MIRA INFORM REPORT

Report Date :

16.08.2014

IDENTIFICATION DETAILS

Name :	AIVES LTD.
Registered Office :	Ul Fruktovaya D 7, Korp 2, 117556 G Moskva
Country :	Russia
Financials (as on) :	31.12.2013
Date of Incorporation :	17.02.1998
Com. Reg. No.:	1027739260383
Legal Form :	Limited liability companies
Line of Business :	Manufacture of jewellery and related articles
No. of Employees	Not Available

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 – June 1, 2014

Country Name	Previous Rating (31.03.2014)	Current Rating (01.06.2014)
Russia	A2	B1

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

RUSSIA ECONOMIC OVERVIEW

Russia has undergone significant changes since the collapse of the Soviet Union, moving from a globally-isolated, centrally-planned economy towards a more market-based and globally-integrated economy, but stalling as a partially reformed, statist economy with a high concentration of wealth in officials' hands. Economic reforms in the 1990s privatized most industry, with notable exceptions in the energy and defense-related sectors. The protection of property rights is still weak and the private sector remains subject to heavy state interference. Russia is one of the world's leading producers of oil and natural gas and is also a top exporter of metals such as steel and primary aluminum. Russia's manufacturing sector is generally uncompetitive on world markets and is geared toward domestic consumption. Russia's reliance on commodity exports makes it vulnerable to boom and bust cycles that follow the volatile swings in global prices. The economy, which had averaged 7% growth during 1998-2008 as oil prices rose rapidly, was one of the hardest hit by the 2008-09 global economic crisis as oil prices plummeted and the foreign credits that Russian banks and firms relied on dried up. Slowly declining oil prices over the past few years and difficulty attracting foreign direct investment have contributed to a noticeable slowdown in GDP growth rates. In late 2013, the Russian Economic Development Ministry reduced its growth forecast through 2030 to an average of only 2.5% per year, down from its previous forecast of 4.0 to 4.2%. In 2014, following Russia's military intervention in Ukraine, prospects for economic growth declined further, with expections that GDP growth could drop as low as zero

Source : CIA

Company name and address

OOO "AYVES"

Ul Fruktovaya d 7, korp 2,
117556 g Moskva

Tel: 74999053088

Company summary

Legal form

Limited liability companies (OOO)

Established on

17/02/1998 - Limited liability companies (OOO)

Registered on

26/09/2002, MEZHRAYONNAYA INSPEKTSIYA MNS ROSSII № 39 PO G MOSKVE, RegNr.: 1027739260383 Tax number: 7706163730 Statistical number: 18309927

Registered capital

RUB

30 000,-

Owner

Ramesh KHimatlal SHakh

%

100

Sole Executive Body

Larisa Nikolaevna Solodova Managing director

General data

Main activity: Manufacture of jewellery and related articles n.e.c.

(36.22.3)

Full name:
Obshchestvo s ogranichennoy otvetstvennostyu "AYVES"

Name in foreign language:
Aives Ltd.

Short name:
OOO "AYVES"

Residence address:
ul Fruktovaya d 7, korp 2, 117556 g Moskva
Tel:
74999053088

According to the information from open sources, the main activity of OOO “Ayves” is diamond cutting.

Other activities

:

Other publishing

(22.15)

Printing n.e.c.

(22.22)

Production of abrasive products

(26.81)

Manufacture of jewellery and related articles n.e.c.

(36.22)

Manufacture of jewellery and related articles n.e.c.

(36.22.5)

Recycling of metal waste and scrap

(37.10.22)

Agents specializing in the sale of particular products or ranges of products n.e.c.

(51.18.24)

Wholesale of other household goods

(51.47.34)

Wholesale of other intermediate products

(51.56.3)

Other wholesale trade

(51.70)

Other retail sale in specialized stores

(52.48.22)

Market research and public opinion polling

(74.13.1)

Advertising

(74.40)

Other business activities not elsewhere classified

(74.84)

Annual turnover

31/12/2006

Enterprise turnover

RUB

261 860 000,-

31/12/2007

Enterprise turnover

RUB

272 651 000,-

31/12/2008

Enterprise turnover

RUB

231 773 000,-

31/12/2009

Enterprise turnover

RUB

174 709 000,-

31/12/2010

Enterprise turnover

RUB

429 666 000,-

31/12/2011

Enterprise turnover

RUB

587 747 000,-

31/12/2012

Enterprise turnover

RUB

399 929 000,-

31/12/2013

Enterprise turnover

RUB

252 587 000,-

Remarks

According to the research, affiliation through the director of OOO “Ayves”, Solodova Larisa Nikolaevna, with other legal persons has not been revealed. OOO “Ayves” has not participated in court cases. According to the information, disclosed by the Federal Tax Service, OOO “Ayves” does not have tax arrears, the company is not going to be excluded from the state register as non-active. According to the information, disclosed by the Pension Fund of Russian Federation, OOO “Ayves” does not have delays in social payments. According to the information, disclosed by the Federal Labor Service, OOO “Ayves” does not plan to attract foreign employees. According to the research, OOO “Ayves” does not meet the most frequently encountered in practice characteristics of unreliable companies (so-called “shell” companies), developed by the Federal Tax Service of Russian Federation. OOO “Ayves” is not in the list of default debtors, the Register of unfair suppliers, the blacklist of Russian companies. The management of the company is not in the list of default debtors, the register of disqualified persons, the blacklist of Russian Private Persons.

