MIRA INFORM REPORT

Report Date :

26.11.2012

IDENTIFICATION DETAILS

Name :	REAL GEM STONE CO., LTD.
Registered Office :	286/59 Soi Pattana, Surawongse Road, Siphya, Bangrak, Bangkok 10500
Country :	Thailand
Financials (as on) :	31.10.2010
Date of Incorporation :	1990
Com. Reg. No.:	0105533137318
Legal Form :	Private Limited Company
LINE OF BUSINESS :	IMPORTER AND DISTRIBUTOR OF GEMSTONES AND DIAMONDS
No. of Employees :	3

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 (31.03.2012)	Current Rating (30.06.2012)
Thailand	B1	B1

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

thailand - ECONOMIC OVERVIEW

With a well-developed infrastructure, a free-enterprise economy, generally pro-investment policies, and strong export industries, Thailand enjoyed solid growth from 2000 to 2007 - averaging more than 4% per year - as it recovered from the Asian financial crisis of 1997-98. Thai exports - mostly machinery and electronic components, agricultural commodities, and jewelry - continue to drive the economy, accounting for more than half of GDP. The global financial crisis of 2008-09 severely cut Thailand's exports, with most sectors experiencing double-digit drops. In 2009, the economy contracted 2.3%. In 2010, Thailand's economy expanded 7.8%, its fastest pace since 1995, as exports rebounded from their depressed 2009 level. Steady economic growth at just below 4% during the first three quarters of 2011 was interrupted by historic flooding in October and November in the industrial areas north of Bangkok, crippling the manufacturing sector and leading to a revised growth rate of only 0.1% for the year. The industrial sector is poised to recover from the second quarter of 2012 onward, however, and the government anticipates the economy will probably grow between 5.5 and 6.5% for 2012, while private sector forecasts range between 3.8% and 5.7%.

Source : CIA

Company name

REAL GEM STONE CO., LTD.

SUMMARY

BUSINESS ADDRESS : 286/59 SOI PATTANA, SURAWONGSE ROAD,

SIPHYA, BANGRAK, BANGKOK 10500

TELEPHONE : [66] 2236-2521, 2233-8689, 2236-3836-8

FAX : [66] 2236-5061

E-MAIL ADDRESS : -

REGISTRATION ADDRESS : SAME AS BUSINESS ADDRESS

ESTABLISHED : 1990

REGISTRATION NO. : 0105533137318

TAX ID NO. : 3101908640

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 : OCTOBER 31

LEGAL STATUS : PRIVATE LIMITED COMPANY

EXECUTIVE : MR. VIJAY KUMAR KACHOLIA, INDIAN

MANAGING DIRECTOR

NO. OF STAFF : 3

LINES OF BUSINESS : GEMSTONES AND DIAMONDS

IMPORTER AND DISTRIBUTOR

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 20, 1990 as a private limited company under the registered name REAL GEM STONE CO., LTD., by Thai and Indian groups, with the business objective to import and distribute gemstones and diamonds for jewelry business. It currently employs 3 staff.

The subject’s registered address is 286/59 Soi Pattana, Surawongse Rd., Siphya, Bangrak, Bangkok 10500, and this is the subject’s current operation address.

THE BOARD OF DIRECTOR

Mr. Vijay Kumar Kacholia

AUTHORIZED PERSON

The above director signs on behalf of the subject with company’s affixed.

MANAGEMENT

Mr. Vijay Kumar Kacholia is the Managing Director.

He is Indian nationality with the age of 44 years old.

BUSINESS OPERATIONS

The subject is engaged in importing and distributing of gemstones and diamonds for jewelry trading and production.

IMPORT

100% of the products is imported from India, Pakistan, Republic of China and

Hong Kong.

SALES

100% of the products is sold locally by wholesale to traders and manufacturers.

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 according for the past two years.

CREDIT

Sales are by cash or on the credits term of 30-60 days.

