MIRA INFORM REPORT

Report Date :

14.03.2008

IDENTIFICATION DETAILS

Name :	southern aluminium industry (china) co., ltd.
Formerly Known as :	FUJIAN RONGFENG ALUMINIUM INDUSTRY CO., LTD.
Registered Office :	Rongqiao Economic Development Zone, Honglu Town, Fuqing City Fujian Province 350301 Pr
Country :	China
Financials (as on) :	31.12.2006
Date of Incorporation :	06.04.1992
Com. Reg. No.:	000398
Legal Form :	Wholly Foreign-Owned Enterprise
Line of Business :	Manufacturing and Selling Various Aluminum Foil.

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 2,000,000
Status :	Good
Payment Behaviour :	No Complaints
Litigation :	Clear

name & address

southern aluminium industry (china) co., ltd.

rongqiao economic development zone, honglu town, fuqing city

fujian province 350301 PR CHINA

TEL: 86 (0) 591-85362026 FAX: 86 (0) 591-85387532

EXECUTIVE SUMMARY

INCORPORATION DATE : apr. 6, 1992

REGISTRATION NO. : 000398

REGISTERED LEGAL FORM : wholly foreign-owned enterprise

CHIEF EXECUTIVE : Mr. LIN WENGUANG (CHAIRMAN)

STAFF STRENGTH : 605

REGISTERED CAPITAL : USD 41,138,000

BUSINESS LINE : MANUFACTURING

TURNOVER : CNY 706,605,000 (AS OF DEC. 31, 2006)

EQUITIES : CNY 345,363,000 (AS OF DEC. 31, 2006)

PAYMENT : AVERAGE

RECOMM. CREDIT RANGE : UP TO USD 2,000,000 (periodical review)

MARKET CONDITION : COMPETITIVE

FINANCIAL CONDITION : fairly GOOD

OPERATIONAL TREND : steady

GENERAL REPUTATION : well known

EXCHANGE RATE : CNY 7.11 = USd 1

Adopted abbreviations:

ANS - amount not stated

NS - not stated

SC - subject company (the company inquired by you)

NA - not available

CNY - China Yuan Ren Min Bi

SC was registered as a wholly foreign-owned enterprise at local Administration for Industry & Commerce (AIC-The official body of issuing and renewing business license) on Apr. 6, 1992.

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 investor 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 scope includes manufacturing composite aluminum foil used by radiators, other composite aluminum foil, middle & high voltage cathode capacitance aluminum foil, PS aluminum alloy plate, aluminum alloy covered plate, other nonferrous composite materials, and new-type alloy materials.

SC is mainly engaged in manufacturing and selling various aluminum foil.

Mr. Lin Wenguang has been chairman of SC since 2004.

SC is known to have approx. 605 employees 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 Fuqing. Our checks reveal that SC owns the total premise about 240,000 square meters.

http://www.fqsaic.cn The design is professional and the content is well organized. At present the web is both in Chinese and English versions.

E-mail: bujung@fqsaic.cn

Until December 31, 2006, SC’s paid-up capital was CNY 325,600,664.

SC’s quality management system has acquired ISO9001-2000 certification and High-Tech Enterprise Qualification issued by Fujian Provincial Departmental of Science and Technology in 2002.

Changes of its registered information:

Date of change	Item	Before the change	After the change
1993-11-18	Registered capital	USD 5,000,000	USD 30,000,000
	Company name	Fujian Rongfeng Aluminium Industry Co., Ltd.	Southern Aliminium Industry (China) Co., Ltd.
2004-08-20	Legal representative	Lin Xueshan	Lin Wenguang
	Registered capital	USD 30,000,000	USD 41,138,000

MAIN SHAREHOLDERS:

Name % of Shareholding

Hong Kong Fenglin Trading Co., Ltd. 70.00

SHINYU SHOJI CO., LTD. (Japan) 21.88

Hong Kong Huanji Development Co., Ltd. 4.470

Hong Kong Xinggao Co., Ltd. 3.650

l Chairman:

Mr. Lin Wenguang , Indonesian, passport no.: M577744, 57 years old with university education. He is currently responsible for the overall management of SC.

Working Experience(s):

From 2004 to present Working in SC as chairman.

l Vice-Chairman:

Mr. Liu Yourong , Japanese, passport no.:146302865, in his 50’s with university education. He is currently responsible for the overall management of SC.

Working Experience(s):

From 2004 to present Working in SC as vice-chairman.

l General Manager:

Mr. Lin Wenying , Indonesian, passport no.: N088612, in his 50’s with university education. He is currently responsible for the daily management of SC.