A. The enclosed balance of 2011 is originated from official source, no data available about authentication. (31.12.2011 - 1000 RUB) - Warning! The figures stated in the balance sheet may contain error(s).
B. The enclosed balance of 2012 is originated from official source, no data available about authentication. (31.12.2012 - 1000 RUB) - Warning! The figures stated in the balance sheet may contain error(s).
C. The enclosed balance of 2013 is originated from other source, no data available about authentication. (31.12.2013 - 1000 RUB) - Warning! The figures stated in the balance sheet may contain error(s).

Financial data

balance	A 31.12.2011	B 31.12.2012	C 31.12.2013
1. ASSETS
I. FIXED ASSETS
Intangible assets	0	0	0
The results of research and development	0	0	0
Intangible research assets	0	0	0
Tangible research assets	0	0	0
Fixed assets	2 442	1 930	1 438
Profitable investments in tangible assets	0	0	0
Financial investments	0	0	0
Deferred tax assets	12	14	194
Other non-current assets	0	0	0
TOTAL IN SECTION I.	2 454	1 944	1 632
II. CURRENT ASSETS
Inventories	113 874	130 340	147 000
VAT on acquired assets	22 842	23 320	25 756
Accounts receivable	89 699	40 547	24 867
Financial investments (excluding the monetary equivalent)	0	0	0
Cash and monetary equivalents	830	31 721	4
Other current assets	0	0	0
TOTAL IN SECTION II.	227 245	225 928	197 627
BALANCE	229 699	227 872	199 259
2. LIABILITIES
III. CAPITAL AND RESERVES
Authorized capital (share capital, charter capital, deposits capital, partners capital)	30	30	30
Treasury stock	0	0	0
Revaluation of fixed assets	0	0	0
Additional capital (without revaluation)	0	0	0
Reserve capital	0	0	0
Retained earnings (uncovered loss)	-1 521	1 868	2 144
TOTAL IN SECTION III.	-1 491	1 898	2 174
IV. LONG-TERM LIABILITIES
Borrowed funds	214 982	225 831	196 023
Deferred tax liabilities	16	9	144
Provisions	0	0	0
Other liabilities	0	0	0
TOTAL IN SECTION IV.	214 998	225 840	196 167
V. SHORT-TERM LIABILITIES
Borrowed funds	15 824	0	0
Payables	368	134	99
Deferred income	0	0	0
Provisions	0	0	819
Sonstige Verbindlichkeiten	0	0	0
TOTAL IN SECTION V.	16 192	134	918
BALANCE	229 699	227 872	199 259

A. The enclosed profit and loss account of 2011 is originated from official source, no data available about authentication. (31.12.2011 - 1000 RUB)
B. The enclosed profit and loss account of 2012 is originated from official source, no data available about authentication. (31.12.2012 - 1000 RUB)
C. The enclosed profit and loss account of 2013 is originated from other source, no data available about authentication. (31.12.2013 - 1000 RUB)

Profit And Loss Account	A 31.12.2011	B 31.12.2012	C 31.12.2013
Turnover	587 747	399 929	252 587
Cost of sales	553 350	383 107	240 065
Gross profit (loss)	34 397	16 822	12 522
Selling expenses	10 211	1 604	6 321
Administrative expenses	7 209	7 456	7 550
Sales profit (loss)	16 977	7 762	-1 349
Earnings from other entities	0	0	0
Interest receivable	0	0	0
Interest payable	0	0	971
Other operating income	963 559	458 662	95 013
Other operating expenses	966 206	462 168	92 316
Profit (loss) before tax	14 330	4 256	377
Current profit tax	320	876	146
Permanent tax liabilities (assets)	25	15	25
Change in deferred tax liabilities	0	-7	135
Change in deferred tax assets	-2 571	2	180
Different	0	0	0
Net profit (loss)	11 439	3 389	276
Results of fixed assets revaluation, non-includedin net profit/loss for period	0	0	0
Result of other transactions, non included in net profit/loss for period	0	0	0
Total financial result for period	11 439	3 389	276

Ratios

2011

2012

2013

Quick ratio

5,59

539

251

Current ratio

7,08

1209

1485

Average Collection Period

27,85

59,44

47,26

Payables turnover Period

0,12

0,24

0,18

Debt ratio

1,01

0,99

0,99

Equity to total assets ratio

-0,01

0,01

0,01

Funding ratio

-0,01

0,01

0,01

Return on sales

1,95

0,85

0,11

Return on Assets

6,24

1,87

0,68

Return on Equity

n/a

1665

13,56

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.61.06
UK Pound	1	Rs.101.84
Euro	1	Rs.81.56

INFORMATION DETAILS

Analysis Done by :	RAS
Report Prepared by :	NIS

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.