MIRA INFORM REPORT

Report Date :

22.10.2014

IDENTIFICATION DETAILS

Name :	GREGORY BROS PTY LTD
Registered Office :	The Trust Building, Level 5, 155 King Street, Sydney, New South Wales, 2000
Country :	Australia
Date of Incorporation :	16.03.1982
Com. Reg. No.:	Australian Company Number: 002389817
Legal Form :	Australian Proprietary Company, Limited by Shares
Line of Business :	The Subject engages in manufacturing, wholesale and retail of fine jewellery, precious stones and high end watches.
No. of Employees :	100

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 1, 2014

Country Name	Previous Rating (31.03.2014)	Current Rating (01.06.2014)
Australia	A1	A1

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

AUSTRALIA - ECONOMIC OVERVIEW

The Australian economy has experienced continuous growth and features low unemployment, contained inflation, very low public debt, and a strong and stable financial system. By 2012, Australia had experienced more than 20 years of continued economic growth, averaging 3.5% a year. Demand for resources and energy from Asia and especially China has grown rapidly, creating a channel for resources investments and growth in commodity exports. The high Australian dollar has hurt the manufacturing sector, while the services sector is the largest part of the Australian economy, accounting for about 70% of GDP and 75% of jobs. Australia was comparatively unaffected by the global financial crisis as the banking system has remained strong and inflation is under control. Australia has benefited from a dramatic surge in its terms of trade in recent years, stemming from rising global commodity prices. Australia is a significant exporter of natural resources, energy, and food. Australia's abundant and diverse natural resources attract high levels of foreign investment and include extensive reserves of coal, iron, copper, gold, natural gas, uranium, and renewable energy sources. A series of major investments, such as the US$40 billion Gorgon Liquid Natural Gas project, will significantly expand the resources sector. Australia is an open market with minimal restrictions on imports of goods and services. The process of opening up has increased productivity, stimulated growth, and made the economy more flexible and dynamic. Australia plays an active role in the World Trade Organization, APEC, the G20, and other trade forums. Australia has bilateral free trade agreements (FTAs) with Chile, Malaysia, New Zealand, Singapore, Thailand, and the US, has a regional FTA with ASEAN and New Zealand, is negotiating agreements with China, India, Indonesia, Japan, and the Republic of Korea, as well as with its Pacific neighbors and the Gulf Cooperation Council countries, and is also working on the Trans-Pacific Partnership Agreement with Brunei Darussalam, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, the US, and Vietnam

Source : CIA

CORPORATE DETAILS

Verified Address

Subject name GREGORY BROS PTY LTD Business address The Trust Building, Level 5 155 King Street Town Sydney Province New South Wales Zip / Postal code 2000 Country Australia Telephone +61 2 92213077 Fax +61 2 92214560 Email info@gregoryjewellers.com.au Website www.gregoryjewellers.com.au Remarks The address provided Level 10, 70 Castlereagh Street, Sydney, NSW, Australia belongs to the Subject's flagship store.

Registered address The Trust Building, Level 5 155 King Street Town Sydney Province New South Wales Zip / Postal code 2000 Country Australia

SUMMARY DETAILS

Report Summary

Date registered 16/03/1982 Legal form Australian Proprietary Company, Limited by Shares Key personnel Christopher Gregory Line of business The Subject’s business consist of manufacturing, wholesale and retail of fine jewellery, precious stones and high end watches. Staff employed 100 employees

Paid-up capital AUD 12.00 Sales turnover / Revenue / Income AUD 30,000,000.00 (Estimated Non-Consolidated 12 months, 30/06/2014)

CREDIT RISK OUTLOOK

Credit Risk Interpretation

Credit risk theory Reasonable financial and operational base. Small credits may be considered with some confidence that commitments will be sustained under normal circumstances. This is based on criterions such as years of establishment, number of employees, sales turnover, profit after tax, total assets, reserve, and others. A cautious credit control policy applies. Paid-up capital AUD 12.00 Sales turnover / Revenue / Income AUD 30,000,000.00 (Estimated Non-Consolidated 12 months, 30/06/2014)

Subject’s Credit Risk Analysis

Country risk Country risk is minimal Operation trend Operational trend is steady Management experience Management is adequately experienced Financial performance Financial performance is undetermined

Organisation structure Organisational structure is stable Detrimental No detrimental found Payment history No payment delays noted Credit amount requested Not described.

STATUTORY DETAILS

Registry Information

Date registered 16/03/1982 Legal form Australian Proprietary Company, Limited by Shares Registration number Australian Company Number: 002389817 Registered authority Australian Securities and Investments Commission Tax / VAT number Australian Business Number: 20102419004

Statutory status Active Previous name Z Y B F PTY LTD (initial) Change of legal form None reported.

