MIRA INFORM REPORT

Report Date :

14.02.2012

IDENTIFICATION DETAILS

Name :	ADD INDUSTRIES (ZHE JIANG) CO., LTD.
Registered Office :	No. 38-88 Shuanggang Road, Chengguan, Yuhuan County, Zhejiang Province, 317600 Pr
Country :	China
Financials (as on) :	31.12.2010
Date of Incorporation :	20.08.1998
Com. Reg. No.:	331021000007607
Legal Form :	Shares Limited Company
Line of Business :	Manufacturing and selling automobile shock absorber.
No. of Employees :	1,000

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 800,000
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 – September 30, 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 and address

ADD Industries (Zhe Jiang) Co., Ltd.

NO. 38-88 SHUANGGANG ROAD, CHENGGUAN, YUHUAN COUNTY,

ZHEJIANG PROVINCE, 317600 PR CHINA

TEL: 86 (0) 576-87278888 FAX: 86 (0) 576-87278886

EXECUTIVE SUMMARY

INCORPORATION DATE : Aug. 20, 1998

REGISTRATION NO. : 331021000007607

REGISTERED LEGAL FORM : SHARES LIMITED company

CHIEF EXECUTIVE : MR. ZHeNG NIANHUI (CHAIRMAN)

STAFF STRENGTH : 1,000

REGISTERED CAPITAL : CNY 80,000,000

BUSINESS LINE : manufacturing

TURNOVER : CNY 374,480,000 (AS OF DEC. 31, 2010)

EQUITIES : CNY 172,960,000 (AS OF DEC. 31, 2010)

PAYMENT : AVERAGE

RECOMM. CREDIT RANGE : UP TO usd 800,000 (periodical review)

MARKET CONDITION : COMPETITIVE

FINANCIAL CONDITION : fairly STABLE

OPERATIONAL TREND : STEADY

GENERAL REPUTATION : AVERAGE

EXCHANGE RATE : CNY 6.29 = 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

Note: SC is also known as Add Industry (Zhe Jiang) Co., Ltd.

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 Aug. 20, 1998 and has been under present legal form since 2011.

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 auto parts, textiles, plastic products, handicrafts, plumbing pipe fittings, valves manufacturing; operating the enterprise self-produced products and technology export business; operation of the production, scientific research required for the raw and auxiliary materials, mechanical equipment, instrumentation, spare parts and technology import business.

SC is mainly engaged in manufacturing and selling automobile shock absorber.

Mr. Zheng Nianhui has been chairman of SC since 2010.

SC is known to have approx. 1,000 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 Yuhuan County. Our checks reveal that SC owns the total premise about 26,600 square meters.

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

E-Mail: add@addchina.com

Changes of its registered information are as follows:

Date	Item	Before the change	After the change
2000-6	Registered capital	CNY 1,080,000	CNY 2,080,000
	Company Name	Yuhuan County ADD Automotive Parts Industry Co., Ltd.	Yuhuan ADD Industry Co., Ltd.
2003-12	Registered capital	CNY 2,080,000	CNY 25,500,000
2004-2	Company Name	Yuhuan ADD Industry Co., Ltd.	Add Industry (Zhe Jiang) Co., Ltd.
2007-9	Registered capital	CNY 25,500,000	CNY 29,580,000
	Registered number	3310211000849	331021000007607
2010-10	Legal rep.	Zheng Liansong	Zheng Nianhui
2011-9	Registered capital	CNY 29,580,000	CNY 31,800,000
2011-10	Registered capital	CNY 31,800,000	CNY 80,000,000
	Chinese Name	浙江正裕工业有限公司	Present one
	Legal form	Limited liabilities company	Present one

Note: SC changed its Chinese name in 2011, while its English name remains the same.

Tax registration certificate no.: 331021148402719

Organization code certificate no.: 14840271-9

MAIN SHAREHOLDERS:

Name % of Shareholding

Zhejiang ADD Investment Co., Ltd. 62.8931

Zhejiang Yuanhao Investment Co., Ltd. 5.9811

Chen Zhi’e 1.0000

Zheng Liansong 10.5440

Zheng Lianping 9.7909

Zheng Nianhui 9.7909

l Chairman and General Manager:

Mr. Zheng Nianhui , ID# 332627196411041359, born in 1964, with university education. He is currently responsible for the overall management of SC.

