MIRA INFORM REPORT

Report Date :

08.04.2011

IDENTIFICATION DETAILS

Correct Name :	SHANGHAI YALI STONE MATERIAL CO. LTD

Registered Office :	Room 623, Building 4, Lane 3199, Zhenbei Road, Putuo District, Shanghai City Zip Code 200333

Country :	China

Financials (as on) :	31.12.2009

Date of Incorporation :	23.12.1999

Com. Reg. No.:	310107000279892

Legal Form :	Limited Liability Company

Line of Business :	Sales of stones

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 :	50,000 Chinese Yuan
Status :	Satisfactory
Payment Behaviour :	Usually Correct
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 – December 31, 2010

Country Name

Previous Rating

(30.09.2010)

Current Rating

(31.12.2010)

China

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

Company name & address

SHANGHAI YALI STONE MATERIAL CO. LTD

Room 701, Building 8, Yaojiang Garden, Lane. 1739, Xizang South Road, Shanghai City

200011

Tel : 86 21 53595566

Fax 86 21 53595500

Website www.yalistone.com

Currency in this report is Chinese Yuan unless otherwise stated.

Exchange Rate: 1 USD=6.55 Chinese Yuan

"--"in this report indicates "unavailable" due to insufficient information or "no comments

EXECUTIVE SUMMARY

DATE OF establishment : dec 23^rd, 1999

Aic Registration No. : 310107000279892

REGISTERED LEGAL FORM : limited liability company

REGISTERED CAPITAL : 500,000.00

main BUSINESS : sales of stones

TURNOVER : 24,000.00 (As of 2009)

net profit : 0 (As of Dec.31th, 2009)

total assets : 512,000.00 (As of Dec.31th, 2009)

net worth : 502,000.00 (As of Dec.31th, 2009)

employees : 10

import and export

permits : no

base CREDIT limit : 50,000 Chinese Yuan

EXCHANGE RATE : 1 Usd=6.55 CNY (Apr.7^TH, 2011)

Registered Address: Room 623, Building 4, Lane 3199, Zhenbei Road, Putuo District, Shanghai City, Zip Code: 200333

Telephone: 86 21 53595566

Business Address: Room 701, Building 8, Nongyaojianghuayuan, NO. 1739, Xizang South Road, Shanghai City, Zip Code: 200011

Telephone: 86 21 53595566

Fax: 86 21 53595500

SIC Code (China): 6365 wholesale of building material

REGISTRATION

Date of Establishment	dec 23^rd, 1999
Registry	Administration Bureau of Industry and Commerce - Shanghai
Legal Representative	Dou Yangjun
AIC Registration Number	310107000279892
Registered Legal Form	limited liability company
Registered Capital	500,000.00
Operating Period	From dec 23^rd, 1999 to dec 22^nd, 2019.
Business Scope	Sales of building materials, hardwares, chemical raw materials ( excluding dangerous chemicals, fireworks and crackers, civil explosives, precursor chemicals), electrical and electronic products, metal materials, rubber products, general merchandise, etc. ( With licenses for those needed.)
Changes in Registration	Dec 16^th, 2009 Subject’s registration address was changed from NO. 3370, Zhenbei Road, Putuo District, Shanghai City to the present registration address.

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.

REGISTRATION INFO: AVAILABLE

FINANCIAL REPORTS: AVAILABLE

FIELD INVESTIGATION

1. Subject’s income comes mainly from Black Galaxy, English Brown and India Red Brown which take up about 70% of its income. Another 30% comes from New Imperial Red and Orion Blue. Its sales are developed directly to the end users. The industry of glass product is an industry with fierce competition. With a long history, subject has developed into a certain scale and accumulated certain customers, enjoying certain popularity in the local place. Generally speaking, subject’s competitiveness is average in the local place.

2. Shanghai, where subject is located is the biggest city in China and an important financial center. High economic development level provides enterprises here with great opportunities as well as big challenges. As a domestically invested enterprise selling stone materials, subject enjoys no favorable policies provided by the local government.

