MIRA INFORM REPORT

Report Date :

06.02.2013

IDENTIFICATION DETAILS

Name :	DECENT DIAM CO., LTD
Registered Office :	Room 6, 11^th Flr., Bangkok Gems & Jewellery Bldg., 322/17 Surawong Rd., Siphaya, Bangrak, Bangkok 10500
Country :	Thailand
Financials (as on) :	31.12.2011
Date of Incorporation :	31.07.1996
Com. Reg. No.:	0105539084381
Legal Form :	Private Limited Company
Line of Business :	Importer & Distributor of Diamonds & Gemstones
No. of Employees :	3

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 – 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

DECENT DIAM CO., LTD.

SUMMARY

BUSINESS ADDRESS : ROOM 6, 11^th FLOOR, BANGKOK GEMS & JEWELLERY

BUILDING, 322/17 SURAWONG ROAD,

SIPHAYA, BANGRAK,

BANGKOK 10500, THAILAND

TELEPHONE : [66] 2631-5965

FAX : [66] 2631-5965

E-MAIL ADDRESS : -

REGISTRATION ADDRESS : SAME AS BUSINESS ADDRESS

ESTABLISHED : 1996

REGISTRATION NO. : 0105539084381

TAX ID NO. : 3011773796

CAPITAL REGISTERED : BHT. 4,000,000

CAPITAL PAID-UP : BHT. 4,000,000

SHAREHOLDER’S PROPORTION : THAI : 51%

INDIAN : 49%

FISCAL YEAR CLOSING DATE : DECEMBER 31

LEGAL STATUS : PRIVATE LIMITED COMPANY

EXECUTIVE : MR. HARDIG DUPENDRA SHAH, INDIAN

MANAGING DIRECTOR

NO. OF STAFF : 3

LINES OF BUSINESS : DIAMONDS AND GEMSTONES

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 July 31, 1996 as a private limited company under the name style DECENT DIAM CO., LTD., by Thai and Indian groups, with the business objective to import and distribute diamonds and gemstones to domestic market. It currently employs 3 staff.

The subject’s registered address is Room 6, 11^th Flr., Bangkok Gems & Jewellery Bldg., 322/17 Surawong Rd., Siphaya, Bangrak, Bangkok 10500, and this is the subject’s current operation address.

THE BOARD OF DIRECTOR

Name	Nationality	Age
Mr. Hardig Dupendra Shah	Indian	28
Mr. Veetarat Mugesh Kumar Shah	Indian	24

AUTHORIZED PERSON

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

MANAGEMENT

Mr. Hardig Dupendra Shah is the Managing Director.

He is Indian nationality with the age of 28 years old.

BUSINESS OPERATIONS

The subject is engaged in importing and distributing various styles of diamonds and gemstones for jewelry industry.

IMPORT

Most of the products are imported from India, Republic of China and Hong Kong.

SALES

The products are sold locally by wholesale to traders, manufacturers and end-users.

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

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 T/T.

BANKING

Bangkok Bank Public Co., Ltd.

EMPLOYMENT

The subject employs 3 staff.

LOCATION DETAILS

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

COMMENT

The subject was formed in 1996 as an importer and distributor of diamond and gemstones. Its serves mainly to domestic market, which is closely linked to the conditions of local consumption. Unfortunately, massive floods in Thailand during the last quarter of 2011 also swayed domestic consumption in 2011.

However, subject was able to retain its moderate business in 2012.

FINANCIAL INFORMATION

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

On October 10, 2002, the 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 December 18, 2012]

NAME	HOLDING	%
Mrs. Supaporn Vejkama Nationality: Thai Address : 6 Soi Chaengsanit 10, Chaengsanit Rd., Naimuang, Muang, Ubon Ratchathani	20,400	51.00
Mr. Hardig Dupendra Shah Nationality: Indian Address : 322/17 Surawong Rd., Siphaya, Bangrak, Bangkok	19,200	48.00
Mr. Veetarat Mugesh Kumar Shah Nationality: Indian Address : 322/17 Surawong Rd., Siphaya, Bangrak, Bangkok	400	1.00

Total Shareholders : 3

Share Structure [as at December 18, 2012]

