MIRA INFORM REPORT

Report No. :	346980
Report Date :	31.10.2015

IDENTIFICATION DETAILS

Name :	CLASSIC GROUP LIMITED
Formerly Known As :	GOLDKRAFT LIMITED
Registered Office :	293, Republic Street, VLT 1110, Valletta
Country :	Malta
Financials (as on) :	31.03.2014
Date of Incorporation :	07.05.1992
Com. Reg. No.:	C 13841
Legal Form :	Limited Liability company
Line of Business :	Manufacture of Jewellery and Related Articles.
No. of Employees :	80 - 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 – March 31, 2015

Country Name	Previous Rating (31.12.2014)	Current Rating (31.03.2015)
Malta	B2	B2

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

MALTA - ECONOMIC OVERVIEW

Malta - the smallest economy in the euro zone - produces only about 20% of its food needs, has limited fresh water supplies, and has few domestic energy sources. Malta's geographic position between Europe and North Africa makes it a target for irregular migration, which has strained Malta's political and economic resources. Malta's fertility rate is below the EU average, and population growth in recent years has largely been from immigration, putting increasing pressure on the pension system. Malta adopted the euro on 1 January 2008. Malta's economy is dependent on foreign trade, manufacturing, and tourism. Malta has weathered the Eurozone crisis better than most EU member states due to a low debt-to-GDP ratio and financially sound banking sector. It has low unemployment relative to other European countries, and growth has recovered since the 2009 recession. In 2014, Malta led the Eurozone in growth, expanding by nearly 3.5%. Also in 2014, the government began promoting public-private partnerships in the healthcare sector to establish Malta as a Mediterranean health hub for medical tourism, reduced residential and commercial energy tariffs by 25%, and implemented a citizenship purchase program to increase government revenue and attract foreign investors. The government has implemented new programs, including free child care, to encourage increased labor participation. The high cost of borrowing and small labor market present potential constraints to future economic growth.

Source : CIA

REGISTERED NAME & COMPANY SUMMARY

Report Subject:
Name:	CLASSIC GROUP LIMITED	Reg.no:	C 13841
Street:	293, REPUBLIC STREET,	Phone:	21220200
Postal Code	VLT 1110	Fax	21248207
City:	Valletta - MALTA	VAT:	MT12614918
P.O.box:		Founded:	07/05/1992
English name:	CLASSIC GROUP LIMITED	Reg. date	07/05/1992
Formerly known as:	Goldkraft Limited	Homepage:	www.classicgroup.com.mt
Last update	29.10.2015	E-mail	info@classicgroup.com.mt

DIRECTORS/MANAGEMENT

Parent Company Directors:

 FENECH PAUL ID#: 922547M

 FENECH STEVE ID#: 215678M

 FENECH LISA ID#: 577383M

 MICALLEF CHRISTINE ID#: 464276M

 MICALLEF KARL ID#: 544675M

Subject Company - Director Local Involvements:

Other involvements of Paul Fenech 922547M - Born 1947

 BM RESOURCES LIMITED Director & Shareholder

 CLASSIC JEWELLERS LIMITED Director & Secretary

 DIAMONDS INTERNATIONAL MALTA LIMITED Director & Secretary

 GO P.L.C. Director

 JEWEL DESIGN & MANUFACTURING LTD. Director & Secretary

 Optical (CCSG) Limited Director

 PF & F HOLDING LIMITED Director & Shareholder

 RETAIL SOLUTIONS LIMITED Director

 TIME 2000 LIMITED Director & Secretary

Other involvements of Fenech Steve 215678M - Born 1978

 PF & F HOLDING LIMITED Director

 RETAIL SOLUTIONS LIMITED Director

 BM RESOURCES LIMITED Secretary

Other involvements of Fenech Lisa 577383M - Born 1983

 PF & F HOLDING LIMITED Director & Secretary

 RETAIL SOLUTIONS LIMITED Secretary

Other involvements of Micallef Karl Frederick 544675M - Born 1975

 PF & F HOLDING LIMITED Director

 RETAIL SOLUTIONS LIMITED Director

Other involvements of Micallef Christine 464276M - Born 1976

 PF & F HOLDING LIMITED Director

Board of directors:
Names:	ID-/Reg.no:	Position:
Fenech Steve	215678M – born 1978	DIRECTOR
Micallef Christine	464276M – born 1976	DIRECTOR
Micallef Karl Frederick	544675M – born 1975	DIRECTOR
Fenech Lisa	577383M – born 1983	DIRECTOR
Fenech Paul	922547M – born 1947	DIRECTOR

