MIRA INFORM REPORT

Report Date :

10.04.2012

IDENTIFICATION DETAILS

Name :	SHANTOU LIGHT INDUSTRIAL MACHINERY FACTORY CO., LTD.

Registered Office :	No. 10 Hudi Road, Jinping District, Shantou, Guangdong Province 515000 Pr

Country :	China

Financials (as on) :	31.12.2011

Date of Incorporation :	06.01.1993

Com. Reg. No.:	440500000013123

Legal Form :	Limited Liabilities Company

Line of Business :	manufacturing and selling machinery and equipment

No. of Employees :	242

RATING & COMMENTS

MIRA’s Rating :

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

Maximum Credit Limit :	USD 20,000

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 – March 31^st, 2012

Country Name

Previous Rating

(31.12.2011)

Current Rating

(31.03.2012)

China

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

Company name & address

shantou light industrial machinery factory co., ltd.

no. 10 hudi road, jinping district, shantou

guangdong province 515000 PR CHINA

TEL: 86 (0) 754-88220912/88210315/88205859/88101174

FAX: 86 (0) 754-88101173

EXECUTIVE SUMMARY

Date of Registration : january 6, 1993

REGISTRATION NO. : 440500000013123

LEGAL FORM : Limited liabilities company

CHIEF EXECUTIVE : li yang (LEGAL REPRESENTATIVE)

REGISTERED CAPITAL : cny 24,230,000

staff : 242

BUSINESS CATEGORY : manufacturing

Revenue : CNY 26,360,000 (AS OF DEC. 31, 2011)

EQUITIES : CNY 5,960,000 (AS OF DEC. 31, 2011)

WEBSITE : www.stwmf.com

E-MAIL : stwmf@pub.shantou.gd.cn

PAYMENT : AVERAGE

Recommended Credit Limit: UP TO USD 20,000 (PERIODICAL REVIEW)

MARKET CONDITION : fair

FINANCIAL CONDITION : FAIR

OPERATIONAL TREND : FAIR

GENERAL REPUTATION : AVERAGE

EXCHANGE RATE : CNY 6.31 = 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

SC was established as a limited liabilities company of PRC with State Administration of Industry & Commerce (SAIC) under registration No.: 440500000013123 on January 6, 1993.

SC’s Organization Code Certificate No.: 19275846-4

SC’s registered capital: cny 24,230,000

SC’s paid-in capital: cny 24,230,000

Registration Change Record:

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

Li Yang and Other individuals

100

SC’s Chief Executives:-

Position	Name
Legal Representative, Chairman, and General Manager	Li Yang

RECENT DEVELOPMENT

No recent development was found during our checks at present.

SHAREHOLDER CHART & BACKGROUND

Name % of Shareholding

Li Yang and Other individuals 100

MANAGEMENT

Li Yang, Legal Representative, Chairman and General Manager

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

Ø Gender: M

Ø Qualification: University

Ø Working experience (s):

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

BUSINESS OPERATION

SC’s registered business scope includes manufacturing and processing industrial special equipment; selling general machinery, electrical machinery and equipment, auto parts, building materials, hardware, instrumentation, knitwear, department stores, textiles, arts and crafts, ceramic products; exporting its products and technology; importing materials, instrument, machinery and equipment, parts and technology needed for its production, excluding the goods forbidden by the government.

SC is mainly engaged in manufacturing and selling machinery and equipment.

SC’s products mainly include:

Full Automatic Bodywelders

Semi-automatic Welding Machine

Automatic Feeding Machine

Automatic Scroll Shear

Automatic Vertical Swing Flanger With Beader

Etc.

SC sources its materials 80% from domestic market, and 20% from overseas market, mainly Taiwan. SC sells 70% of its products in domestic market, and 30% to overseas market, mainly Mid East, Southeast Asia.

The buying terms of SC include Check, 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 Local Competitors:

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

Shantou Dongyuan Light Industrial Machinery Factory Co., Ltd.

Shantou Jinyuan Huaxing Light Industrial Machinery Factory

Shantou Ruiping Light Industrial Machinery Factory Co., Ltd.

Shantou Chenghai Hanjiang Light Industrial Machinery Co., Ltd.

Etc.

Staff & Office:

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

SC is known to have approx. 242 staff at present.

SC owns an area as its operating office and factory, but the detailed information is unknown.

RELATED COMPANY

SC is known to have a subsidiary at present:

n SHIN-I Machinery (Shantou) Co., Ltd.

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

Date of Registration: December 27, 1999

Registration No.: 440500400011859

Legal Form: Limited Liabilities Company

Chief Executive: Lin Qiuxiong

Registered Capital: CNY 6,000,000

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 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.

BANKING

The bank information of SC is not filed in SAIC.

FINANCIALS

Balance Sheet

Unit: CNY’000	As of Dec. 31, 2011
Cash	1,260
Accounts receivable	5,940
Advances to suppliers	6,410
Other receivable	1,790
Inventory	6,310
Non-current assets within one year	0
Other current assets	0
	------------------
Current assets	21,710
Fixed assets	8,020
Construction in progress	2,170
Long-term prepaid expenses	0
Deferred income tax assets	0
Other non-current assets	28,240
	------------------
Total assets	60,140
	=============
Short-term loans	0
Notes payable	0
Accounts payable	7,560
Advances from clients	0
Other payable	16,090
Other current liabilities	6,110
	------------------
Current liabilities	29,760
Non-current liabilities	24,420
	------------------
Total liabilities	54,180
Equities	5,960
	------------------
Total liabilities & equities	60,140
	=============

Income Statement

Unit: CNY’000	As of Dec. 31, 2011
Revenue	26,360
Cost of sales	21,740
Sales expense	840
Management expense	4,820
Finance expense	-10
Profit before tax	320
Less: profit tax	80
Profits	240

Important Ratios

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

	As of Dec. 31, 2011
*Current ratio	0.73
*Quick ratio	0.52
*Liabilities to assets	0.90
*Net profit margin (%)	0.91
*Return on total assets (%)	0.40
*Inventory / Revenue ×365	88 days
*Accounts receivable/ Revenue ×365	83 days
* Revenue/Total assets	0.44
* Cost of sales / Revenue	0.82

FINANCIAL COMMENTS

PROFITABILITY: AVERAGE

l The revenue of SC appears average in its line.

l SC’s net profit margin is average.

l SC’s return on total assets is average.

l SC’s cost of sales is average, comparing with its revenue.

LIQUIDITY: FAIR

l The current ratio of SC is maintained in a fair level.

l SC’s quick ratio is maintained in a fair level.

l The inventory of SC appears fairly large.

l The accounts receivable of SC appears fairly large.

l SC has no short-term loans in 2011.

l SC’s revenue is in a fair level, comparing with the size of its total assets.

LEVERAGE: FAIR

l The debt ratio of SC is high.

l The risk for SC to go bankrupt is above average.

Overall financial condition of the SC: Fair.

CONCLUSIONS

SC is considered medium-sized in its line with fair financial conditions. The fairly large amount of inventory and accounts receivable may be a threat to SC’s financial condition. A credit line up to USD 20,000 is recommended upon a periodical review basis.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.51.28
UK Pound	1	Rs.81.38
Euro	1	Rs.67.01

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.