MIRA INFORM REPORT

Report Date :

15.05.2013

IDENTIFICATION DETAILS

Name :	PACIFIC LUXURY [THAILAND] LIMITED
Registered Office :	Unit 701, 7^th Floor, Gemopolis Industrial Estate, 64/46 Soi Sukhapiban 2 [Soi 31], Dokmai, Praves, Bangkok 10250
Country :	Thailand
Financials (as on) :	31.12.2012
Date of Incorporation :	11.06.2010
Com. Reg. No.:	0105553070308
Legal Form :	Private Limited Company
Line of Business :	Manufacturer, Importer and Exporter of Jewelry Products
No. of Employees :	30

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 :	Slow but Correct
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 – March, 31^st, 2013

Country Name	Previous Rating (31.12.2012)	Current Rating (31.03.2013)
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 achieved steady growth due largely to industrial and agriculture exports - mostly electronics, agricultural commodities, automobiles and parts, and processed foods. Thailand is trying to maintain growth by encouraging domestic consumption and public investment to offset weak exports in 2012. Unemployment, at less than 1% of the labor force, stands as one of the lowest levels in the world, which puts upward pressure on wages in some industries. Thailand also attracts nearly 2.5 million migrant workers from neighboring countries. The Thai government is implementing a nation-wide 300 baht ($10) per day minimum wage policy and deploying new tax reforms designed to lower rates on middle-income earners. The Thai economy has weathered internal and external economic shocks in recent years. The global economic severely cut Thailand's exports, with most sectors experiencing double-digit drops. In 2009, the economy contracted 2.3%. However, in 2010, Thailand's economy expanded 7.8%, its fastest pace since 1995, as exports rebounded. In late 2011 growth was interrupted by historic flooding in the industrial areas in Bangkok and its five surrounding provinces, crippling the manufacturing sector. Industry recovered from the second quarter of 2012 onward with GDP growth at 5.5% in 2012. The government has approved flood mitigation projects worth $11.7 billion, which were started in 2012, to prevent similar economic damage, and an additional $75 billion for infrastructure over the next seven years with a plan to start in 2013.

Source : CIA

Company name

PACIFIC LUXURY [THAILAND] LIMITED

SUMMARY

BUSINESS ADDRESS : UNIT 701, 7^th FLOOR, GEMOPOLIS INDUSTRIAL ESTATE,

64/46 SOI SUKHAPIBAN 2 [SOI 31],

DOKMAI, PRAVES, BANGKOK 10250

TELEPHONE : [66] 2727-0640-1

FAX : [66] 2727-0642

E-MAIL ADDRESS : nilesh@pacificluxury.cn

REGISTRATION ADDRESS : SAME AS BUSINESS ADDRESS

ESTABLISHED : 2010

REGISTRATION NO. : 0105553070308

TAX ID NO. : 3033960082

CAPITAL REGISTERED : BHT. 4,000,000

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

SHAREHOLDER’S PROPORTION : INDIAN : 100%

FISCAL YEAR CLOSING DATE : DECEMBER 31

LEGAL STATUS : PRIVATE LIMITED COMPANY

EXECUTIVE : MR. KISHOR DASHRATHLAL GADANI, INDIAN

MANAGING DIRECTOR

NO. OF STAFF : 30

LINES OF BUSINESS : JEWELRY PRODUCTS

MANUFACTURER, IMPORTER AND EXPORTER

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 June 11, 2010 as a private limited company under the registered name PACIFIC LUXURY [THAILAND] LIMITED by Indian groups, with the business objective to manufacture various kinds of jewelry products for exports. It currently employs approximate 30 staff.

The subject’s registered address is 64/46 Gemopolis Industrial Estate, Soi Sukhapiban 2 [Soi 31], Dokmai, Praves, Bangkok 10250, and this is the subject’s current operation address.

THE BOARD OF DIRECTOR

Name	Nationality	Age
Mr. Kishor Dashrathlal Gadani	Indian	39
Mr. Umesh Premjibhai Barod	Indian	45
Ms. Siriporn Poonpuang	Thai	31

AUTHORIZED PERSON

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

MANAGEMENT

Mr. Kishor Dashrathlal Gadani is the Managing Director.

He is Indian nationality with the age of 39 years old.

Mr. Nilesh Sagye is the General Manager.

He is Indian nationality.

BUSINESS OPERATIONS

The subject is engaged in manufacturing and exporting various designs of jewelry products such as rings, earrings, bracelet, necklace, pendant and etc.

PURCHASE

Most of diamonds and gemstones for production are imported from India, Pakistan, Hong Kong and Brazil, the remaining is purchased from local suppliers.

EXPORT

100% of the products is exported to India, Hong Kong, Japan and European countries.

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 for the past two years.

CREDIT

Local bills are paid by cash or on the credits term of 30-60 days.

Imports are by T/T.

Exports are against T/T.

BANKING

Bangkok Bank Public Co., Ltd.

The Siam Commercial Bank Public Co., Ltd.