Working Experience(s):

From 2010 to present Working in SC as chairman and general manager.

Directors:

=======

Chen Zhi’e

Zheng Lianping

Xiang Guopeng

Etc.

Supervisors:

=========

Qian Chengyong

Xie Wenbiao

SC is mainly engaged in manufacturing and selling automobile shock absorber.

SC’s products mainly include: automobile shock absorber.

SC sources its materials 80% from domestic market and 20% from the overseas market, mainly Europe. SC sells 70% of its products in domestic market, and 30% to overseas market, mainly USA, Europe and Southeast Asian market.

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.

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

Zhejiang Jiayu Industrial Co., Ltd.

Shanghai Foreign Trade Department

Tel: 021-52133588

Fax: 021-62723079

SC is known to invest in the following companies:

Rongji Industry (Taizhou) Co., Ltd.

Ningbo Hongyu Industry Co., Ltd.

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.

Bank of China Yuhuan Sub-branch

AC#：840011163308091001

Relationship: Normal.

Balance Sheet

Unit: CNY’000	as of Dec. 31, 2009	as of Dec. 31, 2010
Cash & bank	122,520	106,610
Inventory	32,660	33,580
Accounts receivable	68,470	88,050
Other Accounts receivable	148,410	19,460
Advances to suppliers	39,720	3,180
Other current assets	430	460
	------------------	------------------
Current assets	412,210	251,340
Fixed assets net value	118,270	174,860
Projects under construction	12,180	2,510
Long term investment	2,800	2,800
Other assets	30,990	30,300
	------------------	------------------
Total assets	576,450	461,810
	=============	=============
Short loans	149,730	109,520
Bills payable	23,520	44,250
Accounts payable	94,040	73,640
Other Accounts payable	5,740	18,810
Advances from clients	12,970	18,720
Tax payable	2,990	11,480
Other current liabilities	6,600	7,030
	------------------	------------------
Current liabilities	295,590	283,450
Long term liabilities	6,750	5,400
	------------------	------------------
Total liabilities	302,340	288,850
Equities	274,110	172,960
	------------------	------------------
Total liabilities & equities	576,450	461,810
	=============	=============

Income Statement

Unit: CNY’000	as of Dec. 31, 2009	as of Dec. 31, 2010
Turnover	289,810	374,480
Cost of goods sold	209,230	263,510
Sales expense	7,660	8,800
Management expense	28,380	34,030
Finance expense	3,980	3,970
Investment income	50	3,910
Profit before tax	30,210	64,520
Less: profit tax	5,000	14,060
Profits	25,210	50,460

Important Ratios

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

	As of Dec. 31, 2009	As of Dec. 31, 2010
*Current ratio	1.39	0.89
*Quick ratio	1.28	0.77
*Liabilities to assets	0.52	0.63
*Net profit margin (%)	8.70	13.47
*Return on total assets (%)	4.37	10.93
*Inventory /Turnover ×365	41 days	33 days
*Accounts receivable/Turnover ×365	86 days	86 days
*Turnover/Total assets	0.50	0.81
* Cost of goods sold/Turnover	0.72	0.70

PROFITABILITY: FAIRLY GOOD

l The turnover of SC appears fairly good, and it was rising in 2010.

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

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

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

LIQUIDITY: FAIR

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

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

l The inventory of SC is average in both years.

l The accounts receivable of SC is average in both years.

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

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

LEVERAGE: AVERAGE

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

l The risk for SC to go bankrupt is average.

Overall financial condition of the SC: Fairly Stable.

SC is considered medium-sized in its line with fairly stable financial conditions. The large amount of short loans could be a threat to SC’s financial condition. A credit line up to USD 800,000 would appear to be within SC’s capacities upon a periodical review basis.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.49.32
UK Pound	1	Rs.77.84
Euro	1	Rs.65.35

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.