MIRA INFORM REPORT

Report Date :

22.12.2011

IDENTIFICATION DETAILS

Name :	SAGETEL MOBILES (NINGBO) CO., LTD.
Registered Office :	No. 999, Dacheng East Road, Fenghua, Zhejiang Province, 315599 Pr
Country :	China
Financials (as on) :	31.12.2010
Date of Incorporation :	19.11.2002
Com. Reg. No.:	330200400026634
Legal Form :	Wholly Foreign-Owned Enterprise
Line of Business :	developing, manufacturing and selling mobile telephone & parts
No. of Employees :	1200 persons

RATING & COMMENTS

MIRA’s Rating :

B

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Maximum Credit Limit :	USD 500,000
Status :	Moderate
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 – September 30^th, 2011

Country Name	Previous Rating (30.06.2011)	Current Rating (30.09.2011)
China	a2	a2

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

Company name & address

SAGETEL MOBILES (NINGBO) CO., LTD.

NO. 999, DACHENG EAST ROAD, FENGHUA,

ZHEJIANG PROVINCE, 315599 PR CHINA

TEL: 86 (0) 574-88953444/88916449 FAX: 86 (0) 574-88916671

EXECUTIVE SUMMARY

INCORPORATION DATE : NOV. 19, 2002

REGISTRATION NO. : 330200400026634

REGISTERED LEGAL FORM : WHOLLY FOREIGN-OWNED ENTERPRISE

CHIEF EXECUTIVE : MR. XU XIGUANG (CHAIRMAN)

STAFF STRENGTH : 1,200

REGISTERED CAPITAL : USD 25,400,000

BUSINESS LINE : DEVELOPING, MANUFACTURING, TRADING

TURNOVER : CNY 547,850,000 (AS OF DEC. 31, 2010)

EQUITIES : CNY 120,230,000 (AS OF DEC. 31, 2010)

PAYMENT : AVERAGE

RECOMM. CREDIT RANGE : UP TO USD 500,000 (PERIODICAL REVIEW)

MARKET CONDITION : AVERAGE

FINANCIAL CONDITION : FAIRLY STABLE

OPERATIONAL TREND : FAIRLY STEADY

GENERAL REPUTATION : AVERAGE

EXCHANGE RATE : CNY 6.35= 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 Nov. 19, 2002.

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 developing, manufacturing and assembling mobile telephone and related electronic equipment & parts; selling self-made mobile telephone; offering service on developing, manufacturing mobile telephone and related electronic equipment & parts; technology service and repairing service on related products.

SC is mainly engaged in developing, manufacturing and selling mobile telephone & parts.

Mr. Xu Xiguang is legal representative, chairman and general manager of SC at present.

SC is known to have approx. 1,200 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 Fenghua. Our checks reveal that SC rents the total premise, but the gross area of the premise is unspecific.

http://www.sagetel.net/ the design is professional and the content is well organized. At present it is both in Chinese and English versions.

Certificates:

========

ISO9001:2000

ISO14001:2004

SC was formerly known as SAGEM Mobiles Ningbo Co., Ltd.

MAIN SHAREHOLDERS:

Name % of Shareholding

Hong Kong SMC Mobile Co., Limited 100

CR No.: 1303413

Company Status: Private

l Legal representative, chairman and general manager:

Mr. Xu Xiguang , born in 1964. He is currently responsible for the overall management of SC.

Working Experience(s):

At present Working in SC as legal representative, chairman and general manager.

SC is mainly engaged in developing, manufacturing and selling mobile telephone & parts.

SC’s products mainly include: all kinds of mobile phones.

Brand: SAGETEL.

SC sources its materials 90% from domestic market, and 10% from overseas market. SC sells 15% of its products in domestic market, and 85% to overseas market

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.

Note: SC refused to release its major suppliers and customers.

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.

Industrial and Commercial Bank of China Fenghua Sub-branch

AC#: N/A

Relationship: Normal.

Balance Sheet

Unit: CNY’000

	As of Dec. 31, 2009	As of Dec. 31, 2010
Cash & bank	52,150	59,170
Inventory	56,350	109,000
Accounts receivable	105,520	78,780
Trading financial assets	3,190	0
Advances to suppliers	40,870	15,450
Notes receivables	0	350
Other receivables	7,090	7,850
Other current assets	30	140
	---------------	------------------
Current assets	265,200	270,740
Fixed assets net value	82,560	67,790
Projects under construction	0	0
Deferred tax assets	910	890
Intangible assets	340	180
Other assets	30	10
	---------------	------------------
Total assets	349,040	339,610
	============	=============
Short loans	15,320	23,470
Accounts payable	100,430	142,100
Advances from clients	59,860	22,470
Notes payable	5,750	25,350
Taxes payable	-9,340	-6,970
Salaries payable	7,090	8,420
Other payable	5,950	4,410
Accrued expenses	0	0
Other current liabilities	20	30
	-------------------	------------------
Current liabilities	185,080	219,280
Long term liabilities	0	0
Other non- current liabilities	190	100
	-------------------	------------------
Total liabilities	185,270	219,380
Equities	163,770	120,230
	-------------------	------------------
Total liabilities & equities	349,040	339,610
	===========	=============

Income Statement

Unit: CNY’000

	As of Dec. 31, 2009	As of Dec. 31, 2010
Turnover	767,860	547,850
Cost of goods sold	776,070	521,550
Taxes and additional of main operation	240	90
Sales expense	4,760	35,680
Management expense	30,390	31,250
Finance expense	-890	2,220
Asset impairment loss	2,140	0
Investment profits	310	0
Profit before tax	-44,510	-43,500
Less: profit tax	340	30
Profits	-44,850	-43,530

Important Ratios

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

	As of Dec. 31, 2009	As of Dec. 31, 2010
*Current ratio	1.43	1.23
*Quick ratio	1.13	0.74
*Liabilities to assets	0.53	0.65
*Net profit margin (%)	-5.84	-7.95
*Return on total assets (%)	-12.85	-12.82
*Inventory /Turnover ×365	27 days	73 days
*Accounts receivable/Turnover ×365	51 days	53 days
*Turnover/Total assets	2.20	1.61
* Cost of goods sold/Turnover	1.01	0.95

PROFITABILITY: FAIR

l The turnover of SC appears fairly good in its line, but it decreased in 2010.

l SC’s net profit margin is fair in both 2 years.

l SC’s return on total assets is fair in both 2 years.

l SC’s cost of goods sold is TOO high in 2009 and high in 2010, comparing with its turnover.

LIQUIDITY: AVERAGE

l The current ratio of SC is maintained in a normal level in both 2 years.

l SC’s quick ratio is maintained in a normal level in 2009 but in a fair level in 2010.

l The inventory of SC is average in 2009 but fairly large in 2010.

l The accounts receivable of SC is fairly large in 2009, and average in 2010.

l The short loans of SC are average in both 2 years.

l SC’s turnover is in an average level in both 2 years, comparing with the size of its total assets.

LEVERAGE: AVERAGE

l The debt ratio of SC is average in both 2 years.

l The risk for SC to go bankrupt is average.

Overall financial condition of the SC: Fairly Stable.

SC is considered large-sized in its line with fairly stable financial conditions. The large amount of inventory could be a threat to SC’s financial conditions. A credit line up to USD 500,000 would appear to be within SC’s capacities upon a periodical review basis.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.52.67
UK Pound	1	Rs.82.53
Euro	1	Rs.69.13

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%)

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

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.