BOARD OF MANAGEMENT

Key Personnel

Name Christopher Gregory Designation Managing Director Name Lahdo Gregory Designation Director Name Isak Gregory Designation Director

BOARD OF DIRECTORS

Appointments

Name Lahdo Gregory Title Director Appointment date 16/03/82 Address 12 Seymour Street Croydon Park, NSW 2133 Australia Biography Born on 01-01-1946 in Midyat, Turkey. Name Isak Gregory Title Director Appointment date 16/03/82 Address 10 Rose Street Croydon Park, NSW 2133 Australia Biography Born on 01-01-1942 in Midyat, Turkey. Name Christopher Gregory Title Director and Company Secretary Appointment date 16/03/82 Address 37 Lucretia Avenue Longueville, NSW 2066 Australia Biography Born on 01-01-1950 in Midyat, Turkey.

Staff employed 100 employees

SHARE CAPITAL

Composition

Authorized capital AUD12.00 Number / Type of shares 12 Ordinary Shares Share par value AUD1.00 Issued capital AUD12.00

Paid-up capital AUD12.00

OWNERSHIP / SHAREHOLDERS

Composition

Shareholder name Lahdo Gregory Address 12 Seymour Street Croydon Park, NSW 2133 Australia Number / Type of shares 6 Ordinary Shares Percentage (%) of shares 50% Shareholder name Christopher Gregory Address 37 Lucretia Avenue Longueville, NSW 2066 Australia Number / Type of shares 6 Ordinary Shares Percentage (%) of shares 50%

CORPORATE AFFILIATIONS AND RELATED COMPANIES

Structure

Company name GREGORY JEWELLERS PTY LIMITED Affiliation type Associate Country of business 37 Lucretia Avenue Longueville, NSW 2066 Australia

BANK AND MORTGAGES

Bank Details

Name of bank Commonwealth Bank of Australia Address Australia

Comments It is generally not the policy of local banks to provide credit status information to non-related parties. However, interested parties are advised to first consult with the Subject if banker''s references are required.

Mortgages

None reported.

Legal Filings

Bankruptcy filings None reported. Court judgements None reported.

Tax liens None reported. Others None reported.

FINANCIAL STATISTICS

Description

Financial statement source External Sources Financial statement date 30/06/14 Style of financial statement Estimated key figures

Currency of financial statement Australia Dollar (AUD) Exchange rate 1 USD = AUD 1.14 as of 22-10-2014

Concise Financial Data	Consolidation style	Non Consolidated
	Currency	Australia Dollar (AUD)
	Date of financial year end	30/06/14
	Length of financial accounts	12 months
	Sales turnover / Revenue / Income	30,000,000.00

BUSINESS DETAILS

Operational Details

Main activities The Subject engages in manufacturing, wholesale and retail of fine jewellery, precious stones and high end watches. The Subject has 14 boutique showrooms/stores located across New South Wales and Victoria, Australia. Products and services Fine Diamonds Fine Jewellery High End Watches Accessories Precious Stones Brands LONGINES RAYMOND WEIL TAG HEUER TISSOT RADO GUCCI OMEGA ORIS CARTIER DIOR IWC JAEGER LE COULTRE

Purchases

International The Subject sources its product(s) / material(s) from countries in Asia and Europe.

Sales

Local The Subject sells its product(s) locally.

International None reported.

Key events
Gregory turns 45

With a jewellery-making heritage spanning over a thousand years, it was probably inevitable that the Gregory family would succeed when they opened up their jewellery manufacturing and wholesale business in Sydney in 1978.

Isak, Lahdo & Christopher Gregory, the co-directors of Gregory Jewellers, began producing silver filigree jewellery in the Aramaic village of Midyat during the late 1950s, as apprentices to the master jewellers, known as the Asra family.

According to Christopher and Lahdo, jewellery-making, particularly silver filigree work, was the main trade for all the men in the village − and has been so for over a thousand years.

Nonetheless the quality and popularity of the brothers’ designs prompted their uncle, Isaac, to join forces with them and formally establish Gregory Bros as a
business in 1967.

During the next decade, the business shifted its focus from the manufacture of silver filigree jewellery to fine diamond jewellery, and became increasingly commercially successful in Turkey. However due to ‘political unrest’ in the country, the Gregory Family, despite knowing very little English, decided to migrate to Australia, “the lucky country” from 1976 to 1978.

When the Gregory trio and their families arrived in Sydney they set up a workshop in the centre of the CBD and began manufacturing the precious diamond jewellery that had proved so successful in their homeland.

