MIRA INFORM REPORT

Report Date :

26^th February, 2007

IDENTIFICATION DETAILS

Name :	CATERPILLAR PAVING PRODUCTS (XUZHOU) Ltd.
Registered Office :	South Part, Jinshanqiao Economic & Technology Development Zone, Xuzhou, Jiangsu Province, 221004 Pr China.
Country :	China
Financials (as on):	31.12.2004
Date of Incorporation :	06.03.2000
Com. Reg. No.:	800985
Legal Form :	Wholly Foreign-Owned Enterprise
Line of Business :	Engaged in manufacturing and selling pavement construction machinery.

RATING & COMMENTS

MIRA’s Rating :

B

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	Small

Status :	Small Company
Payment Behaviour :	Usually Correct
Litigation :	Clear

Company Name & Address

CATERPILLAR PAVING PRODUCTS (XUZHOU) Ltd.

SOUTH PART, JINSHANQIAO ECONOMIC & TECHNOLOGY DEVELOPMENT ZONE, XUZHOU, JIANGSU PROVINCE, 221004 PR CHINA.

TEL : 86 (0) 519-87792888

FAX : 86 (0) 87736688

EXECUTIVE SUMMARY

INCORPORATION DATE : MARCH 6, 2000

REGISTRATION NO. : 800985

REGISTERED LEGAL FORM : WHOLLY FOREIGN-OWNED enterprise

CHIEF EXECUTIVE : MR. BAI BOEN (CHAIRMAN)

STAFF STRENGTH : 10

REGISTERED CAPITAL : usd 8,106,000

BUSINESS LINE : MANUFACTURING

TURNOVER : CNY 533,000 (AS OF DEC. 31, 2004)

EQUITIES : CNY 10,625,000 (AS OF DEC. 31, 2004)

PAYMENT : AVERAGE

RECOMM. CREDIT RANGE : SMALL AMOUNT

MARKET CONDITION : COMPETITIVE

FINANCIAL CONDITION : FAIR

OPERATIONAL TREND : FAIRLY STEADY

GENERAL REPUTATION : AVERAGE

EXCHANGE RATE : CNY 7.75=US$1 AS OF 2007-02-15

Adopted abbreviations:

ANS - amount not stated

NS - not stated

SC - subject company (the company inquired by you)

NA - not available

CNY - China Yuan Renminbi

Note: SC’s correct name should be the above stated one, instead of the given name – Caterpillar Paving Products Ltd.

SC was registered as a wholly foreign-owned enterprise at local Administration for Industry & Commerce (The official body of issuing and renewing business license) on March 6, 2000.

Company Status: Wholly foreign-owned enterprise

This form of business in PR China is defined as a legal person. It is a limited co. established within the territories of PR China with capital provided totally by the foreign investors. More than one foreign investors may jointly invest in a wholly foreign-owned enterprise. The investing party/parties solely exercise management, reap profit and bear risks and liabilities by themselves. This form of companies usually have a limited duration is extendible upon approval of Examination and Approval Authorities.

SC’s registered business scopes include manufacturing pavement road roller, power driven grader, cold milling machine, spreading machine, other construction machinery products for pavement and road, related parts, selling self-made products, and providing after-sale services and related consulting services.

SC is mainly engaged in manufacturing and selling pavement construction machinery.

Mr. Bai Boen has been legal representative and chairman of SC since 2005.

SC owns approximately 10 staff at present.

SC is currently operating at the above stated address, and this address houses its operating office and factory in the industrial zone of Xuzhou. Our checks reveal that SC rents the total premise about 1,000 square meters.

http://china.cat.com/cda/layout?m=60188&x=7 This is the website of its parent company. The design is professional and the content is well organized. At present the web site is both in Chinese and English versions.

Changes of its registered information:

Date of change	Item	Before the change	After the change
2002-5-10	Chairman	Harold R. Kahler (理查德·凯勒)	Mark O. McDaniel (杰克·聂高)
2004-7-5	Registered capital	USD 2,106,000	USD 4,106,000
	Total Investment	USD 4,016,000	USD 8,016,000
2005-7-29	Chairman	Mark O. McDaniel (杰克·聂高)	Bai Boen (白博恩)
Unspecified	Registered capital	USD 4,106,000	USD 8,106,000
	Total Investment	USD 8,016,000	USD 20,016,000

MAIN SHAREHOLDERS:

Name % of Shareholding

Caterpillar (China) Investment Co., Ltd.(America) 100

=============================

Caterpillar is the world’s largest manufacturer of earthmoving and construction equipment and a major global producer of diesel and natural gas engines and turbines.