SHAREHOLDERS AND SHARES

As indicated in the following table:

Shareholder	Capital Subscribed	Percentage
Li Fengying	50,000.00	10%
Dou Yangjun	450,000.00	90%
Total	500,000.00	100%

Shareholder	Way of investment	Paid-up Percentage
Li Fengying	Capital	100%
Dou Yangjun	Capital	100%

Background of major shareholder

Name	Dou Yangjun
Gender	Male
ID NO.	310110196601303815
Date of Birth	Jan 30^th, 1966

Name	Li Fengying
Gender	Female
ID NO.	310110431123502
Date of Birth	Nov 23^rd, 1943

AFFILIATE(S)

After checking with the industry and commerce channels, no affiliates of SC is found.

MANAGEMENT

Name	Dou Yangjun
Title	Executive director and Manager
Gender	Male
Date of Birth	Jan 30^th, 1966
ID NO.	310110196601303815
Nationality	China

NUMBER OF EMPLOYEES

Employees: 10

Recent Recruitment：No.

BANKERS INFORMATION

Bank Name	Shanghai Rural Commercial Bank – Zhenbei Branch
Account No. for Chinese Yuan	32458108010118755
Telephone of the person investigated	86 21 62653467
Comment	The investigated person confirmed that SC had opened an account in this bank, but it had already cancelled its account.

Bank Name	Shanghai Bank – Puqiao Branch
Account No. for Chinese Yuan	31628500800207576
Telephone of the person investigated	86 21 34010041
Comment	The investigated person confirmed that SC had opened an account in this bank. But he refused to disclose any account information for the reason of keeping secret for the depositor.

OFFICE FACILITIES

Geographic Location: SC is located in Room 701, Building 8, Yaojiang Garden, Lane. 1739, Xizang South Road, Shanghai City. The traffic condition and environment around the premise is good.

Property Ownership: rented

TRADEMARKS & Patents

After checking with the Trademark Office of Chinese Administration Bureau of Industry, no trademarks or patents of SC were found.

MAIN PRODUCTS & SERVICES

Main business	Sales of Stone materials.
Products and services	Subject’s products include Black Galaxy, English Brown, India Red Brown, etc. Subject is the exclusive distributor of India Red Brown in China.

SALES INFORMATION

Percentage of domestic sales	100%
Regions	All over China
Major domestic client	Stone Processing Factories.
Sales Terms:	Prompt payment; on credit
Subject’s stones are mainly sold domestically. Despite its long history and certain customer base, its sales channels still need to be expanded.
The above information was confirmed by SC’s employee

PURCHASE INFORMATION

Main Commodities Purchased	Black Galaxy, English Brown, India Red Brown, etc
Number of Major Suppliers	About 3
Major Suppliers	XIAMEN YALI STONE CO.,LTD, etc.
Main Terms of Payment	Prompt payment; on credit
Subject company’s stone are mainly from India, Britain, Spain, etc. Since its suppliers are its related companies, it cooperates well with its suppliers and has full sources of goods.
The above information was confirmed by SC’s employee

CREDIT

Since subject’s suppliers are mainly its related companies, we can’t provide its specific credit records in this report.

LITIGATION RECORDS

After checking with China court website, local court website and other major searching websites, no litigation records related to subject in the recent 3 years was found.

FINANCE

Balance Sheet (Unit: 1,000 Chinese Yuan):