Nationality	Shareholders	No. of Share	% Shares
Thai	1	20,400	51.00
Foreign-Indian	2	19,600	49.00
Total	3	40,000	100.00

NAME OF AUDITOR & CERTIFIED PUBLIC ACCOUNTANT NO. :

Mr. Marut Makarasane No. 6532

BALANCE SHEET [BAHT]

The latest financial figures published as at December 31, 2011, 2010 & 2009 were:

ASSETS

Current Assets	2011	2010	2009
Cash and Cash Equivalents	129,185.08	244,362.85	400,724.80
Trade Accounts Receivable	19,037,681.99	4,363,875.53	1,255,132.86
Inventories	1,225,160.00	2,126,008.00	1,258,511.18
Advance Payment	-	-	280,000.00
Total Current Assets	20,392,027.07	6,734,246.38	3,194,368.84
Fixed Assets	1.00	1.00	3,346.85
Prepaid Income Tax	22,050.00	22,050.00	22,050.00
Guarantee	4,607.47	4,607.47	4,607.47
Total Assets	20,418,685.54	6,760,904.85	3,224,373.16

LIABILITIES & SHAREHOLDERS’ EQUITY [BAHT]

Current Liabilities	2011	2010	2009
Trade Accounts Payable	19,843,943.08	6,757,004.29	3,423,581.35
Other Current Liabilities	114,524.75	24,939.33	17,764.14
Total Current Liabilities	19,958,467.83	6,781,943.62	3,441,345.49
Total Liabilities	19,958,467.83	6,781,943.62	3,441,345.49
Shareholders' Equity
Share capital : Baht 100 par value authorized, issued and fully paid share capital 40,000 shares	4,000,000.00	4,000,000.00	4,000,000.00
Capital Paid	4,000,000.00	4,000,000.00	4,000,000.00
Retained Earning Unappropriated	[3,539,782.29]	[4,021,038.77]	[4,216,972.33]
Total Shareholders' Equity	460,217.71	[21,038.77]	[216,972.33]
Total Liabilities & Shareholders' Equity	20,418,685.54	6,760,904.85	3,224,373.16

PROFIT & LOSS ACCOUNT

Revenue	2011	2010	2009
Sales Income	20,335,226.69	13,653,734.24	6,036,187.79
Other Income	30,887.34	137,606.02	181,603.96
Total Revenues	20,366,114.03	13,791,340.26	6,217,791.75
Expenses
Cost of Goods Sold	18,979,748.02	12,569,250.52	5,490,604.54
Administrative Expenses	845,969.78	1,018,000.85	1,430,388.94
Total Expenses	19,825,717.80	13,587,251.37	6,920,993.48
Profit / [Loss] before Income Tax	540,396.23	204,088.89	[703,201.73]
Income Tax	[59,139.75]	[8,155.33]	-
Net Profit / [Loss]	481,256.48	195,933.56	[703,201.73]

FINANCIAL ANALYSIS

ITEM	UNIT	2011	2010	2009
LIQUIDITY RATIO
CURRENT RATIO	TIMES	1.02	0.99	0.93
QUICK RATIO	TIMES	0.96	0.68	0.48
ACTIVITY RATIO
FIXED ASSETS TURNOVER	TIMES	20,335,226.69	13,653,734.24	1,803.54
TOTAL ASSETS TURNOVER	TIMES	1.00	2.02	1.87
INVENTORY CONVERSION PERIOD	DAYS	23.56	61.74	83.66
INVENTORY TURNOVER	TIMES	15.49	5.91	4.36
RECEIVABLES CONVERSION PERIOD	DAYS	341.71	116.66	75.90
RECEIVABLES TURNOVER	TIMES	1.07	3.13	4.81
PAYABLES CONVERSION PERIOD	DAYS	381.62	196.22	227.59
CASH CONVERSION CYCLE	DAYS	(16.35)	(17.82)	(68.03)
PROFITABILITY RATIO
COST OF GOODS SOLD	%	93.33	92.06	90.96
SELLING & ADMINISTRATION	%	4.16	7.46	23.70
INTEREST	%	-	-	-
GROSS PROFIT MARGIN	%	6.82	8.95	12.05
NET PROFIT MARGIN BEFORE EX. ITEM	%	2.66	1.49	(11.65)
NET PROFIT MARGIN	%	2.37	1.44	(11.65)
RETURN ON EQUITY	%	104.57	-	-
RETURN ON ASSET	%	2.36	2.90	(21.81)
EARNING PER SHARE	BAHT	12.03	4.90	(17.58)
LEVERAGE RATIO
DEBT RATIO	TIMES	0.98	1.00	1.07
DEBT TO EQUITY RATIO	TIMES	43.37	(322.35)	(15.86)
TIME INTEREST EARNED	TIMES	-	-	-
ANNUAL GROWTH
SALES GROWTH	%	48.94	126.20
OPERATING PROFIT	%	164.78	(129.02)
NET PROFIT	%	145.62	127.86
FIXED ASSETS	%	-	(99.97)
TOTAL ASSETS	%	202.01	109.68

