MIRA INFORM REPORT

Report Date :

07.11.2012

IDENTIFICATION DETAILS

Name :	J TRADING CO LTD
Registered Office :	Ohmiya Bldg 3F, 5-13-9 Ueno Taitoku Tokyo 110-0005
Country :	Japan
Financials (as on) :	31.08.2012
Date of Incorporation :	October 1987
Legal Form :	Limited Company
Line Of Business :	Import, Wholesale Of Polished Diamonds, Fingerings, Other Jewelry
No. of Employees :	9

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 :	--

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 (31.03.2012)	Current Rating (30.06.2012)
Japan	A1	A1

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

JAPAN - ECONOMIC OVERVIEW

In the years following World War II, government-industry cooperation, a strong work ethic, mastery of high technology, and a comparatively small defense allocation (1% of GDP) helped Japan develop a technologically advanced economy. Two notable characteristics of the post-war economy were the close interlocking structures of manufacturers, suppliers, and distributors, known as keiretsu, and the guarantee of lifetime employment for a substantial portion of the urban labor force. Both features are now eroding under the dual pressures of global competition and domestic demographic change. Japan's industrial sector is heavily dependent on imported raw materials and fuels. A tiny agricultural sector is highly subsidized and protected, with crop yields among the highest in the world. Usually self-sufficient in rice, Japan imports about 60% of its food on a caloric basis. Japan maintains one of the world's largest fishing fleets and accounts for nearly 15% of the global catch. For three decades, overall real economic growth had been spectacular - a 10% average in the 1960s, a 5% average in the 1970s, and a 4% average in the 1980s. Growth slowed markedly in the 1990s, averaging just 1.7%, largely because of the after effects of inefficient investment and an asset price bubble in the late 1980s that required a protracted period of time for firms to reduce excess debt, capital, and labor. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, Japan in 2011 stood as the fourth-largest economy in the world after second-place China, which surpassed Japan in 2001, and third-place India, which edged out Japan in 2011. A sharp downturn in business investment and global demand for Japan's exports in late 2008 pushed Japan further into recession. Government stimulus spending helped the economy recover in late 2009 and 2010, but the economy contracted again in 2011 as the massive 9.0 magnitude earthquake in March disrupted manufacturing. Electricity supplies remain tight because Japan has temporarily shut down almost all of its nuclear power plants after the Fukushima Daiichi nuclear reactors were crippled by the earthquake and resulting tsunami. Estimates of the direct costs of the damage - rebuilding homes, factories, and infrastructure - range from $235 billion to $310 billion, and GDP declined almost 0.5% in 2011. Prime Minister Yoshihiko NODA has proposed opening the agricultural and services sectors to greater foreign competition and boosting exports through membership in the US-led Trans-Pacific Partnership trade talks and by pursuing free-trade agreements with the EU and others, but debate continues on restructuring the economy and reining in Japan's huge government debt, which exceeds 200% of GDP. Persistent deflation, reliance on exports to drive growth, and an aging and shrinking population are other major long-term challenges for the economy.

Source : CIA

Company name and address

J TRADING CO LTD

REGD NAME: J Trading KK

MAIN OFFICE: Ohmiya Bldg 3F, 5-13-9 Ueno Taitoku Tokyo 110-0005 JAPAN

Tel: 03-3834-0933 Fax: 03-3834-0919

URL: http://www.jt-net.co.jp/

E-Mail address: info@jt-net.co.jp

ACTIVITIES

Import, wholesale of polished diamonds, fingerings, other jewelry

BRANCHES

Osaka, Fukuoka

FACTORIES

YK Cast Art, KK J Plan (--subsidiaries)

OFFICERS

TAKESHI IWATA, PRES Shin’ichi Uehara, dir

Harumi Ochiai, dir Hideo Tanahashi, dir

Yen Amount: In million Yen, unless otherwise stated

SUMMARY

FINANCES FAIR A/SALES Yen 905 M

PAYMENTS NO COMPLAINTS CAPITAL Yen 60 M

TREND SLOW WORTH Yen 161 M

STARTED 1987 EMPLOYES 9

COMMENT

IMPORTER AND WHOLESALER SPECIALIZING IN DIAMONDS AND OTHER JEWELRY.