EMPLOYMENT

The subject currently employs approximately 30 staff.

LOCATION DETAILS

The premise is rented for administrative office and factory at the heading address. Premise is located in jewelry industrial area.

Branch office is located at 11^th Floor, Room No. E1, Surawong Watthanakarn Building, 322/16 Surawong Rd., Sipraya, Bangrak, Bangkok 10500.

COMMENT

Subject is a manufacture, distributor and exporter of jewelry products. The products are produced with diamond, gemstone, semi-precious stone, 18 K gold and platinum. Its business in 2011 was outstanding with demand in exported countries like India and Hong Kong were promising.

Since the beginning of 2012 its sales have continuously growing with increasing order from overseas markets.

FINANCIAL INFORMATION

The capital was registered at Bht. 4,000,000 divided into 40,000 shares of Bht. 100 each with fully paid.

THE SHAREHOLDERS LISTED WERE : [as at July 24, 2012]

NAME	HOLDING	%
Mr. Kishor Dashrathlal Gadani Nationality: Indian Address : 64/46 Soi Sukhapiban 2 [Soi 31], Dokmai, Praves, Bangkok 10250	20,000	50.00
Mr. Deepak Gunwantal Gundi Nationality: Indian Address : 79 Chalermprakiat R.9 Soi 8, Nongbon, Praves, Bangkok	19,600	49.00
Mr. Umesh Premjibhai Barod Nationality: Indian Address : 79 Chalermprakiat R.9 Soi 8, Nongbon, Praves, Bangkok	400	1.00

Total Shareholders : 3

Share Structure [as at July 24, 2012]

Nationality	Shareholders	No. of Share	% Shares
Thai	-	-	-
Foreign – Indian	3	40,000	100.00
Total	3	40,000	100.00

NAME OF AUDITOR & CERTIFIED PUBLIC ACCOUNTANT NO.

Mr. Manus Wangthamnoon No. 3134

Note:

The 2012 financial statement has not available during investigation.

BALANCE SHEET [BAHT]

The latest financial figures published for December 31, 2011 & 2010 were:

ASSETS

Current Assets	2011	2010
Cash and Cash Equivalents	190,127.93	866,193.78
Trade Accounts & Other Receivable	46,938,426.17	4,102,582.17
Inventories	6,395,478.21	1,339,128.06
Other Current Assets	237,337.50	243,018.77
Total Current Assets	53,761,369.81	6,550,922.78
Fixed Assets	10,065,279.81	10,550,984.48
Other Non-current Assets	47,200.00	46,900.00
Total Assets	63,873,849.62	17,148,807.26

LIABILITIES & SHAREHOLDERS’ EQUITY [BAHT]

Current Liabilities	2011	2010
Trade Accounts & Other Payable	61,853,990.98	-
Current Portion of Long-term Liabilities - Installment	1,166,769.28	2,445,339.87
Other Current Liabilities	137,285.96	33,527.89
Total Current Liabilities	63,158,046.22	2,478,867.76
Long-term Liabilities - Installment	-	1,166,769.28
Long-term Loan from Related Person	-	10,274,785.19
Total Liabilities	63,158,046.22	13,920,422.23
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	[3,284,196.60]	[771,614.97]
Total Shareholders' Equity	715,803.40	3,228,385.03
Total Liabilities & Shareholders' Equity	63,873,849.62	17,148,807.26

PROFIT & LOSS ACCOUNT

Revenue	2011	June 11, 2010 – Dec. 31, 2010
Sales	132,929,359.91	5,164,240.71
Other Income	471,565.83	362,692.93
Total Revenues	133,400,925.74	5,526,933.64
Expenses
Cost of Goods Sold	132,851,421.78	5,176,543.56
Selling Expenses	327,001.31	-
Administrative Expenses	2,431,898.67	976,090.45
Total Expenses	135,610,321.76	6,152,634.01
Profit/Loss] before Financial Costs & Income Tax	[2,209,396.02]	[625,700.37]
Financial Costs	[303,185.61]	[145,914.60]
Profit/[Loss] before Income Tax	[2,512,581.63]	[771,614.97]
Income Tax	-	-
Net Profit / [Loss]	[2,512,581.63]	[771,614.97]

