & Shareholders' Equity	36,232,266.21	31,066,397.51

PROFIT & LOSS ACCOUNT

Revenue	2010	2009
Sales - Domestic	6,253,988.65	16,951,131.25
Sales - International	21,029,346.85	10,474,864.33
Other Income	4,675.09	546,706.34
Total Revenues	27,288,010.59	27,972,701.92
Expenses
Cost of Goods Sold	23,619,139.63	24,142,703.34
Selling Expenses	31,775.03	6,800.15
Administrative Expenses	3,398,062.28	3,282,432.77
Total Expenses	27,048,976.94	27,431,936.26
Profit / [Loss] before Financial Cost & Income Tax	239,033.65	540,765.66
Financial Cost	[105,998.02]	[72,329.56]
Income Tax	[151,787.85]	[155,384.71]
Net Profit / [Loss]	[18,752.22]	313,051.39

FINANCIAL ANALYSIS

ITEM	UNIT	2010	2009
LIQUIDITY RATIO
CURRENT RATIO	TIMES	1.55	1.70
QUICK RATIO	TIMES	0.30	0.63
ACTIVITY RATIO
FIXED ASSETS TURNOVER	TIMES	38.84	37.43
TOTAL ASSETS TURNOVER	TIMES	0.75	0.88
INVENTORY CONVERSION PERIOD	DAYS	442.48	286.93
INVENTORY TURNOVER	TIMES	0.82	1.27
RECEIVABLES CONVERSION PERIOD	DAYS	89.77	145.83
RECEIVABLES TURNOVER	TIMES	4.07	2.50
PAYABLES CONVERSION PERIOD	DAYS	343.21	266.61
CASH CONVERSION CYCLE	DAYS	189.04	166.15
PROFITABILITY RATIO
COST OF GOODS SOLD	%	86.57	88.03
SELLING & ADMINISTRATION	%	12.57	11.99
INTEREST	%	0.39	0.26
GROSS PROFIT MARGIN	%	13.45	13.96
NET PROFIT MARGIN BEFORE EX. ITEM	%	0.88	1.97
NET PROFIT MARGIN	%	(0.07)	1.14
RETURN ON EQUITY	%	(0.14)	2.36
RETURN ON ASSET	%	(0.05)	1.01
EARNING PER SHARE	BAHT	(0.16)	2.61
LEVERAGE RATIO
DEBT RATIO	TIMES	0.63	0.57
DEBT TO EQUITY RATIO	TIMES	1.73	1.34
TIME INTEREST EARNED	TIMES	2.26	7.48
ANNUAL GROWTH
SALES GROWTH	%	(0.52)
OPERATING PROFIT	%	(55.80)
NET PROFIT	%	(105.99)
FIXED ASSETS	%	(4.13)
TOTAL ASSETS	%	16.63

PROFITABILITY RATIO

Gross Profit Margin	13.45	Impressive	Industrial Average	9.15
Net Profit Margin	(0.07)	Deteriorated	Industrial Average	0.09
Return on Assets	(0.05)	Deteriorated	Industrial Average	0.15
Return on Equity	(0.14)	Deteriorated	Industrial Average	0.40

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 13.45%. 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. The company's figure is -0.07%. When compared with the industry average, the ratio of the company was lower.

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. When compared with the industry average, it was lower, the company's figure is -0.05%.

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. When compared with the industry average, it was lower, the company's figure is -0.14%.

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

Return on Assets Uptrend

Return on Equity Uptrend

LIQUIDITY RATIO

Current Ratio	1.55	Satisfactory	Industrial Average	1.80
Quick Ratio	0.30
Cash Conversion Cycle	189.04

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 1.55 times in 2010, decreased from 1.7 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 0.3 times in 2010, decreased from 0.63 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 190 days.

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

Current Ratio Downtrend

LEVERAGE RATIO

Debt Ratio	0.63	Acceptable	Industrial Average	0.58
Debt to Equity Ratio	1.73	Risky	Industrial Average	1.54
Times Interest Earned	2.26	Impressive	Industrial Average	0.87

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 2.26 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 0.63 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 Downtrend

Times Interest Earned Uptrend

ACTIVITY RATIO

Fixed Assets Turnover	38.84	Impressive	Industrial Average	10.60
Total Assets Turnover	0.75	Deteriorated	Industrial Average	1.57
Inventory Conversion Period	442.48
Inventory Turnover	0.82	Deteriorated	Industrial Average	2.35
Receivables Conversion Period	89.77
Receivables Turnover	4.07	Impressive	Industrial Average	3.50
Payables Conversion Period	343.21

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

Fixed Assets Turnover Uptrend

Total Assets Turnover Downtrend

Inventory Turnover Downtrend

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.55.58
UK Pound	1	Rs.87.14
Euro	1	Rs.69.73

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