Imports are by T/T.

BANKING

Bangkok Bank Public Co., Ltd.

EMPLOYMENT

The subject currently employs 3 staff.

LOCATION DETAILS

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

COMMENT

The subject reported slow sales in 2011 from slow consumption. The overall jewelry industry in domestic market seems to enjoy growing since the beginning of this year, while the subject’s business remains still.

FINANCIAL INFORMATION

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

The capital was increased later as follows:

Bht. 3,000,000 on July 2, 1992

Bht. 4,000,000 on June 28, 1996

The latest registered 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 February 28, 2011]

NAME	HOLDING	%
Mr. Vijay Kumar Kacholia Nationality: Indian Address : 286/59 Soi Pattana, Surawongse Rd., Siphya, Bangrak, Bangkok	10,000	25.00
Mrs. Purnita Kacholia Nationality: Indian Address : 286/59 Soi Pattana, Surawongse Rd., Siphya, Bangrak, Bangkok	9,600	24.00
Ms. Anthana Boonmalert Nationality: Thai Address : 31/1 Moo 5, Yothaka, Bangnampriew, Chachoengsao	5,100	12.75
Mrs. Madariya Masyoh Nationality: Thai Address : 53/1 Moo 1, Singtothong, Bangnampriew, Chachoengsao	5,100	12.75
Ms. Maliwal Kan Nationality: Thai Address : 235 Israphap Rd., Wad Aroon, Bangkokyai, Bangkok	5,100	12.75
Mrs. Cholrudee Chantadul Nationality: Thai Address : 229/25 Petchburi Rd., Thungphyathai, Rajthewi, Bangkok	5,100	12.75

Total Shareholders : 6

Share Structure [as at February 28, 2011]

Nationality	Shareholders	No. of Share	% Shares
Thai	4	20,400	51.00
Foreign - Indian	2	19,600	49.00
Total	6	40,000	100.00

NAME OF AUDITOR & CERTIFIED PUBLIC ACCOUNTANT NO. :

Mrs. Wasana Tanmongkol No. 1888

BALANCE SHEET [BAHT]

The 2011 financial statement was not submitted to the Commercial Registration Department, Ministry of Commerce.

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

ASSETS

Current Assets	2010	2009
Cash and Cash Equivalents	288,749.36	107,585.16
Trade Accounts Receivable	3,922,116.77	4,280,487.54
Inventories	3,409,999.26	1,860,399.08
Other Current Assets	417,433.07	400,076.74
Total Current Assets	8,038,298.46	6,648,548.52
Fixed Assets	14,637.98	22,820.07
Other Non-current Assets	3,200,000.00	3,900,000.00
Total Assets	11,252,936.44	10,571,368.59

LIABILITIES & SHAREHOLDERS’ EQUITY [BAHT]

Current Liabilities	2010	2009
Trade Accounts Payable	1,003,077.08	997,322.78
Other Current Liabilities	533,551.49	77,269.76
Total Current Liabilities	1,536,628.57	1,074,592.54
Total Liabilities	1,536,628.57	1,074,592.54
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	5,716,307.87	5,496,776.05
Total Shareholders' Equity	9,716,307.87	9,496,776.05
Total Liabilities & Shareholders' Equity	11,252,936.44	10,571,368.59

PROFIT & LOSS ACCOUNT

Revenue	2010	2009
Sales	8,533,756.38	6,396,766.56
Other Income	2,577.99	90,258.95
Total Revenues	8,536,334.37	6,487,025.51
Expenses
Cost of Goods Sold	5,883,772.58	3,735,316.51
Selling Expenses	83,865.96	73,089.77
Administrative Expenses	1,861,892.91	1,616,430.35
Other Expenses	458,551.63	770,392.30
Total Expenses	8,288,083.08	6,195,228.93
Profit / Loss] before Financial Costs & Income Tax	248,251.29	291,796.58
Financial Costs	-	-
Profit / [Loss] before Income Tax	248,251.29	291,796.58
Income Tax	[28,719.47]	[27,147.12]
Net Profit / [Loss]	219,531.82	264,649.46

