MIRA INFORM REPORT

Report Date :

19.02.2011

IDENTIFICATION DETAILS

Name :	PAMICA ELECTRIC MATERIAL (HUBEI) CO., LTD.
Registered Office :	No. 226, Yuli Avenue, Tongcheng County, Hubei Province 437400 Pr
Country :	China
Financials (as on) :	31.12.2009
Date of Incorporation :	16.10.2000
Com. Reg. No.:	422324000001000
Legal Form :	Limited Liabilities Company
Line of Business :	manufacturing and selling mica paper and its products.

RATING & COMMENTS

MIRA’s Rating :

Ba

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

Maximum Credit Limit :	usd 600,000
Status :	Satisfactory
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 – June 30, 2010

Country Name	Previous Rating (01.04.2010)	Current Rating (30.06.2010)
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

pamica electric material (hubei) co., ltd.

NO. 226, YULI AVENUE, TONGCHENG COUNTY

HUBEI PROVINCE 437400 PR CHINA

TEL: 86 (0) 715-4337388/4352570 FAX: 86 (0) 715-4354338

EXECUTIVE SUMMARY

INCORPORATION DATE : oct. 16, 2000

REGISTRATION NO. : 422324000001000

REGISTERED LEGAL FORM : limited liabilities company

CHIEF EXECUTIVE : Mr. pan dujiang (chairman)

STAFF STRENGTH : 650

REGISTERED CAPITAL : cny 28,386,000

BUSINESS LINE : manufacturing

TURNOVER : cny 111,680,000 (AS OF DEC. 31, 2009)

EQUITIES : CNY 48,160,000 (AS OF DEC. 31, 2009)

PAYMENT : average

RECOMM. CREDIT RANGE : up to usd 600,000

MARKET CONDITION : competitive

FINANCIAL CONDITION : stable

OPERATIONAL TREND : steady

GENERAL REPUTATION : AVERAGE

EXCHANGE RATE : CNY 6.59 = US$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 limited liabilities company at local Administration for Industry & Commerce (AIC-The official body of issuing and renewing business license) on Oct. 16, 2000.

Company Status: Limited liabilities co.

This form of business in PR China is defined as a legal person. No more than fifty shareholders contribute its registered capital jointly. Shareholders bear limited liability to the extent of shareholding, and the co. is liable for its debts only to extent of its total assets. The characteristics of this form of co. are as follows:

Upon the establishment of the co., an investment certificate is issued to the each of shareholders.

The board of directors is comprised of three to thirteen members.

The minimum registered capital for a co. is CNY 30,000.

Shareholders may take their capital contributions in cash or by means of tangible assets or intangible assets such as industrial property and non-patented technology.

Cash contributed by all shareholders must account for at least 30% of the registered capital.

Existing shareholders have pre-exemption right to purchase shares of the co. offered for sale by the other shareholders and to subscribe for the newly increased registered capital of the co.

SC’s registered business scope includes manufacturing and selling electrical insulation materials; exporting self-made products and technology; importing raw and auxiliary materials, instruments, machinery and equipment, spare parts and technology used for self-production (excluding the goods and technology prohibited or limited by the country); processing with imported materials, processing with imported samples, assembling with imported parts, and compensation trade in agreement.

SC is mainly engaged in manufacturing and selling mica paper and its products.

Mr. Pan Dujiang has been the legal representative and chairman of SC since 2000.

SC is known to have approx. 650 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 Tongcheng County. Our checks reveal that SC owns the total premise about 150,000 square meters.

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

Email: sales@pamica.com.cn

SC has obtained ISO14001:2004, ISO9001:2000 certificates, etc.

Changes of its registered information are as follows:

Date of change	Item	Before the change	After the change
2007-12	Registration No.	4223001010135	Present one

MAIN SHAREHOLDERS:

Name % of Shareholding

Pan Dujiang 33

He Li 11

Li Qingbo 11

Other individuals 45

l Legal representative and Chairman:

Mr. Pan Dujiang, in his 40’s with university education. He is currently responsible for the overall management of SC.