The business quickly established itself as a trusted supplier to “some of Australia’s most luxurious and respected jewellery brands” and during its peak, in the mid-1980s, boasted more than “1500 loyal clients” in Australia, New Zealand and Fiji.

However, Gregory Bros’ fortunes took a dramatic turn for the worse in the late 1980s due a confluence of economic factors including the devastating 1987 stock market crash and the resulting drop in property prices.

Edward Gregory, son of Lahdo Gregory and joint CEO of Gregory Jewellers today with Helen Gregory, daughter of Christopher Gregory, says that in many ways these outside factors “forced” the family business to move into retail.

“Wholesale business was really slow,” he explains, “and we were slowly starting to go under due to what was going on around us.

“Many of our jewellery clients were not paying their accounts and a lot of our stock had to be written off completely when some of our clients were declared bankrupt.

“We were quite happy being manufacturers and wholesalers but because the market changed we had to change otherwise we would have gone bankrupt too.”

The three families re-mortgaged their homes and then contacted numerous shopping centres in a bid to establish a retail outlet.

“Unfortunately as our name wasn’t recognised in the retail market at the time many shopping centres didn’t want to know us but thankfully, the leasing manager at Blacktown WestPoint, Jim Wakeling, gave us an opportunity.”

In 1989, the Gregory’s opened the doors to their first store. Called ‘Diamondland’ to differentiate it from their then still active manufacturing business, the store took about six months to establish successfully.

“Our aunt and mothers, Gulay, Leyla and Rose took on the retail work. The first six months were difficult but after that they learnt what they were doing, how to build relationships, how to close a sale, etc, and the business began to take off,” explains Helen.

A few years later after the Gregorys opened more stores, the Diamondland name was replaced with ‘Gregory Jewellers’, and gradually began to expand their retail empire further while winding back the wholesale side of the business.

Today the business encompasses 14 “boutique showrooms” throughout Sydney.

Each is stocked with rings and diamond jewellery, designed and manufactured by the company’s jewellers as well as locally designed but imported jewellery and an extensive collection of Swiss watches including Baume and Mercier, Bell & Ross, Breitling, Cartier, Dior, Gucci, IWC, Jaeger Le Coultre, Longines, Omega, Oris, Rado, TAG Heuer, Tissot, TW Steel and U-Boat.

Helen says the company’s success can largely be attributed to the fact that the Gregorys are “yes” people who cater to their customers’ needs for bespoke designs.

“We have always been ‘yes’ people,” she says. “We would never say ‘no’ to a customer − whatever a customer desires we aim to deliver.

“I guess that’s what makes us stand out from everybody else. As experienced jewellers we have the ability to deliver bespoke designs and that’s increasingly important as more and more customers want the opportunity to create something unique from a sketch.”

Edward agrees, readily acknowledging that the business is moving “in the opposite direction” of many of its competitors by manufacturing most of its stock.

“With the high cost of labour the cost of manufacturing is such that a jeweller cannot be globally competitive if they manufacture in Australia but nonetheless instead of focussing on more affordable imports we are expanding our local manufacturing business so we can give our customers a product that is 100 percent Australian-made and 100 percent Gregory-made from design to manufacture.

“We believe that by doing this we are maintaining our soul and that we haven’t given away what our parents have inherited – being a history of more than 1000 years of jewellery-making experience – for the lure of the dollar.”

“It probably makes it more difficult to compete but we’re very comfortable with the direction were taking.”

Helen adds that although the business does have “some ready-to-wear jewellery made overseas” it is designed locally and the “production process is tailored to meet our standards, under strict quality control”.

“We will however never deviate from making our own engagement rings although some High Street jewellers have already done so.”

Edward and Helen are both adamant that Gregory Jewellers will always remain true to its family’s cultural heritage.

Isak, Lahdo and Christopher Gregory are still directors of the business and are not only actively involved in overseeing the jewellery design and manufacturing side of operations but also find the time to regularly visit their stores – Lahdo and Chris often still work seven days a week.

Furthermore Edward and Helen are not the only members of the Gregory families’ second generation to be involved in the family business.

Edward’s younger brother Robert is Gregory Jewellers chief operating officer, while his older brother Simon manages the Castle Hill boutique. Helen’s sister Suellen is the group visual merchandising manager, based in Bondi Junction, and her youngest sister Sara the noutique director of Gregory Jewellers newest boutique in Westfield Chatswood.

The family’s cultural heritage will also be spreading its roots further in the coming years.

After operating so successfully in NSW for the last 45 years, Helen and Edward say the family is finally “open to expanding nationally”.