Company secretary	ID-/Reg.no:
Fenech Paul	922547M

Key employees:
Names:	ID-/Reg.no:	Position:
Fenech Steve	215678M	Financial Manager
Micallef Karl Frederick	544675M	Marketing Manager
Fenech Lisa	577383M	Operation Manager
Fenech Paul	922547M	Managing Director

NEGATIVE INFORMATION

Court information and defaulting debts in Euro – last five years
Claim owner	PINCOTT SECURITY LIMITED		CI reference	150960
Amount	9 279 .37	Date 20/11/2012	Reg.Nr.	3119/12I

SHARE & SHARE CAPITAL INFORMATION

Parent Company Shareholders:

 FENECH PAUL ID#: 922547M

Parent Company - Local Involvements:

 CLASSIC GROUP LIMITED Shareholder

 CLASSIC JEWELLERS LIMITED Shareholder

 DIAMONDS INTERNATIONAL MALTA LIMITED Shareholder

 JEWEL DESIGN & MANUFACTURING LTD. Shareholder

 TIME 2000 LIMITED Shareholder

Capital
Authorized: 400,000.00 Issued: 400,000.00 Paid up: 400,000.00 EUR
Nominal value: 1.00	Share description: Ordinary Shares

Shareholders
Names:	Reg.no:	Ownership (%):	Share class
PF & F HOLDING LIMITED 293,Republic Street, Valletta, MALTA	C 61758	100..00%	Ordinary Shares

PAYMENT INFORMATION

Customer type:

General Public

Export to:

Does not normally engage in Exports

Selling terms:

Cash

Special Agreements

Credit Cards

Import from:

Europe

Payment terms:

Special Agreements

Bank Transfer

GROUP STRUCTURE & AFFILIATED COMPANIES

N/A

FINANCIAL INFORMATION

Company review:

Financial statements presented of 2010, 2011 & 2012 are group consolidated accounts. Those of 2014, which represent a 15 months period due to change in financial year-end, are company accounts since with the share transfer dated 15.10.2013, the group controlling company became PF & F HOLDING LIMITED.

The company is a wholly owned subsidiary of PF & F Holding Limited, the Group's parent company, whose responsibility is to prepare consolidated financial statements (if no exemptions exist) of the Group.

Subject has invested in upgraded its shops in Republic Street, Valletta during 2010/2011.

The financials for year ending 2012 should not be considered as comparative accounts since these are consolidated. For comparative figures please see the attached company financials for year ending 2013

The management are well versed in their line of activity. It is held to be reliable and trustworthy meeting its commitments regularly.

FINANCIAL STRENGTH INDICATOR : (representing a company net worth between Eur5-10,000,000)

FOREIGN EXCHANGE RATES

N/A

ADDITIONAL INFORMATION

Company legal form

Limited Liability Co. - Private Exempt

Company Representation

The legal and judicial representation of the company is vested in any director of the company.

Company history:

Paul Fenech, the founder and Chairman of Classic Group, originally went into partnership with his brother Alfred, trading under the style A & P Jewellers which in 1984 took over an already established businesses styled Sterling Jewellers, owned by the Azzopardi family, with origins dating back to 1896 trading under the style of D Azzopardi & Brother. After the take over the business continued to grow and by 1992 was operating from eight different retail outlets.

In 1992 Paul Fenech decided to leave Sterling Jewellers to set up on his own under the style CLASSIC JEWELERS, later CLASSIC GROUP. His brother Alfred, kept on trading under the style STERLING JEWELLERS, similarly expanding his business, which included a brief expansion in London.