FINANCIAL ANALYSIS

ITEM	UNIT	2011	2010
LIQUIDITY RATIO
CURRENT RATIO	TIMES	0.85	2.64
QUICK RATIO	TIMES	0.75	2.00
ACTIVITY RATIO
FIXED ASSETS TURNOVER	TIMES	13.21	0.49
TOTAL ASSETS TURNOVER	TIMES	2.08	0.30
INVENTORY CONVERSION PERIOD	DAYS	17.57	94.42
INVENTORY TURNOVER	TIMES	20.77	3.87
RECEIVABLES CONVERSION PERIOD	DAYS	128.88	289.96
RECEIVABLES TURNOVER	TIMES	2.83	1.26
PAYABLES CONVERSION PERIOD	DAYS	169.94	-
CASH CONVERSION CYCLE	DAYS	(23.48)	384.39
PROFITABILITY RATIO
COST OF GOODS SOLD	%	99.94	100.24
SELLING & ADMINISTRATION	%	2.08	18.90
INTEREST	%	0.23	2.83
GROSS PROFIT MARGIN	%	0.41	6.78
NET PROFIT MARGIN BEFORE EX. ITEM	%	(1.66)	(12.12)
NET PROFIT MARGIN	%	(1.89)	(14.94)
RETURN ON EQUITY	%	(351.02)	(23.90)
RETURN ON ASSET	%	(3.93)	(4.50)
EARNING PER SHARE	BAHT	(62.81)	(19.29)
LEVERAGE RATIO
DEBT RATIO	TIMES	0.99	0.81
DEBT TO EQUITY RATIO	TIMES	88.23	4.31
TIME INTEREST EARNED	TIMES	(7.29)	(4.29)
ANNUAL GROWTH
SALES GROWTH	%	2,474.03	-
OPERATING PROFIT	%	253.11	-
NET PROFIT	%	(225.63)	-
FIXED ASSETS	%	(4.60)	-
TOTAL ASSETS	%	272.47	-

PROFITABILITY : RISKY

PROFITABILITY RATIO

Gross Profit Margin	0.41	Deteriorated	Industrial Average	15.83
Net Profit Margin	(1.89)	Deteriorated	Industrial Average	0.22
Return on Assets	(3.93)	Deteriorated	Industrial Average	0.24
Return on Equity	(351.02)	Deteriorated	Industrial Average	0.39

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 0.41%. 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 -1.89%. When compared with the industry average, the ratio of the company was lower.

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. When compared with the industry average, it was lower, the company's figure is -3.93%.

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. When compared with the industry average, it was lower, the company's figure is -351.02%.

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

Return on Assets Downtrend

Return on Equity Downtrend

LIQUIDITY : ACCEPTABLE

LIQUIDITY RATIO

Current Ratio	0.85	Risky	Industrial Average	1.69
Quick Ratio	0.75
Cash Conversion Cycle	(23.48)

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 0.85 times in 2011, decreased from 2.64 times, then the company may have problems meeting its short-term obligations. 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 0.75 times in 2011, decreased from 2 times, then the company has not enough current assets that presumably can be quickly converted to cash for pay financial obligations.

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 -24 days.

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

Current Ratio Uptrend

LEVERAGE : RISKY

LEVERAGE RATIO

Debt Ratio	0.99	Acceptable	Industrial Average	0.56
Debt to Equity Ratio	88.23	Risky	Industrial Average	1.31
Times Interest Earned	(7.29)	Risky	Industrial Average	0.96

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.

Times Interest Earned measuring a company's ability to meet its debt obligations. Ratio is -7.29 lower than 1, so the company is not generating enough cash from EBIT to meet its interest obligations.

Debt Ratio shows the proportion of a company's assets which are financed through debt. The company's figure is 0.99 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 Downtrend

Times Interest Earned Downtrend

ACTIVITY : IMPRESSIVE

ACTIVITY RATIO

Fixed Assets Turnover	13.21	Impressive	Industrial Average	4.89
Total Assets Turnover	2.08	Impressive	Industrial Average	1.36
Inventory Conversion Period	17.57
Inventory Turnover	20.77	Impressive	Industrial Average	2.04
Receivables Conversion Period	128.88
Receivables Turnover	2.83	Satisfactory	Industrial Average	3.46
Payables Conversion Period	169.94

The company's Account Receivable Ratio is calculated as 2.83 and 1.26 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 increased from 2010. This would suggest the company had good performance 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 94 days at the end of 2010 to 18 days at the end of 2011. This represents a positive trend. And Inventory turnover has increased from 3.87 times in year 2010 to 20.77 times in year 2011.

The company's Total Asset Turnover is calculated as 2.08 times and 0.3 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 Downtrend

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.

- 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 –

- Gem & Jewellery Export Promotion Council in its statistical data has shown the export of polished diamonds to have increase by 28 % in February 2013. Compared to $ 1.4 bn worth of polished diamond export in February, 2012, India exported $ 1.84 billion worth of polished diamonds in February 2013. A senior executive of GJEPC said, “Export of cut and polished diamonds started falling month-wise after the imposition of 2 % of import duty on the polished diamonds. But February, 2013 has given a new ray of hope to the industry as the export of polished diamonds has actually increased by 28 %. It means the industry  is on the track of recovery and round tripping of diamonds has stopped completely.” Demand has started coming from the US, the UK, Japan and China. India’s polished diamond export is expected to cross $ 21 bn in 2013-14.

- The banking sector has started exercising restraint while following prudent risk management norms when lending money to gems and jewellery sector. This follows the implementation of Basel III accord – a global voluntary regulatory standard on bank capital adequacy, stress testing and market liquidity.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.54.63
UK Pound	1	Rs.83.67
Euro	1	Rs.71.02

INFORMATION DETAILS

Report Prepared by :

SDA

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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