Working Experience(s):

From 2000 to present Working in SC as legal representative and chairman

l General Manager:

Mr. Pan Xiebao, in his 40’s with university education. He is currently responsible for the daily management of SC.

Working Experience(s):

From 2000 to present Working in SC as general manager

SC is mainly engaged in manufacturing and selling mica paper and its products.

SC’s products mainly include: Mica sheet, Mica tape, and Mica paper, etc.

SC sources its materials 60% from domestic market, and 40% from overseas market, mainly India; SC sells its products 85% to overseas market, mainly Europe, America, and Southeast Asia, and 15% in domestic market.

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

*Major Customer:

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

Guangdong Midea Electric Appliances Co., Ltd.

Note: SC’s management declined to release its major suppliers.

SC has Offices in Shenzhen, Shunde, Jiangsu, Zhejiang, and Tianjin.

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.

Agricultural Bank of China

AC#17-700201040002112

Relationship: Normal.

Balance Sheet

Unit: CNY’000

	as of Dec. 31, 2008	as of Dec. 31, 2009
Cash & bank	9,310	14,720
Inventory	23,510	24,590
Accounts receivable	2,960	15,630
Advances to suppliers	2,960	300
Notes receivable	7,310	4,220
Other receivables	480	1,240
Other current assets	-40	-50
	------------------	------------------
Current assets	46,490	60,650
Fixed assets net value	16,890	17,590
Projects under construction	1,310	1,530
Long term investment	0	0
Intangible assets	310	2,060
Other assets	20	20
	------------------	------------------
Total assets	65,020	81,850
	=============	=============
Short loans	9,790	17,210
Accounts payable	7,310	8,960
Advances from customers	0	0
Notes payable	0	0
Salaries and welfare payable	2,180	10
Taxes payable	-270	-2,130
Other payable	3,550	2,640
Other current liabilities	10	0
	------------------	------------------
Current liabilities	22,570	26,690
Long term liabilities	0	7,000
	------------------	------------------
Total liabilities	22,570	33,690
Equities	42,450	48,160
	------------------	------------------
Total liabilities & equities	65,020	81,850
	=============	=============

Income Statement

Unit: CNY’000

	as of Dec. 31, 2009
Turnover	111,680
Cost of goods sold	88,720
Taxes and additional of main operation	780
Sales expense	6,930
Management expense	7,630
Finance expense	1,510
Profit before tax	6,090
Less: profit tax	910
Profits	5,180

Important Ratios

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

	as of Dec. 31, 2008	as of Dec. 31, 2009
*Current ratio	2.06	2.27
*Quick ratio	1.02	1.35
*Liabilities to assets	0.35	0.41
*Net profit margin (%)	/	4.64
*Return on total assets (%)	/	6.33
*Inventory /Turnover ×365	/	80 days
*Accounts receivable/Turnover ×365	/	51 days
*Turnover/Total assets	/	1.36
* Cost of goods sold/Turnover	/	0.79

PROFITABILITY: AVERAGE

l The turnover of SC appears fairly good in its line in 2009.

l SC’s net profit margin is average in 2009.

l SC’s return on total assets is average in 2009.

l SC’s cost of goods sold is average in 2009, comparing with its turnover.

LIQUIDITY: AVERAGE

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

l SC’s quick ratio is maintained in a normal level in both 2 years.

l The inventory of SC appears fairly large in both 2 years.

l The accounts receivable of SC appears average in both 2 years.

l The short-term loan of SC appears fairly large in both 2 years.

l SC’s turnover is in an average level in 2009, 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 fairly low.

Overall financial condition of the SC: Stable.

SC is considered medium-sized in its line with stable financial conditions. The given credit amount would appear to be within SC’s capacities, while a credit line up to USD 600,000 would appear to be within SC’s capacities.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.45.18
UK Pound	1	Rs.73.04
Euro	1	Rs.61.43

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%)

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.