MIRA INFORM REPORT

Report Date :

27.11.2012

IDENTIFICATION DETAILS

Name :	SANGHAVI JEWELLERY TOKYO CO LTD
Registered Office :	Shimada Bldg 3F, 3-34-5 Taito Taitoku Tokyo 110-0016
Country :	Japan
Financials (as on) :	31.12.2011
Date of Incorporation :	January 2005
Legal Form :	Private Limited Company (Yugen Kaisha)
Line of Business :	Import, wholesale, retail of polished diamonds, jewelry products
No. of Employees :	3-5

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 :	--

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

SANGHAVI JEWELLERY TOKYO CO LTD

REGD NAME: YK Sanghavi Jewellery Tokyo

MAIN OFFICE: Shimada Bldg 3F, 3-34-5 Taito Taitoku Tokyo 110-0016 JAPAN

Tel: 03-3839-6005 Fax: 03-3839-2237

URL: http://www.sanghavijewellery.com

E-mail address: marketing@sanghavijewellery.com

ACTIVITIES

Import, wholesale, retail of polished diamonds, jewelry products

BRANCHES

Nil

FACTORIES

(subcontracted)

OFFICER(S)

P JAIN, PRES

Yen Amount: In million Yen, unless otherwise stated

SUMMARY

FINANCES R/WEAK A/SALES Yen 600 M

PAYMENTS NO COMPLAINTS CAPITAL Yen 6 M

TREND SLOW WORTH Yen 20 M

STARTED 2005 EMPLOYES 3-5

COMMENT

IMPORTER OF POLISHED DIAMONDS.

FINANCIAL SITUATION CONSIDERED RATHER WEAK BUT SHOULD BE GOOD FOR MODERATE BUSINESS ENGAGEMENTS.

HIGHLIGHTS

The subject company was established by Sanghavi Far East Pte Ltd as its marketing arm in Japan. This is a trading firm specializing in import, wholesale and retail of polished diamonds and jewelry products. Diamonds are partially subcontracted mfg to local processors into jewelry products. Clients are jewelry wholesalers, jewelry stores, consumers, other, centering in the greater-Tokyo area.

FINANCIAL INFORMATION

Financials are only partially disclosed. Figures for the Dec/2011 fiscal term are not available from any database/credit firms and we have obtained the following figures directly from the firm. They are, however, not verified by third parties.

The sales volume for Dec/2011 fiscal term amounted to Yen 600 million, a 2% up from Yen 590 million in the previous term. Consumer spending came back to a normal level after having been affected by the global economic downturn last term. Department store sales rose. The net profit is said posted at Yen 2 million, similarly in the previous term. .

For the current term ending Dec 2012 the net profit is projected at Yen 3 million, on a 2% rise in turnover, to Yen 610 million. Business is seen recovering from the worst times.

The financial situation is considered RATHER WEAK but should be good for MODERATE business engagements.

REGISTRATION

Date Registered: Jan 2005

Legal Status: 　Private Limited Company (Yugen Kaisha)

Regd Capital: 　Yen 6.5 million

Major shareholders (%): Sanghavi Far East Pte Ltd (54), P Jain (46)

No. of shareholders: 2

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

OPERATION

Activities: Imports, wholesales and retails polished diamonds, diamond jewelry, other jewelry products (--100%).

Diamonds are partially subcontracted mfg into jewelry products to local jewelry processors.

Clients: Jewelry stores, jewelry wholesalers, consumers, other

No. of accounts: Unavailable

Domestic areas of activities: Centered in greater-Tokyo

Suppliers: [Mfrs, wholesalers] Imports from Sanghavi Exports, other.

Payment record: No Complaints

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

Bank References:

SMBC (Asakusa)

Royal Bank of Scott (Tokyo)

Relations: Satisfactory

FINANCES

(In Million Yen)

		31/12/2012	31/12/2011	31/12/2010	31/12/2009
Annual Sales		610	600	590	620
Recur. Profit
Net Profit		3	2	2	4
Total Assets			N/A	N/A	N/A
Net Worth			22	20	18
Capital, Paid-Up			6	6	6
Div.P.Share(¥)			0.00	0.00	0.00
<Analytical Data>		(%)	(%)	(%)	(%)
S.Growth Rate		1.67	1.69	-4.84	-7.88
Current Ratio			..	..	..
N.Worth Ratio			..	..	..
N.Profit/Sales		0.49	0.33	0.34	0.65

Notes: Financials are only partially disclosed.

Forecast (or estimated) figures for the 31/12/2012 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.55.69
UK Pound	1	Rs.89.20
Euro	1	Rs.72.10

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%)

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

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