ANNUAL GROWTH : IMPRESSIVE

An annual sales growth is 48.94%. Turnover has increased from THB 13,653,734.24 in 2010 to THB 20,335,226.69 in 2011. While net profit has increased from THB 195,933.56 in 2010 to THB 481,256.48 in 2011. And total assets has increased from THB 6,760,904.85 in 2010 to THB 20,418,685.54 in 2011.

PROFITABILITY : IMPRESSIVE

PROFITABILITY RATIO

Gross Profit Margin	6.82	Acceptable	Industrial Average	9.66
Net Profit Margin	2.37	Impressive	Industrial Average	(0.20)
Return on Assets	2.36	Impressive	Industrial Average	(0.27)
Return on Equity	104.57	Impressive	Industrial Average	(0.72)

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 6.82%. When compared with the industry average, the ratio of the company was lower, this indicated that company may have problems with control over its costs.

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 2.37%, 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 2.36%, 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 104.57%, 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 Stable

LIQUIDITY : ACCEPTABLE

LIQUIDITY RATIO

Current Ratio	1.02	Acceptable	Industrial Average	1.72
Quick Ratio	0.96
Cash Conversion Cycle	(16.35)

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 1.02 times in 2011, increased from 0.99 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 0.96 times in 2011, increased from 0.68 times, by excluding inventory, the company may have problems meeting current liabilities.

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 -17 days.

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

Current Ratio Downtrend

LEVERAGE : RISKY

LEVERAGE RATIO

Debt Ratio	0.98	Acceptable	Industrial Average	0.60
Debt to Equity Ratio	43.37	Risky	Industrial Average	1.67
Times Interest Earned	-		Industrial Average	0.63

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 0.98 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 Uptrend

Times Interest Earned Uptrend

ACTIVITY : SATISFACTORY

ACTIVITY RATIO

Fixed Assets Turnover	20,335,226.69	Impressive	Industrial Average	10.73
Total Assets Turnover	1.00	Acceptable	Industrial Average	1.47
Inventory Conversion Period	23.56
Inventory Turnover	15.49	Impressive	Industrial Average	2.17
Receivables Conversion Period	341.71
Receivables Turnover	1.07	Deteriorated	Industrial Average	3.31
Payables Conversion Period	381.62

The company's Account Receivable Ratio is calculated as 1.07 and 3.13 in 2011 and 2010 respectively. This ratio measures the efficiency of the company in managing its trade debtors to generate revenue. A lower ratio may indicate over extension and collection problems. Conversely, a higher ratio may indicate an overtly stringent policy. In this case, the company's A/R ratio in 2011 decreased from 2010. This would suggest the company had deteriorated in the management of its debt collections.

Inventory Turnover in Days Ratio indicates the liquidity of inventory. It estimates the number of days that it will take to sell the current inventory. Inventory is particularly sensitive to change in business activities. The inventory turnover in days has decreased from 62 days at the end of 2010 to 24 days at the end of 2011. This represents a positive trend. And Inventory turnover has increased from 5.91 times in year 2010 to 15.49 times in year 2011.

The company's Total Asset Turnover is calculated as 1 times and 2.02 times in 2011 and 2010 respectively. This ratio is determined by dividing total assets into total sales turnover. The ratio measures the activity of the assets and the ability of the firm to generate sales through the use of the assets.

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 Downtrend

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.53.29
UK Pound	1	Rs.83.96
Euro	1	Rs.71.87

INFORMATION DETAILS

Report Prepared by :

NLM

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.