FINANCIAL ANALYSIS

ITEM	UNIT	2010	2009
LIQUIDITY RATIO
CURRENT RATIO	TIMES	5.23	6.19
QUICK RATIO	TIMES	2.74	4.08
ACTIVITY RATIO
FIXED ASSETS TURNOVER	TIMES	582.99	280.31
TOTAL ASSETS TURNOVER	TIMES	0.76	0.61
INVENTORY CONVERSION PERIOD	DAYS	211.54	181.79
INVENTORY TURNOVER	TIMES	1.73	2.01
RECEIVABLES CONVERSION PERIOD	DAYS	167.75	244.24
RECEIVABLES TURNOVER	TIMES	2.18	1.49
PAYABLES CONVERSION PERIOD	DAYS	62.23	97.45
CASH CONVERSION CYCLE	DAYS	317.07	328.58
PROFITABILITY RATIO
COST OF GOODS SOLD	%	68.95	58.39
SELLING & ADMINISTRATION	%	22.80	26.41
INTEREST	%	-	-
GROSS PROFIT MARGIN	%	31.08	43.02
NET PROFIT MARGIN BEFORE EX. ITEM	%	2.91	4.56
NET PROFIT MARGIN	%	2.57	4.14
RETURN ON EQUITY	%	2.26	2.79
RETURN ON ASSET	%	1.95	2.50
EARNING PER SHARE	BAHT	5.49	6.62
LEVERAGE RATIO
DEBT RATIO	TIMES	0.14	0.10
DEBT TO EQUITY RATIO	TIMES	0.16	0.11
TIME INTEREST EARNED	TIMES	-	-
ANNUAL GROWTH
SALES GROWTH	%	33.41
OPERATING PROFIT	%	(14.92)
NET PROFIT	%	(17.05)
FIXED ASSETS	%	(35.85)
TOTAL ASSETS	%	6.45

PROFITABILITY RATIO

Gross Profit Margin	31.08	Impressive	Industrial Average	9.15
Net Profit Margin	2.57	Impressive	Industrial Average	0.09
Return on Assets	1.95	Impressive	Industrial Average	0.15
Return on Equity	2.26	Impressive	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 31.08%. 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 2.57%, 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 1.95%, 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 2.26%, 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 Uptrend

Return on Equity Uptrend

LIQUIDITY RATIO

Current Ratio	5.23	Impressive	Industrial Average	1.80
Quick Ratio	2.74
Cash Conversion Cycle	317.07

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 5.23 times in 2010, decreased from 6.19 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 higher, indicated that company was an efficient operator in a dominant position within its industry.

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 2.74 times in 2010, decreased from 4.08 times, although excluding inventory so the company still have good short-term financial strength.

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 318 days.

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

Current Ratio Downtrend

LEVERAGE RATIO

Debt Ratio	0.14	Impressive	Industrial Average	0.58
Debt to Equity Ratio	0.16	Impressive	Industrial Average	1.54
Times Interest Earned	-		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.

Debt Ratio shows the proportion of a company's assets which are financed through debt. The company's figure is 0.14 less than 0.5, most of the company's assets are financed through equity.

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	582.99	Impressive	Industrial Average	10.60
Total Assets Turnover	0.76	Deteriorated	Industrial Average	1.57
Inventory Conversion Period	211.54
Inventory Turnover	1.73	Acceptable	Industrial Average	2.35
Receivables Conversion Period	167.75
Receivables Turnover	2.18	Acceptable	Industrial Average	3.50
Payables Conversion Period	62.23

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

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.55.34
UK Pound	1	Rs.88.29
Euro	1	Rs.71.36

INFORMATION DETAILS

Report Prepared by :

PDT

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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