FINANCIAL SITUATION CONSIDERED FAIR AND GOOD FOR ORDINARY

BUSINESS ENGAGEMENTS.

HIGHLIGHTS

The subject company was established originally in 1981 by Hirokazu Iwata in order to make most of in order to make most of his experience in the jewelry business, on his account. Takeshi is the founder’s son, who took the office of presidency in Mar 1991. This is a specialized trading house, owned by the Iwata family, for import and wholesale of polished & precut diamonds centrally, diamond imports accounting for 90% of total sales. Also handles fingerings, earrings, other jewelry products. Diamonds are imported from Belgium, Israel, India, other. They are processed into jewelry products by subsidiary mfr, YK Cast Art. Design and R&D works are handled by subsidiary, KK J Plan. The operations are totally handled by the group firms. Known by sound management and operation with stable & solid clientele networks. Clients are jewelry stores, jewelry processors, others, nationwide.

FINANCIAL INFORMATION

The sales volume for Aug/2011 fiscal term amounted to Yen 905 million, a 3% down from Yen 937 million in the previous term. The recurring profit was posted at Yen 2 million and the net profit at Yen 1 million, respectively, compared with Yen 7 million recurring profit and Yen 4 million net profit, respectively, a year ago.

For the current term ending Aug 2012 he recurring profit is projected at Yen 5 million and the net profit at Yen 3 million, respectively, on a 3% rise in turnover, to Yen 910 million,

The financial situation is considered maintained FAIR and good for ORDINARY business engagements.

REGISTRATION

Date Registered: Oct 1987

Legal Status: Limited Company (Kabushiki Kaisha)

Authorized: 4,800 shares

Issued: 1,200 shares

Sum: Yen 60 million

Major shareholders (%): Takeshi Iwata (70)

No. of shareholders: 7

Nothing detrimental is known as to the commercial morality of executives.

OPERATION

Activities: Imports and wholesales polished, precut diamonds (90%), fingerings, other jewelry products (--10%).

Diamonds are imported from Belgium, Israel, India, other.

Operations are all handled by the group firms: YK Cast Art (jewelry processing) andKK J Plan (designing, planning, R&D)

Clients: [Jewelry stores, jewelry processors] Kirin’ya, Elizabeth Jewelry, other.

No. of accounts: 500

Domestic areas of activities: Centered in greater-Tokyo

Suppliers: [Mfrs, wholesalers] Imports from Lily Diamond, other from Belgium Israel, India, etc.

Also supplied from Kashikey Co, Yama Co, Kinpodo, Cast Art (subsidiary), other.

Payment record: No Complaints

Location: Business area in Tokyo. Office premises at the caption address are leased and maintained satisfactorily.

Bank References:

Asahi Shinkin Bank (H/O)

MUFG (Ueno)

Relations: Satisfactory

FINANCES

(In Million Yen)

Terms Ending:		31/08/2012	31/08/2011	31/08/2010	31/08/2009
Annual Sales		930	905	937	872
Recur. Profit		5	2	7
Net Profit		3	1	4	2
Total Assets			650	600	599
Current Assets			553	533
Current Liabs			380	371
Net Worth			161	151	146
Capital, Paid-Up			60	60	60
Div.P.Share(¥)			0.00	0.00	0.00
<Analytical Data>		(%)	(%)	(%)	(%)
S.Growth Rate		2.76	-3.42	7.45	-22.21
Current Ratio		..	145.53	143.67	..
N.Worth Ratio		..	24.77	25.17	24.37
R.Profit/Sales		0.54	0.22	0.75	..
N.Profit/Sales		0.32	0.11	0.43	0.23
Return On Equity		..	0.62	2.65	1.37

Notes: Forecast (or estimated) figures for 31/08/2012 fiscal term.

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.54.60
UK Pound	1	Rs.87.31
Euro	1	Rs.69.86

INFORMATION DETAILS

Report Prepared by :

MNL

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.