Although reluctant to reveal their expansion plans in great detail, they are happy to say that their first interstate store, in Melbourne’s Highpoint shopping centre, is due to open this March.

Source: www.jewelleryworld.net.au

Business Facilities and Assets

Premises The Subject operates from the verified heading address consisting of an administrative office.

Branches In addition, the Subject operates from 14 boutique showrooms/stores located in Australia. Shop 3015/3017 Westfield Bondi Junction 500 Oxford Street Bondi Junction NSW 2022 Australia Tel: +61 2 93898822 Shop ML 205 Centro Bankstown Bankstown NSW 2200 Australia Tel: +61 2 97938855 Shop 349 Castle Towers Shopping Centre Castle Hill NSW 2154 Australia Tel: +61 2 88507080 Shop 2069 Westfield Liverpool Macquarie Street Liverpool NSW 2170 Australia Tel: +61 2 98213311 Shop 3046, Level 3 Westpoint Shopping Centre Blacktown NSW 2148 Australia Tel: +61 2 96224828 Shop 454 Westfield Chatswood Anderson Street Chatswood NSW 2067 Australia Tel: +61 2 98848900 Shop 3 67 Castlereagh St Sydney NSW 2000 Australia Tel: +61 2 92333510 Shop 4018 Westfield Parramatta 159-175 Church Street Parramatta NSW 2150 Australia Tel: +61 2 96335500 Shop 254 Westfield Burwood 90 Burwood Road Burwood NSW 2134 Australia Tel: +61 2 97153866 Shop 2083 Westfield Hornsby 236 Pacific Highway Hornsby NSW 2077 Australia Tel: +61 2 94765500 Shop 264 Westfield Penrith Henry Street Penrith NSW 2750 Australia Tel: +61 2 47228722 Shop U59, Level 3 Macarthur Square Gilchrist Drive Ambarvale NSW 2560 Australia Tel: +61 2 4628 4141 Shop 376, level 2 Westfield Hurstville Hurstville NSW 2220 Australia Tel: +61 2 95707050 Castlereagh Street Sydney, NSW 2000 Australia Tel: +61 2 92333510

SUMMARIZED COUNTRY RISK

Gross Domestic Products (GDP) and Economic Overview

Central bank Reserve Bank of Australia Reserve of foreign exchange and gold US$ 46.714 billion Gross domestic product (GDP) US$ 1.586 trillion Purchasing power parity (GPP) 954.296 billion of International dollars GDP per capita (current prices) US$ 68,916 GDP composition by sector agriculture: 4% industry: 25.6% services: 70.4% Inflation 2010: 2.8% 2011: 3.4% 2012: 2.7% Unemployment rate 2010: 5.2% 2011: 5.1% 2012: 5.2%

Public debt (general Government gross debt as percentage (%) of GDP) 2010: 20.4% 2011: 22.9% 2012: 24% Government bond ratings Standard & Poor's: AAA Moody's rating: Aaa Moody's outlook: STA Market value of publicly traded shares US$1.198 trillion

Trade and Competitiveness Overview

Total exports US$263.9 billion Export commodities Coal, iron ore, gold, meat, wool, alumina, wheat, machinery and transport equipment Total imports US$239.7 billion Import commodities Machinery and transport equipment, computers and office machines, telecommunication equipment and parts; crude oil and petroleum products Best countries for doing business 10 out of 185 countries Global competitiveness ranking 20 (ranking by country on a basis of 144, the first is the best)

Major export partners China 27.4%, Japan 19.2%, South Korea 8.9%, India 5.8% Major import partners China 18.5%, US 11.4%, Japan 7.9%, Singapore 6.3%, Germany 4.7% FDI inflows 2009: US$26,554 million 2010: US$35,556 million 2011: US$41,317 million FDI outflows 2009: US$16,693 million 2010: US$12,791 million 2011: US$19,999 million

Country and Population Overview

Total population 22.68 million Total area 7,692,024 km2 Capital Canberra

Currency Australian dollars (AUD) Internet users as percentage (%) of total population 79%

PAYMENT OUTLOOK

Purchases Term

International L/C, Telegraphic transfer, D/P, Credit 30-90 days

Sales Term

Local Cash, Credit card, Credit 30-90 days

Trade Reference / Payment Behaviour

Comments As local and international trade references were not supplied, the Subject's payment track record history cannot be appropriately determined but based on our research, payments are believed to be met without delay.

Investigation Note

Sources Interviews and material provided by the Subject Other official and local business sources

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.61.30
UK Pound	1	Rs.99.16
Euro	1	Rs.78.59

INFORMATION DETAILS

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