	2007-12-31	2008-12-31	2009-12-31
Current assets
Money capital	32	3	1
Short-term investment
Notes receivable
Net ball of Account Receivable	241	11	11
Payment in advance
Subsidy Receivable
Other Account Receivable	-	500	500
Inventory	179	-
Other current assets
Export rebates receivable
Total current Assets	452	514	512
Long-term investment
Long-term investment
Original value of fixed assets
Accumulated depreciation
Net fixed assets	0	0	0
Fixed assets depreciation reserve
Net Value of Fixed Assets	0	0	0
Fixed assets in liquidation
Projects being constructed
Fixed assets losses in suspense
Total fixed assets	0	0	0
Intangible assets and deferred assets
Intangible assets
Deferred assets	50
Total intangible and deferred assets	50	-	-
Other long-term assets
Other long-term assets
Total assets	502	514	512
Current liabilities
Short-term loans
Notes payable
Account payable
Deposit received
Other accounts payable	0	12	10
Wages payable
Welfare payable
Tax unpaid
Unpaid profit	0	2
Accrued expenses
L/T debt due in 1 year
Other current liabilities
Total current liabilities	0	14	10
L/T liabilities
L/T loans
Bonds payable
L/T account payable
Total L/T liabilities	0	0	0
Deferred tax
Deferred tax
Total liabilities	0	14	10
Owner’s interest
Paid-up capital	500	500	500
Contributed surplus
Surplus reserves
Unconfirmed investment loss
Undistributed profits	2	0	2
Minority interest
Total owner’s interest	502	500	502
Liabilities and owner’s interest	502	514	512

Income Statement (Unit: 1,000):

	2007	2008	2009
Main business income	29	33	24
Main business cost
Tax and associate charge
Main business profit	29	33	24
Other business profit
Operation expenses
- management expenses	27	32	23
Financial expenses
Operation profit	2	1	1
Investment profit
Subsidy income
Non business income
- non business expenses
Prior year income adjustment
Total profit	2	1	1
- income tax	1	1	1
Minority stock holder’s interest
Net profit	1	0	0

Important Ratios:

	2007	2008	2009
Return on net assets (%)	0.20	0.00	0.00
Return on total assets (%)	0.20	0.00	0.00
Net profit margin (%)	3.45	0.00	0.00
Turnover of total assets	0.06	0.06	0.05
Turnover of current assets	0.06	0.06	0.05
Turnover of accounts receivable	0.12	3.00	2.18
Inventory turnover	0.00	-	-
Asset liability ratio (%)	0.00	2.72	1.95
Current ratio	-	36.71	51.20
Quick ratio	-	36.71	51.20

Major Financial Information (Unit: 1000)

	2007	2008	2009
Main business income	29	33	24
Total profit	2	1	1
Net profit	1	0	0
Total assets	502	514	512
Total liabilities	0	14	10
Total owner’s interest	502	500	502
Source from	government	government	government
Whether audited or not	Yes	Yes	Yes

Analysis of Financial Indicators

We mainly analyze Subject’s indicators in 2009. All of SC’s profitability indicators are all zero which indicates that SC’s profitability is poor. SC’s turnover of total assets and turnover of current assets indicate that its capital operation ability is poor. SC’s turnover of account receivable is low which indicates that its debt recovery speed is low. SC’s asset liability ratio is low, indicating that its long-term solvency is strong. In addition, SC’s current ratio and quick ration show that its short-term solvency is good.

INDUSTRY PROFILE

Industry

SIC Code (China): 6365 wholesale of building material

Description: wholesale, import and export of construction material and home decoration material.

Status Quo & Trend

In 2009, under the supporting policy of expanding domestic demand and optimizing industrial structure, building material industry in China maintained fast growth although affected by the crisis. The sales growth of major building material recovered with the price being stabilized. In Q1 2010, the output of building material achieved fast growth. Output of concrete increased by 20.7% y/y and glass increased 14% y/y. In China, the industry of building material would enter into a new era that is decided by self-renovation and good management. Advanced technologies, high-level products and regulated competition may be the major feature of the industry in the future.

GENERAL COMMENTS

Subject Company which was established in December, 1999 was a limited liability company. SC mainly deals with wholesale and sales of stones. With a long history but small business scale, its fame in the industry still needs to be promoted.

SC’s existing financial data show that its main business income in 2009 decreased compared with that of 2008. That indicates that SC’s profitability still needs to be promoted. SC has many other accounts receivable in recent years, which indicates that it has close business relationship with its related companies. In addition, SC’s capital operation ability is poor. Its long-term and short-term solvency is good.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.44.22
UK Pound	1	Rs.71.97
Euro	1	Rs.63.23

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

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.