Working Experience(s):

From 2004 to present Working in SC as general manager

SC’s board members:

Liu Shengyong 刘圣勇 (Japanese)

Lin Wenhong 林文宏 (Indonesian)

Lin Wenjun 林文浚 (Indonesian)

Lin Wenming 林文明 (Japanese)

SC is mainly engaged in manufacturing and selling various aluminum foil.

SC’s products mainly include: Aluminum Foil, Aluminum Coil, Aluminum Circle, Aluminum Sheet, etc.

SC’s products are used in a number of applications such as kitchenware, household appliances, roofing and siding of buildings, road signs, truck body in the case of aluminum sheet and packaging material for foods / beverages, medicine, cigarettes and fin stock in the case of foil.

SC sources its materials 80% from domestic market, mainly Guangdong, and 20% from overseas market, mainly Southeast Asia; SC sells its products 45% to overseas market, mainly Southeast Asia, Europe and America, and 55% in domestic market, mainly Guangdong and Shanghai.

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

*Major Supplier:

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

Maspion Group Limited
 
 

SC is known to have 2 offices at present, as follows:
 
Southern Aluminium Industry (China) Co., Ltd. Guangzhou Office
Southern Aluminium Industry (China) Co., Ltd. Shanghai Office
 
 
 
 
 

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’s suppliers declined to make any comments.

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.

Industrial and Commercial Bank of China Fuqing Sub-branch

AC#1402040109016200889

Relationship: Normal.

Balance Sheet

Unit: CNY’000

	As of Dec. 31, 2005	As of Dec. 31, 2006
Cash & bank	25,984	28,909
Inventory	90,982	124,613
Accounts receivable	27,349	44,098
Other Accounts receivable	5,226	2,064
Advances to suppliers	17,765	28,105
To be apportioned expense	1,494	1,740
Other current assets	0	496
	------------------	------------------
Current assets	168,800	230,025
Fixed assets net value	182,779	303,018
Projects under construction	310,365	248,690
Long term investment	0	0
Other assets	18,395	18,047
	------------------	------------------
Total assets	680,339	799,780
	=============	=============
Short loans	51,678	128,047
Bills payable	45,751	69,902
Accounts payable	8,347	15,930
Advances from clients	3,486	3,473
Salaries payable	1,519	1,735
Welfares payable	0	0
Taxes payable	-5,153	-29,416
Other Accounts payable	5,664	13,889
Withdraw the expenses in advance	0	0
Other current liabilities	12,388	2,850
	------------------	------------------
Current liabilities	123,680	206,410
Long term liabilities	238,594	248,007
Other liabilities	0	0
	------------------	------------------
Total liabilities	362,274	454,417
Equities	318,065	345,363
	------------------	------------------
Total liabilities & equities	680,339	799,780
	=============	=============

Income Statement

Unit: CNY’000

	As of Dec. 31, 2005	As of Dec. 31, 2006
Turnover	428,528	706,605
Cost of goods sold	400,457	658,451
Sales expense	5,185	6,619
Management expense	10,984	12,757
Finance expense	4,998	14,551
Profit before tax	17,378	20,032
Less: profit tax	0	0
Profits	17,378	20,032

Important Ratios

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

	As of Dec. 31, 2005	As of Dec. 31, 2006
*Current ratio	1.36	1.11
*Quick ratio	0.63	0.51
*Liabilities to assets	0.53	0.57
*Net profit margin (%)	4.06	2.83
*Return on total assets (%)	2.55	2.50
*Inventory /Turnover ×365	77days	64days
*Accounts receivable/Turnover ×365	23days	23days
*Turnover/Total assets	0.63	0.88
* Cost of goods sold/Turnover	0.93	0.93

PROFITABILITY: FAIRLY GOOD

l The turnover of SC appears fairly good, and it was rising in 2006.

l SC’s net profit margin is fairly good in 2005 and average in 2006.

l SC’s return on total assets is average.

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

LIQUIDITY: FAIR

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

l SC’s quick ratio is maintained in a fair level in both years.

l The inventory of SC appears fairly large.

l The accounts receivable of SC is maintained in a normal level.

l The short-term loan of SC is maintained in an average level in 2005 but LARGE in 2006.

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

LEVERAGE: AVERAGE

l The debt ratio of SC is average.

l The risk for SC to go bankrupt is low.

Overall financial condition of the SC: Fairly good.

SC is considered medium-sized in its line with fairly good financial conditions. The large amount of short-term loan & inventory could be a threat to SC’s financial condition. A credit line up to USD 2,000,000 appears to be within SC’s capacities upon a periodical review basis.

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.	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