MIRA INFORM REPORT

Report Date :

19.03.2008

IDENTIFICATION DETAILS

Name :	SAE MAGNETICS (HONG KONG) LTD

Registered Office :	Hong Kong Science Park - Sae Technology Centre, 6 Science Park East Ave Shatin New Territories

Country :	Hong Kong

Date of Incorporation :	21.10.1980

Com. Reg. No.:	0088146

Legal Form :	Private Limited Company

Line of Business :	Specializes in Trading wide range of Magnetic Recording Computer Heads, Manufactured by its China Factory

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	USD 100,000

Status :	Satisfactory

Payment Behaviour :	No Complaints

Litigation :	Exists

name & address

SAE MAGNETICS (HONG KONG) LTD

HONG KONG SCIENCE PARK - SAE TECHNOLOGY CENTRE

6 SCIENCE PARK EAST AVE SHATIN NEW TERRITORIES, HONG KONG.

TEL: 852-26128888 FAX: 852-24804757

EXECUTIVE SUMMARY

INCORPORATION DATE : OCTOBER 21, 1980

REGISTRATION NO. : 0088146

LEGAL FORM : PRIVATE

CHIEF EXECUTIVE : MR. SEIJI ENAMI (CHAIRMAN)

STAFF STRENGTH : 30

CAPITAL : US$ 12,837

BUSINESS LINE : TRADER

TURNOVER : N/A (AS OF DEC. 31, 2006)

EQUITIES : N/A (AS OF DEC. 31, 2006)

PAYMENT : AVERAGE

RECOMM. CREDIT RANGE : UP TO USD 100,000

MARKET CONDITION : AVERAGE

FINANCIAL CONDITION : N/A

OPERATIONAL TREND : STEADY

GENERAL REPUTATION : AVERAGE

EXCHANGE RATE : HKD 7.76517 = US$ 1

Adopted abbreviations:

ANS - amount not stated

NS - not stated

SC - subject company (the company inquired by you)

NA - not available

M - million

HKD –Hong Kong Dollars

*Company History*

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

August 1986 - Joined the TDK CORP Group.

1989 - Began to migrate manufacturing activities to Dongguan City, China.

1995 - First to introduced Magneto-Resistive (MR) technology to the OEM market of magnetic recording heads.

1996 - Opened a new 11,000 square meters manufacturing complex in Nancheng to accommodate the increasing demand following the success of MR.

1998 - Introduced Giant Magneto-Resistive (GMR) technology to answer for the quest of storage capacities.

- Established a new operation in Changan of Dongguan.

2000 - Diversified business in contract manufacturing of optical communications components.

2003 - Introduced wafer fabrication in the Changan operation of Dongguan.

2004 - Introduced Tunneling Magneto-Resistive (TMR) technology to the OEM market.

2005 - Introduced Perpendicular Magnetic Recording (PMR), a technology to sustain the unending thirst of storage capacity of hard disk drives.

*Company Registration*

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

(1)

License number : 0088146

Date issued : 21 October, 1980

Issuing authority : Companies Registry

Type of license : Company registration

(2)

License number : 06886002-000

Issuing authority : Business Registration Office - Inland Revenue Dept

(3)

License number : 06886002-002

Issuing authority : Business Registration Office - Inland Revenue Dept

*Capital Details*

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

Share value : HKD 1.00/-each

Authorized capital : HKD 100,000.00

Paid-up capital : HKD 50,000.00

*Office & Facilities*

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

Other Contact Details

----------------------------

Tel no. : 24240025

Email : whng@notes.sae.com.hk, enquiry@sae.com.hk

Website : www.notes.sae.com.hk

Previous Contact Details

---------------------------------

Address : 16Fl SAE Tower 38-42 Kwai Fung Crescent, Kwai Chung, New Territories

Year of relocation : 2005

*Corporate & Organization Structure*

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

A large sized company mainly operated and managed by an experienced team of professionals.

*Approved Signatures*

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

Mr. Hong Tian can sign on behalf of the company with seal affixed.

http://hr.sae.com.hk/ The design is professional and the content is well organized. At present the web site is both in Chinese and English versions.

E-mail: hr@sae.com.hk

Litigation ( 1 )

Position : Defendant

Other Parties Involved : Position Country Party's Name

Plaintiff Hong Kong Kam-tong Wong

Case Issue : A petition to the Court to rule over a labour dispute (filed under case no. LBTC3939/2004).

Court : District Court, Hong Kong

Date Commenced : 8 July, 2004

Status : Pending

Litigation ( 2 )

Position : Defendant

Other Parties Involved : Position Country Party's Name

Plaintiff Hong Kong So-yung Kwok

Case Issue : A petition to the Court claiming for damages (filed under case no. A1578/93).

Court : High Court, Hong Kong

Date Commenced : 24 February, 1993

Status : Not stated

Litigation ( 3 )

Position : Defendant

Other Parties Involved : Position Country Party's Name

Plaintiff Hong Kong Mei-ling Chan

Case Issue : A petition to the Court claiming for damages (filed under case no. A2401/93).

Court : High Court, Hong Kong

Date Commenced : 22 March, 1993

Status : Not stated

*Major Shareholders*

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

Total number of shareholders: 1

Total number of shares: 50,000

Shareholders Country %

TDK HONG KONG CO LTD Hong Kong 100.00

Management: Mr. Raymond Siu-hong Leung, Executive Vice President

Mr. Frankie Lo, Vice President

Name Nationality Job Description

Mr. Raymond Siu-hong Leung Hong Kong Executive Vice President

Mr. Frankie Lo Hong Kong Vice President

*Main Products & Services*

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

Specializes in trading wide range of magnetic recording computer heads, manufactured by its China factory.

Products also include:

- Magnetic recording heads

- Head Gimbal Assemblies (HGA)

- Head Stack Assemblies (HSA)

Products: Computer magnetic heads

Computer peripherals

Disk drives

EDP equipment

Magnetic recording head

*Brand*

======

SAE

*Payment Terms*

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

Sales

-------

Local : Cash

30-60 days credit

Export : Letter of Credit (L/C)

Purchases

--------------

Local : Cash

30-60 days credit

Import : Letter of Credit (L/C)

*Quality Certification*

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

Obtained the following certifications:

(1)

Type of certification: ISO 9002

Issuing authority : HONG KONG QUALITY ASSURANCE AGENCY

(2)

Type of certification: ISO 14000

*Mergers & Acquisitions*

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

(1)

Type : Acquisition

Parties involved : HEADWAY TECHNOLOGIES INC

Year of transaction : 2000

Details : Acquired HEADWAY TECHNOLOGIES INC, a company in the R&D and wafer fabrication of magnetic recording heads in the Silicon Valley, USA.

(2)

Type : Acquisition

Parties involved : ACASIA TECHNOLOGIES

Year of transaction : 2004

Details : Acquired ACASIA TECHNOLOGIES, a spin-off company in photonic packaging technologies of the APPLIED SCIENCE & TECHNOLOGY RESEARCH INSTITUTE of the HKSAR.

*Local Distribution Network*

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

1% of the annual turnover is attributed to local sales.

*Export Markets*

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

99% of the annual turnover is attributed to export.

*LOCAL BRANCHES & MANAGEMENT*

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

Branch : SAE MAGNETICS (HONG KONG) LTD - NEW TERRITORIES

Branch Address : Big Orange - Taiwai 2-8 Shing Wan Rd Tai Wai Shatin, New Territories,

*(Subsidiaries, Joint-ventures & Affiliates)

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

Company Name : DATACOM SAE PTE LTD

Address : Kampong Ubi Industrial Estate - Block 3015A Ubi Rd 1 #05-03 408705 Singapore

Country : Singapore

Relationship : Affiliate

Legal Form : Private company with limited liability

Company Type : Manufacturer

Industry : Computer & Information Products

Company Name : HEADWAY TECHNOLOGY INC

Country : USA

Relationship : Affiliate

Legal Form : Private company with limited liability

Company Type : Trader

Industry : Computer & Information Products

Company Name : HUSKO INC

Country : USA

Relationship : Affiliate

Legal Form : Private company with limited liability

Company Type : Trader

Industry : Computer & Information Products

Company Name : SAE KOREA INC

Country : South Korea

Relationship : Affiliate

Legal Form : Private company with limited liability

Company Type : Trader

Industry : Computer & Information Products

Company Name : SAE MAGNETICS (HK) LTD

Address : Winnerway Industrial Area Nancheng Dongguan 523087 Guangdong China

Country : China

Relationship : Subsidiary

Legal Form : Private company with limited liability

Company Type : Manufacturer

Industry : Electrical Equipment & Appliances

*Subsidiaries, Joint-ventures & Affiliates*

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

Maintains the following offices:

(1) Regional offices in Singapore and South Korea

(2) Factories in China, contact details are as follows:

Dongguan

---------------

Address : Winnerway Industrial Area Nancheng, Dongguan City, Guangdong Provinces, 523087

Tel no. : 769-22810033

Fax no. : 769-22811524

Dongguan - Changan

-----------------------------

Address : Conrad Hi Tech Park Zen An Rd, Changan Town, Dongguan City, Guangdong Provinces, 523870

Tel no. : 769-85496000

Fax no. : 769-85497000

Machinery/ Equipment used in manufacturing process includes the following :

- Field Emission Auger Nanoprobe System (PHI680 FE-AES)

- Time of Flight-Secondary Ion Mass Spectrometry (PHI Trift II TOF-SIMS)

- Scanning Electron Microscope/Energy Disperse Spectrometer (SEM/EDS, Super SEM)

- Transmission Electron Microscope (Jeol JEM 2100F TEM)

- Atom Force Microscope (D3100 SPM)

- Focus Ion Beam (FEI-200 THP / SII SMI 3050 FIB)

- Inductively Conpled Plasma Mass Spectrometry (X-series ICP-MS)

- Atomic Absorption Spectrometry (Hitachi Z-5000 AAS)

- Gas Chromatography (GC-MSD plus SHS/DHS)

- Ion Chromatography (Dionex DX-600 IC)

- Fourier Transform InfraRed Spectroscopy (FTIR)

- Liquid Particle Counter (LPC)

- Gas Corrosion Cabinet (GH-180HT Cabinet)

- Thermal Shock Chamber (T/S Chamber)

*Strategic Partners & Alliances*

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

Group name : TDK CORP Group

Details : The world's largest and most advanced ferrite manufacturer.

PAYMENT RATING : 3 OBTAINED SCORES : 60

Rating Key	Implication	Implications
1	Scores 85–100	Excellent
2	Scores 75 – 84	Above Average
3	Scores 50 – 74	Average
4	Scores 35 – 49	Fair
5	Scores 15 – 34	Below Average
6	Scores 01 – 14	Poor
NR	No Data	No Data

The rating indicates the payment pattern of SC based upon our Payment Database, comments from suppliers of SC, information from banks (if available), as well as industrial sources.

Dealings on open terms may be possible for MODERATE amounts depending on individual judgement experience.

As a private limited company there is no legal requirement according to local corporate law for public disclosure of detailed financials.

*BANK DETAILS*

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

Bank Name : BANK OF TOKYO-MITSUBISHI LTD

Branch : Admiralty,Hong Kong

Branch Address : 14Fl Admiralty Centre - Tower 1 18 Harcourt Rd Admiralty Hong Kong (Head Office)

SWIFT Code : BOTKHKHH

Bank Name : HONG KONG & SHANGHAI BANKING CORP LTD, THE

Branch : Central,Hong Kong

Branch Address : 9Fl HSBC Main Bldg 1 Queen's Rd Central Hong Kong (Head Office)

SWIFT Code : HSBCHKHH

Bank Name : SUMITOMO MITSUI BANKING CORP

Branch : Wanchai,Hong Kong

Branch Address : Rm 2601 26Fl Edinburgh Tower 15 Queen's Rd Wanchai Hong Kong (Head Office)

SWIFT Code : SMBCHKHH

SC is considered medium-sized in its line with a long history. Taking into consideration of SC’s general performance, a credit line up to USD 100,000 would appear to be within SC’s capacities.

Attached: trade references

SIC PRODUCT CLASSIFICATION & ACTIVITY

Activity Code Product/Service Description

Trading 3577 Computer peripheral equipment, and parts,

Trading 3672 Printed circuit boards

Trading 3679 Electronic components,

Trading 3695 Magnetic recording media

Trading 3827 Optical instruments, and parts,

Trading 5045 Computers Equip/Software

Trading 5065 Electronic Parts/Equip, NEC

HARMONIZED PRODUCT CLASSIFICATION & ACTIVITY

Activity Code Product/Service Description

Trading 8471 Automatic data process machines; magn reader, etc. computer hardware

Trading 8471705095 Disk drive units

Trading 8473 Parts etc for typewriters & other office machines computer accessories

Trading 8522900010 Magnetic recording and reproducing heads

Trading 8522906500 Printed circuit assemblies

Trading 8522907540 Magnetic heads for recording or reproducing apparatus

Trading 8542 Electronic integrated circuits & microassembl, parts

Trading 8542500000 Electronic integrated circuits, and microassemblies

Trading 9013800000 Optical devices, appliances and instruments

DETAILED PRODUCT CLASSIFICATION & ACTIVITY

Activity Product/Service Description

Trader Disk drives

Trader Computer peripherals

Trader Computer magnetic heads

Trader Optical components

INTERNATIONAL TRADE: ACTIVITY & MARKETS

Exporting to Asia

Exporting to Japan

Exporting to North America

Exporting to Singapore

Exporting to USA

Importing from Asia

Importing from Japan

Importing from North America

Importing from USA

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