Caterpillar has invested in seven manufacturing facilities in China. They produce hydraulic excavators, compactors, diesel engines, undercarriage, iron castings, and machinery components.

l Legal representative and General manager:

Mr. Bai Boen , in his 50’s with university education. He is currently responsible for the overall management of SC.

Working Experience(s):

From 2005 to present Working in SC as chairman and general manager.

SC is mainly engaged in manufacturing and selling pavement construction machinery.

SC’s products mainly include land scraper and digging machine.

SC is no longer producing 10-18 Metric Ton Vibratory Compactors. In 2006 Paving Products will be restarting operations at SC this time with a focus on Asphalt Paving Equipment. The three product segments Paving will focus on at SC are Asphalt Compactors (ACOM), Cold Planers (CPLN) and Large Asphalt Pavers (LAP). Motor Graders have been in production at SC with the 140H since 2005. The Motor Graders have plans to produce three models at SC: 140H, 160H, and 12H.

SC sources its materials 70% from domestic market, and 30% from Brazil and Europe. SC sells 90% of its products in domestic market, and 10% to Southeast Asian countries.

The buying terms of SC include Check, T/T, L/C and Credit of 30-60 days. The payment terms of SC include Check, T/T, L/C and Credit of 30-60 days.

SC is not known to have any subsidiary at present.

Overall payment appraisal :

( ) Excellent ( ) Good (X) Average ( ) Fair ( ) Poor ( ) Not yet determined

The appraisal serves as a reference to reveal SC's payments habits and ability to pay. It is based on the 3 weighed factors: Trade payment experience (through current enquiry with SC's suppliers), our delinquent payment and our debt collection record concerning SC.

Trade payment experience : SC did not provide any name of trade/service suppliers and we have no other sources to conduct the enquiry at present.

Delinquent payment record : None in our database.

Debt collection record : No overdue amount owed by SC was placed to us for collection within the last 6 years.

China Construction Bank Xuzhou Branch Office.

AC#：32001718636051412195

Relationship: Normal.

Balance Sheet

Unit: CNY’000

	as of Dec. 31, 2003	as of Dec. 31, 2004
Cash & bank	3,333	3,453
Inventory	6,480	7,700
Accounts receivable	0	0
Advances to supplies	0	90
Other receivables	2,613	85
Other current assets	0	0
	------------------	------------------
Current assets	12,426	11,328
Fixed assets	733	1,058
Fixed assets net value	625	776
Projects under construction	0	0
Long-term investments	0	0
Intangible and other assets	0	0
	------------------	------------------
Total assets	12,951	12,104
	=============	=============
Short loans	0	0
Accounts payable	11	298
Accrued payroll	74	178
Other Accounts payable	781	600
Taxes payable	-603	-540
Accrued expenses	708	943
Other current liabilities	0	0
	-----------------	-----------------
Current liabilities	971	1,479
Long term liabilities	0	0
	------------------	------------------
Total liabilities	971	1,479
Shareholders equities	11,980	10,625
	------------------	------------------
Total liabilities & equities	12,951	12,104
	=============	=============

Income Statement

Unit: CNY’000

	as of Dec. 31, 2003	as of Dec. 31, 2004
Turnover	25,323	533
Cost of goods sold	21,461	456
Sales expense	298	20
Management expense	2,225	3,927
Finance expense	670	25
Operation Profit	673	-3,830
Less: profit tax	0	0
Net profit	673	-3,830

Important Ratios

	as of Dec. 31, 2003	as of Dec. 31, 2004
*Current ratio	12.8	7.66
*Quick ratio	6.12	2.45
*Liabilities to assets	0.07	0.12
*Net profit margin (%)	2.66	-718.6
*Return on total assets (%)	5.2	-31.6
*Fixed assets/Total assets	0.05	0.06
*Inventory /Turnover ×365	93days	5273days
*Accounts receivable/Turnover ×365	/	/
*Turnover/Total assets	1.96	0.04
* Cost of goods sold/Turnover	0.85	0.86

PROFITABILITY: POOR

l The turnover of SC appears poor in its line.

l SC’s net profit margin is poor.

l SC’s return on total assets is poor.

l SC’s cost of goods sold is acceptable, comparing with its turnover.

LIQUIDITY: AVERAGE

l The current ratio of SC is maintained in a normal level.

l SC’s quick ratio is maintained in a normal level.

l The inventory of SC appears LARGE.

l SC has no accounts receivable in 2004.

l SC has no short-term loan in 2004.

l SC’s turnover is in a fair level, comparing with the size of its total assets.

LEVERAGE: FAIRLY GOOD

l The debt ratio of SC is fairly low.

l The risk for SC to go bankrupt is average.

Overall financial condition of the SC: Fair.

SC is considered small-sized in its line with fair financial conditions. Credit dealings with SC should be confined into small amount at present.

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	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	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
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

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%)

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions