MIRA INFORM REPORT

Report Date :

05.12.2012

IDENTIFICATION DETAILS

Name :	Zhejiang Tongxiang Foreign Trade (Group) Co Ltd
Registered Office :	16/F, Foreign Trade Building, Jiafeng Yinzuo, No. 21 Jingya Road, Tongxiang, Zhejiang Province, 314500 Pr
Country :	China
Financials (as on) :	31.12.2011
Date of Incorporation :	23.03.1998
Com. Reg. No.:	330000000031544
Legal Form :	Shares Limited Company
Line of Business :	International Trade
No. of Employees :	143 employees

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

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^th, 2012

Country Name	Previous Rating (31.03.2012)	Current Rating (30.06.2012)
China	A2	A2

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

china - ECONOMIC OVERVIEW

Since the late 1970s China has moved from a closed, centrally planned system to a more market-oriented one that plays a major global role - in 2010 China became the world's largest exporter. Reforms began with the phasing out of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, creation of a diversified banking system, development of stock markets, rapid growth of the private sector, and opening to foreign trade and investment. China has implemented reforms in a gradualist fashion. In recent years, China has renewed its support for state-owned enterprises in sectors it considers important to "economic security," explicitly looking to foster globally competitive national champions. After keeping its currency tightly linked to the US dollar for years, in July 2005 China revalued its currency by 2.1% against the US dollar and moved to an exchange rate system that references a basket of currencies. From mid 2005 to late 2008 cumulative appreciation of the renminbi against the US dollar was more than 20%, but the exchange rate remained virtually pegged to the dollar from the onset of the global financial crisis until June 2010, when Beijing allowed resumption of a gradual appreciation. The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, China in 2010 stood as the second-largest economy in the world after the US, having surpassed Japan in 2001. The dollar values of China's agricultural and industrial output each exceed those of the US; China is second to the US in the value of services it produces. Still, per capita income is below the world average. The Chinese government faces numerous economic challenges, including: (a) reducing its high domestic savings rate and correspondingly low domestic demand; (b) sustaining adequate job growth for tens of millions of migrants and new entrants to the work force; (c) reducing corruption and other economic crimes; and (d) containing environmental damage and social strife related to the economy's rapid transformation. Economic development has progressed further in coastal provinces than in the interior, and by 2011 more than 250 million migrant workers and their dependents had relocated to urban areas to find work. One consequence of population control policy is that China is now one of the most rapidly aging countries in the world. Deterioration in the environment - notably air pollution, soil erosion, and the steady fall of the water table, especially in the North - is another long-term problem. China continues to lose arable land because of erosion and economic development. The Chinese government is seeking to add energy production capacity from sources other than coal and oil, focusing on nuclear and alternative energy development. In 2010-11, China faced high inflation resulting largely from its credit-fueled stimulus program. Some tightening measures appear to have controlled inflation, but GDP growth consequently slowed to near 9% for 2011. An economic slowdown in Europe is expected to further drag Chinese growth in 2012. Debt overhang from the stimulus program, particularly among local governments, and a property price bubble challenge policy makers currently. The government's 12th Five-Year Plan, adopted in March 2011, emphasizes continued economic reforms and the need to increase domestic consumption in order to make the economy less dependent on exports in the future. However, China has made only marginal progress toward these rebalancing goals.

Source : CIA

Company name & address

ZHEJIANG TONGXIANG FOREIGN TRADE (GROUP) CO., LTD.

16/F, foreign trade building, JIAFENG YINZUO, NO. 21 JINGYA ROAD, TONGXIANG, zhejiang province, 314500 PR CHINA

TEL: 86 (0) 573-88023015/88021409 FAX: 86 (0) 573-88023917

EXECUTIVE SUMMARY

INCORPORATION DATE : MAR. 23, 1998

REGISTRATION NO. : 330000000031544

REGISTERED LEGAL FORM : SHARES LIMITED CO.

CHIEF EXECUTIVE : MR. QIAN SONGKUN (CHAIRMAN)

STAFF STRENGTH : 143

REGISTERED CAPITAL : CNY 46,000,000

BUSINESS LINE : INTERNATIONAL TRADE

TURNOVER : CNY 527,240,000 (AS OF DEC. 31, 2011)

EQUITIES : CNY 98,990,000 (AS OF DEC. 31, 2011)

PAYMENT : AVERAGE

MARKET CONDITION : COMPETITIVE

FINANCIAL CONDITION : STABLE

OPERATIONAL TREND : STEADY

GENERAL REPUTATION : AVERAGE

EXCHANGE RATE : CNY 6.23 =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 Renminbi

SC was registered as a shares limited company at local Administration for Industry & Commerce (AIC - The official body of issuing and renewing business license) on Mar. 23, 1998.

Company Status: Shares limited co.

This form of business in PR China is defined as a legal person. Its registered capital is divided into shares of equal par value and the co. raises capital by issuing share certificates by promotion or by public offer. Shareholders bear limited liability to the extent of shareholding, and the co. is liable for its debts only to the extent of its total assets. The co has independent property of legal person and enjoys property rights of legal person. The characteristics of the shares limited co. are as follows:

The establishment of the co. requires at least two promoters and no more than 200, half of whom shall be domiciled in China. Natural person are allowed to serve as promoters.

The minimum registered capital of a co. is CNY 5M. while that of the co. with foreign investment is CNY 5M. The total capital of a co. which propose to apply for publicly listed must be no less than CNY 30M.

The board of directors must consist of five to nineteen directors.

If the co. raises capital by public offer, the promoters must not subscribe less than 35% of the total shares. the promoters’ shares are restricted to transfer- within one year of the offer.

A state-owned enterprise that is restructured into a shares limited co. must comply with the conditions & requirements specified under the law & administrative rule.

SC’s registered business scope includes importing and exporting goods (See the People's Republic of China Import and Export Enterprise Qualification Certificate).

SC is mainly engaged in international trade.

Mr. Qian Songkun has been legal representative and chairman of SC since 2004.

SC is known to have approx. 143 employees at present.

SC is currently operating at the above stated address, and this address houses its operating office in the commercial zone of Tongxiang. Our checks reveal that SC owns the total premise about 10,000 square meters.

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

E-Mail: admin@zjtxft.com.cn

Changes of its registered information:

Date of change	Item	Before the change	After the change
2004-7-6	Legal Representative	Zhang Minzhi	Qian Songkun
2006-9-5	Registered Capital	CNY 10,000,000	CNY 46,000,000
2008-10-6	Registration number	3300001001471	Present one

MAIN SHAREHOLDERS:

Name % of Shareholding

Qian Songkun 30.00

Wu Hua 14.54

Qian Mingguan 13.37

Chai Yuhong 5.35

Tao Jianping 4.46

Tang Xiaoyan 0.89

Zhu Yifan 0.45

Ding Yinqi 0.40

Shou Menghui 0.40

Hu Weifeng 0.40

Zhou Yingying 0.40

Weng Yan 0.40

Zhu Yeqing 0.40

Other 18 individuals 28.54

Legal Representative and Chairman:

Mr. Qian Songkun , born in 1956, with university education. He is currently responsible for the overall management of SC.

Working Experience(s):

From 2004 to present Working in SC as legal representative and chairman;

Also working in Jiaxing Jiahua Imp. & Exp. Co., Ltd. as legal representative.

General manager:

Ms. Tang Xiaoyan, born in 1971, with university education. She is currently responsible for the daily management of SC.

Working Experience(s):

From 2003 to present Working in SC as general manager.

Directors:

Mao Yuexin

Chai Yuhong

Jin Yunjiang

Qian Mingguan

Tao Jianping

Wu Hua

Supervisors:

Zhu Yifan

Zheng Ran 郑

Zhu Jufang

SC is mainly engaged in international trade.

SC’s main products include: garments, textiles, chemical, leather & fur products and farm products.

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

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

*Major Supplier:

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

Tongxiang Jiayu Fashion Co., Ltd.

Note: SC’s management declined to release its main clients.

Jiaxing Jiahua Imp. & Exp. Co., Ltd.

Registered no.: 330483000033258

Legal representative: Qian Songkun

Nantong Qihe Chemical Co., Ltd.

Zhejiang Huarui Haiyue Optoelectronic Industry Venture Investment Co., Ltd.

Registered no.: 330681000067272

Legal representative: Lv Xiaokui

Zhejiang Tongxiang Foreign Trade (Group) Co., Ltd. Jiaxing Office

Registered no.: 3304002122252

Principal: Wu Xiaojie

Etc.

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’s supplier 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.

Bank of China Jiaxing Tongxiang Sub-branch

AC#353258337688

Relationship: Normal

Balance Sheet

Unit: CNY’000

	As of Dec. 31, 2010
Cash & bank	43,580
Inventory	18,740
Accounts receivable	49,910
Advances to suppliers	22,080
Other receivables	6,050
Other current assets	15,680
	------------------
Current assets	156,040
Fixed assets net value	28,870
Projects under construction	0
Long term investment	46,850
Other assets	1,750
	------------------
Total assets	233,510
	=============
Short loans	25,360
Accounts payable	60,850
Advances from clients	9,980
Taxes payable	470
Salaries payable	0
Other payable	70,600
Other current liabilities	970
	------------------
Current liabilities	168,230
Long term liabilities	0
	------------------
Total liabilities	168,230
Equities	65,280
	------------------
Total liabilities & equities	233,510
	=============

Income Statement

Unit: CNY’000

	As of Dec. 31, 2010
Turnover	533,640
Cost of goods sold	501,540
Sales expense	9,970
Management expense	18,450
Finance expense	150
Profit before tax	5,530
Less: profit tax	1,120
Profits	4,410

Financial Summary

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

Unit: CNY’000

	As of Dec. 31, 2011
Total liabilities	87,560
Equities	98,990
	--------------
Total liabilities & equities	186,550
	=========
Turnover	527,240
Profit before tax	/
Less: profit tax	/
Profits	6,890

Note: We did not find SC’s detailed financial reports for Yr2011.

Important Ratios

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

	as of Dec. 31, 2010	as of Dec. 31, 2011
*Current ratio	0.93	/
*Quick ratio	0.82	/
*Liabilities to assets	0.72	0.47
*Net profit margin (%)	0.83	1.31
*Return on total assets (%)	1.89	3.69
*Inventory /Turnover ×365	13 days	/
*Accounts receivable/Turnover ×365	34 days	/
*Turnover/Total assets	2.29	2.83
* Cost of goods sold/Turnover	0.94	/

PROFITABILITY: AVERAGE

l The turnover of SC appears fairly good in both years.

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

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

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

LIQUIDITY: AVERAGE

l The current ratio of SC is maintained in a fair level in 2010.

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

l The inventory of SC is maintained in an average level in 2010.

l The accounts receivable of SC is maintained in an average level in 2010.

l The short loans of SC are average in 2010.

l SC’s turnover is in an average 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 average.

Overall financial condition of the SC: Stable.

SC is considered medium-sized in its line with stable financial conditions.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.54.95
UK Pound	1	Rs.88.42
Euro	1	Rs.71.71

INFORMATION DETAILS

Report Prepared by :

MNL

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.