MIRA INFORM REPORT

Report Date :

02.11.2012

IDENTIFICATION DETAILS

Name :	S. R. EXPORTS (H.K.) LTD.
Registered Office :	Flat H1, 9/F., Winner Building, 36 Man Yue Street, Hunghom, Kowloon
Country :	Hong Kong
Date of Incorporation :	05.10.2006
Com. Reg. No.:	37237200
Legal Form :	Private Limited Company
Line of Business :	Importer, Exporter and Wholesaler of all kinds of loose diamonds.
No. of Employees :	04

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 – June 30^th, 2012

Country Name	Previous Rating (31.03.2011)	Current Rating (30.06.2012)
Hong Kong	A2	A2

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

HONG KONG - ECONOMIC OVERVIEW

Hong Kong has a free market economy, highly dependent on international trade and finance - the value of goods and services trade, including the sizable share of re-exports, is about four times GDP. Hong Kong's open economy left it exposed to the global economic slowdown that began in 2008. Although increasing integration with China, through trade, tourism, and financial links, helped it to make an initial recovery more quickly than many observers anticipated, it again faces a possible slowdown as exports to the Euro zone and US slump. The Hong Kong government is promoting the Special Administrative Region (SAR) as the site for Chinese renminbi (RMB) internationalization. Hong Kong residents are allowed to establish RMB-denominated savings accounts; RMB-denominated corporate and Chinese government bonds have been issued in Hong Kong; and RMB trade settlement is allowed. The territory far exceeded the RMB conversion quota set by Beijing for trade settlements in 2010 due to the growth of earnings from exports to the mainland. RMB deposits grew to roughly 7.8% of total system deposits in Hong Kong by the end of 2011, an increase of over 59% since the beginning of the year. The government is pursuing efforts to introduce additional use of RMB in Hong Kong financial markets and is seeking to expand the RMB quota. The mainland has long been Hong Kong's largest trading partner, accounting for about half of Hong Kong's exports by value. Hong Kong's natural resources are limited, and food and raw materials must be imported. As a result of China's easing of travel restrictions, the number of mainland tourists to the territory has surged from 4.5 million in 2001 to 28 million in 2011, outnumbering visitors from all other countries combined. Hong Kong has also established itself as the premier stock market for Chinese firms seeking to list abroad. In 2011 mainland Chinese companies constituted about 43% of the firms listed on the Hong Kong Stock Exchange and accounted for about 56% of the Exchange's market capitalization. During the past decade, as Hong Kong's manufacturing industry moved to the mainland, its service industry has grown rapidly. Growth slowed to 5% in 2011. Credit expansion and tight housing supply conditions caused Hong Kong property prices to rise rapidly in 2010 and inflation to rise 5.3% in 2011. Lower and middle income segments of the population are increasingly unable to afford adequate housing. Hong Kong continues to link its currency closely to the US dollar, maintaining an arrangement established in 1983

Source : CIA

COMPANY NAME

S. R. EXPORTS (H.K.) LTD.

company ADDRESS

Flat H1, 9/F., Winner Building, 36 Man Yue Street, Hunghom, Kowloon, Hong Kong.

PHONE: 2736 2247; 2356 2247; 6085 1192

FAX: 2736 2246

E-MAIL: srexports@biznetvigator.com

MANAGEMENT

Managing Director: Mr. Pravinchandra Hiralal Shah

SUMMARY

Incorporated on: 5th October, 2006.

Organization: Private Limited Company.

Capital: Nominal: HK$10,000.00

Issued: HK$10,000.00

Business Category: Diamond Trader.

Employees: 4.

Main Dealing Banker: The Hongkong & Shanghai Banking Corp. Ltd., Hong Kong.

Banking Relation: Satisfactory.

COMPANY NAME

S. R. EXPORTS (H.K.) LTD.

company ADDRESS

Registered Head Office:-

Flat H1, 9/F., Winner Building, 36 Man Yue Street, Hunghom, Kowloon, Hong Kong.

Holding Company:-

Apex Gems Inc., USA.