The Classic Group was founded in 1992 and was later expanded by the setting up of Diamonds International. At present, the group is active in all sectors of the jewellery industry with over 100 employees and fifteen retail outlets with the latest acquisition being a whole block, known as the Luxe Pavillion, sited in a prime commercial and residential, Portomaso. The Group has outlets in the principal commercial centres with the flag-ship showrooms and outlet located in Republic Street, Valletta.

The company secretaries are Paul Fenech and Lisa Fenech.

Latest Annual Return filed by the company is made up to 7th May 2015.

Company Filed Changes:

 15.10.13: Paul Fenech transferred his 400,000 ordinary shares to PF & F Holding Limited.

 27.06.13: The company changed its accounting reference period from: (starting 1st January 2013 and ending 31st December 2013) to: (staring 1st January 2013 and ending 31st March 2014).

 26.11.12: Steve Fenech and Christine Micallef both transferred 20 ordinary shares each to Paul Fenech.

 31.10.08: The company re-denominated the nominal value of each share from Eur2.329373 to Eur1.

The company increased its authorised and issued share capital from Eur232,960 to Eur400,000, paid through capitalisation of shareholders' loans.

 24.10.08: Joseph Dingli transferred 1 ordinary share to Paul Fenech.

 09.12.02: The company changed its name from: Goldkraft Limited to: Classic Group Limited.

Parent Company Details:

 Reg. No: C 61758

 Reg. Date: 03/09/2013

 Name: PF & F HOLDING LIMITED

 Street: 293, REPUBLIC STREET,

 Locality: Valletta

 Country: Malta

Company operation

The group is engaged in the manufacture, wholesale and retail of gold and silver jewellery and ancillary services.

Subject sells gold, jewellery and ancillary products locally and abroad. It also provides consultancy work.

Importers, wholesalers, retailers of jewellery items, silver and gold products, precious stones, and similar; the group presents several important brands in this line of activity such as: MIKIMOTO PEARLS, FOPE, BARAKA, PIAGHEI, CAPRICE, ALFIERI & ST JOHN, DAMIANI, MOUNT BLANC and several others.

The group also designs and manufactures its own jewellery, silver and gold products.

Employees

80 - 100

NACE code:

362: Manufacture of jewellery and related articles

Company status

Active

Auditors
Names:	ID-/Reg.no:	Street:
KSI Malta	AB/26/84/43	Villa Gauci, Mdina Road, Balzan

Investments and company relations:
Company name:	Reg.no:	Ownership(%)	Form of operation:	Status
LIMITEDRETAIL SOLUTIONS	C 31508	100	Management activities of holding companies	Active
Optical (CCSG) Limited	C 44416	33.33		Active

Real Estates:
Street:	Diamonds International, 293 Republic Street	City:	Valletta
Insurance value:	0	Year built:
Location:	Central business area	Size:
Tenure:	Owned	Real Estate type:	Shop
Street:	Luxe Pavilion, Portomaso, St. Julians	City:	San Giljan
Insurance value:	0	Year built:
Location:	Central business area	Size:
Tenure:	Rented	Real Estate type:	Shop
Street:	The Strand, Sliema	City:	Sliema
Insurance value:	0	Year built:
Location:	Central business area	Size:
Tenure:	Rented	Real Estate type:	Shop
Street:	293, Republic Street, Valletta	City:	Valletta
Insurance value:	0	Year built:
Location:	Central business area	Size:
Tenure:	Rented	Real Estate type:	Registered Address

Trade banks:

Bank: Bank of Valletta p.l.c., Republic Str, Valletta

Bank: HSBC Bank Malta p.l.c., 32/34, Merchants Str., Valletta

Bank: APS Bank Limited , "APS House" 24 St Anne Street - Head Office, Florina,

Charges

No information available

NOTES & COMMENTS

N/A

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.65.22
UK Pound	1	Rs.99.93
Euro	1	Rs.71.67

INFORMATION DETAILS

Analysis Done by :	HEE
Report Prepared by :	NIT

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.