MIRA INFORM REPORT

Report Date :

13.06.2011

IDENTIFICATION DETAILS

Name :	ROTAREX STAR VALVE (SHANGHAI) CO., LTD.

Registered Office :	No. 60 Yuanzhong Road, Nanhui Industry Zone, Shanghai 201300 Pr

Country :	China

Financials (as on) :	31.12.2010

Date of Incorporation :	29.06.2000

Com. Reg. No.:	310000400240773

Legal Form :	Wholly Foreign-Owned Enterprise

Line of Business :	Manufacturing electronic industry gas control valve and other high-precision gas valve, selling its owned products.

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 125,000
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 – March 31^st, 2011

Country Name

Previous Rating

(31.12.2010)

Current Rating

(31.03.2011)

China

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

Name and address

ROTAREX STAR VALVE (SHANGHAI) CO., LTD.

NO. 60 YUANZHONG ROAD, NANHUI INDUSTRY ZONE,

SHANGHAI 201300 PR CHINA

TEL: 86 (0) 21-58003232

FAX: 86 (0) 21-58003226

EXECUTIVE SUMMARY

Date of Registration : JUNE 29, 2000

REGISTRATION NO. : 310000400240773

LEGAL FORM : Wholly foreign-owned enterprise

CHIEF EXECUTIVE : Jean Claude Schmitz (LEGAL REPRESENTATIVE)

REGISTERED CAPITAL : USD 2,750,000

staff : 200

BUSINESS CATEGORY : manufacturing

Revenue : CNY 69,880,000 (AS OF DEC. 31, 2010)

EQUITIES : CNY 26,520,000 (AS OF DEC. 31, 2010)

WEBSITE : http://www.rotarex.com.cn

E-MAIL : xu.frank@china.rotarex.com

PAYMENT : AVERAGE

Recommended Credit Limit: UP TO USD 125,000

MARKET CONDITION : average

FINANCIAL CONDITION : FAIRly stable

OPERATIONAL TREND : STEADY

GENERAL REPUTATION : AVERAGE

EXCHANGE RATE : CNY 6.48 = USD 1

Adopted abbreviations (as follows)

SC - Subject Company (the company inquired by you)

N/A – Not available

CNY – China Yuan Ren Min Bi

OPERATIONAL TREND & GENERAL REPUTATION

This section aims at indicating the relative positions of SC in respect of its operational trend & general reputation

Operational Trend:- General Reputation:-

Upward Excellent

Steady Good

Fairly Steady Fairly Good

Ordinary Average

Fair Fair

Stagnant Detrimental

Downward Not known

Not known Not yet be determined

Not yet be determined

LEGAL STATUS & HISTORY

Note: SC’s complete name should be the above stated one, instead of the given name – Rotarex Star.

SC was established as a wholly foreign-owned enterprise of PRC with State Administration of Industry & Commerce (SAIC) under registration No.: 310000400240773 on June 29, 2000.

SC’s Organization Code Certificate No.: 607418032

SC’s registered capital: USD 2,750,000

As of December 31, 2010, SC’s paid-in capital was USD 2,750,000.

No significant changes of SC have been noted in SAIC since its incorporation.

Current Co search indicates SC’s shareholders & chief executives are as follows:-

Name of Shareholder (s)	% of Shareholding
Rotarex Group (Luxembourg)	100

SC’s Chief Executives:-

Legal Representative and Chairman: Jean Claude Schmitz

General Manager: Xu Xinnong

RECENT DEVELOPMENT

No recent development was found during our checks at present.

SHAREHOLDER CHART & BACKGROUND

Name % of Shareholding

Rotarex Group (Luxembourg) 100

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

ROTAREX Group was established in 1989 and evolved from CEODEUX S.A. which was founded 1922, and specializes in the manufacture of cylinder valves, regulators and systems for all types of gases as well as welding equipments. The Group includes several production and sales units in Europe – Luxembourg, France, Spain, Germany, UK, Poland, and Czech Republic – Singapore, North and South America, as well as South Africa and Australia.The ROTAREX philosophy is based on a globally integrated strategy as well as on total quality care.