Affiliated/Associated Companies:-

Global Co., Hong Kong. (Business ceased)

S. Rasiklal & Co., India.

BUSINESS REGISTRATION NUMBER

37237200

COMPANY FILE NUMBER

1078772

MANAGEMENT

Managing Director: Mr. Pravinchandra Hiralal Shah

CAPITAL

Nominal Share Capital: HK$10,000.00 (Divided into 10,000 shares of HK$1.00 each)

Issued Share Capital: HK$10,000.00

SHAREHOLDER

(As per registry dated 05-10-2011)

Name	No. of shares
Apex Gems Inc. 576, 5th Avenue, Suite #1000, New York, NY 10036, USA.	10,000 =====

DIRECTOR

(As per registry dated 05-10-2011)

Name (Nationality)	Address
Pravinchandra Hiralal SHAH	576, 5th Avenue, Suite #1000, New York, NY 10036, USA.

SECRETARY

(As per registry dated 05-10-2011)

Name	Address	Co. No.
Excel Management Consultants Ltd.	Room 1206, 12/F., Harbour Csytal Centre, 100 Granville Road, Tsimshatsui East, Kowloon, Hong Kong.	1340064

HISTORY

The subject was incorporated on 5th October, 2006 as a private limited liability company under the Hong Kong Companies Ordinance.

Apart from these, neither material change nor amendment has been ever traced and noted.

OPERATIONS

Activities: Importer, Exporter and Wholesaler.

Lines: All kinds of loose diamonds.

Employees: 4.

Commodities Imported: India, Belgium, US, other Asian countries, etc.

Markets: Asian countries, Europe, US, etc.

Terms/Sales: L/C, T/T, etc.

Terms/Buying: L/C, T/T, D/P, etc

FINANCIAL INFORMATION

Nominal Share Capital: HK$10,000.00 (Divided into 10,000 shares of HK$1.00 each)

Issued Share Capital: HK$10,000.00

Profit or Loss: Making a small profit in the past two years.

Condition: Business is improving.

Facilities: Making active use of general banking facilities.

Payment: Met obligations as contracted.

Commercial Morality: Satisfactory.

Banker: The Hongkong & Shanghai Banking Corp. Ltd., Hong Kong.

Standing: Small.

GENERAL

Having issued 10,000 ordinary shares of HK$1.00 each, S. R. Exports (H.K.) Ltd. is a wholly owned subsidiary of Apex Gems Inc. [Apex Gems] which is a US-based firm.

The subject’s only director Mr. Pravinchandra Hiralal Shah is an Indian who is a US passport holder. Most of the time, he is residing in New York, the United States.

Shah can be reached at his mobile phone number 6085 1192.

The subject is a diamond importer, exporter and wholesaler. It had an associated company Global Co. which was also owned by Pravinchandra Hiralal Shah. The registered address of Global Co. was located at a different address. However, this firm has ceased business since 30th September, 2009.

The subject’s loose, polished and cut diamonds are imported from India, Belgium and other European countries, etc. Polished or cut diamonds are marketed in Hong Kong, exported or exported to Japan, other Asian countries, Europe, the United States, etc. It is likely that the United States is the subject’s prime market since its holding company Apex Gems is in New York of the United States. Apex Gems is a jewellery and gem importer and wholesaler. Most of the time, Pravinchandra Hiralal Shah is in the United States administering the business of Apex Gems.

The subject also has got an affiliate S. Rasiklal & Co. [S. Rasiklal] in India. S. Rasiklal is a diamond manufacturer. It is also the main supplier of the subject.

In order to penetrate the international market further, the subject has taken part in fairs and exhibitions held in Hong Kong and other foreign large cities. For instance, it is going to take part in “HKTDC Hong Kong International Jewellery Show 2013” which will be held in Hong Kong Convention and Exhibition Centre, Wanchai, Hong Kong during the period of 5th to 9th March, 2013.

Supported by S. Rasiklal and Apex Gems, the subject’s business keeps on improving. History in Hong Kong is over five years.

The subject is an affiliate of S. Rasiklal & Co. Mumbai Group which is in India.

On the whole, consider the subject good for normal business engagements.

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.53.78
UK Pound	1	Rs.86.77
Euro	1	Rs.69.71

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.