Address: 24 rue de Diekirch - B.P.19 - L-7505 LINTGEN Luxembourg

Tel: (+352) 32 78 32-1

Web: http://www.rotarex.com

MANAGEMENT

Jean Claude Schmitz, Legal Representative and Chairman

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

Ø Gender: M

Ø Nationality: Luxembourg

Ø Qualification: University

Ø Working experience (s):

At present, working in SC as legal representative and chairman.

Xu Xinnong , General Manager

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

Ø Gender: M

Ø Qualification: University

Ø Working experience (s):

At present, working in SC as general manager.

BUSINESS OPERATION

SC’s registered business scope includes manufacturing electronic industry gas control valve and other high-precision gas valve, selling its owned products.

SC is mainly engaged in manufacturing and selling electronic industry gas control valve and other high-precision gas valve.

SC’s products mainly include:

Combination Valve LPG Vehicle

C351 Car cylinder valve

Y841 vehicle cylinder valve

Y839 vehicle cylinder valve

SRG541 low-voltage regulator

SRG541 commercial low-voltage regulator

SRG555 pressure regulator

SC sources its materials 20% from domestic market, and 80% from overseas market. SC sells 100% of its products in domestic market, mainly Jiangsu.

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

*Major Customer:

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

Sinoma Technology (Suzhou) Co., Ltd.

*Major Supplier:

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

LPG. TEC (Luxembourg)

Staff & Office:

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

SC is known to have approx. 200 staff at present.

SC owns an area as its operating office & factory of approx. 33,745 sq. meters at the heading address.

RELATED COMPANY

SC is not known to have any subsidiary at present.

PAYMENT

Overall payment appraisal:

( ) Excellent ( ) Good (X) Average ( ) Fair ( ) Poor ( ) Not yet be 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.

BANKING

The bank information of SC is not filed in SAIC.

FINANCIALS

Balance Sheet

Unit: CNY’000	As of Dec. 31, 2009	As of Dec. 31, 2010
Cash	3,810	1,460
Accounts receivable	10,100	13,490
Advances to suppliers	0	0
Other receivable	2,240	1,430
Inventory	25,270	36,240
Non-current assets within one year	0	0
Other current assets	600	3,090
	------------------	------------------
Current assets	42,020	55,710
Fixed assets	19,640	18,780
Construction in progress	0	0
Intangible assets	0	0
Long-term prepaid expenses	0	0
Deferred income tax assets	0	0
Other non-current assets	90	250
	------------------	------------------
Total assets	61,750	74,740
	=============	=============
Short-term loans	8,000	8,000
Notes payable	0	0
Accounts payable	29,410	33,140
Wages payable	0	0
Advances from clients	0	0
Other payable	400	3,490
Other current liabilities	920	810
	------------------	------------------
Current liabilities	38,730	45,440
Non-current liabilities	2,780	2,780
	------------------	------------------
Total liabilities	41,510	48,220
Equities	20,240	26,520
	------------------	------------------
Total liabilities & equities	61,750	74,740
	=============	=============

Income Statement

Unit: CNY’000	As of Dec. 31, 2010
Revenue	69,880
Cost of sales	62,890
Sales expense	3,230
Management expense	9,150
Finance expense	-370
Profit before tax	6,990
Less: profit tax	710
Profits	6,280

Important Ratios

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

	As of Dec. 31, 2009	As of Dec. 31, 2010
*Current ratio	1.08	1.23
*Quick ratio	0.43	0.43
*Liabilities to assets	0.67	0.65
*Net profit margin (%)	--	8.99
*Return on total assets (%)	--	8.40
*Inventory / Revenue ×365	--	190 days
*Accounts receivable/ Revenue ×365	--	71 days
* Revenue/Total assets	--	0.93
* Total business cost / Revenue	--	0.90

FINANCIAL COMMENTS

PROFITABILITY: AVERAGE

l The revenue of SC appears average in its line in 2010.

l SC’s net profit margin is fairly good in 2010.

l SC’s return on total assets is fairly good in 2010.

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

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 large.

l The accounts receivable of SC is maintained in an average level.

l SC’s short-term loan is in an average level.

l SC’s revenue is in a fair 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 stable.

CONCLUSIONS

SC is considered medium-sized in its line with fairly stable financial conditions. The large amount of inventory may be a threat to SC’s financial condition. We consider a credit line at the above amount appears to be within SC’s capacities.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.44.72
UK Pound	1	Rs.72.93
Euro	1	Rs.64.72

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.