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MIRA INFORM REPORT

Report Date :

16.02.2012

IDENTIFICATION DETAILS

Name :	SHANGHAI METAL CORPORATION
Registered Office :	RM501, Building 7, No.2899 Chuan Nan Feng Road, Airport Town, Pudong New District, Shanghai City
Country :	China
Financials (as on) :	31.12.2010
Date of Incorporation :	17.07.2003
Com. Reg. No.:	310115000769358
Legal Form :	Limited Liabilities Company
Line of Business :	Processing and sales of metal
No. of Employees :	20

RATING & COMMENTS

MIRA’s Rating :

B

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

Maximum Credit Limit :	750,000.00
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 – 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

SHANGHAI METAL CORPORATION
RM1701 Yu’an Mansion, No.738 Dongfang Road, Pudong New District, Shanghai
200122
Tel :	86 21 58316326
Fax:	86 21 50819492
E-mail:	--
Website:	www.shanghaimetal.com
GTM Reference No.	G120210128

Currency in this report is Chinese Yuan unless otherwise stated.

Exchange Rate: 1 USD=6.38 Chinese Yuan

"--"in this report indicates "unavailable" due to insufficient information or "no comments"

EXECUTIVE SUMMARY

DATE OF establishment	june.17^th, 2003
Aic Registration No.	310115000769358
REGISTERED LEGAL FORM	limited liabilities company
REGISTERED CAPITAL	10,000,000.00
main BUSINESS	metal processing and sales
SIC Code (China)	3351 processing of common non-ferrous metal
employees	20
import and export permits	yes
business scale	Large
operation trend	Good
TURNOVER	147,945,000.00 (As of Dec.31^st, 2010)
net profit	1,953,000.00 (As of Dec.31^st, 2010)
total assets	9,043,000.00 (As of Dec.31^st, 2010)
net worth	5,233,000.00 (As of Dec.31^st, 2010)
base Credie limit	750,000.00
EXCHANGE RATE	1 Usd=6.30CNY (feb.15^th, 2012)

REGISTRATION

Name	SHANGHAIMETAL CORPORATION
AIC Registration Number	310115000769358
Registered address	RM501, Building 7, No.2899 Chuan Nan Feng Road, Airport Town, Pudong New District, Shanghai City
Operation address	RM1701 Yu’an Mansion, No.738 Dongfang Road, Pudong New District, Shanghai
Date of Establishment	June.17^th, 2003
Registry	Administration Bureau of Industry and Commerce – Pudong New District, Shanghai
Legal Representative	Wang Buguo
Registered Legal Form	limited liabilities company
Registered Capital	10,000,000.00
Operating Duration	From June.17^th, 2003 to June.16^th, 2023
Changes in Registration	1. Oct.18^h, 2009 Subject company's shareholders were changed from Wang Buguo and Wang Bin to the present shareholder. 2. June.30^th, 2011 Subject’s registered capital was increased from 1,000,000 to 10,000,000 CNY. 3. Subject holds a previous registration No. of 3101152013118.

Limited liabilities co.

This form of business in PR China is defined as a legal person. Its registered capital is contributed jointly by at least two shareholders and no more than fifty. 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 listed as follows:

-manufacturing co. : RMB 500,000.00

-trading &wholesaling co. : RMB 500,000.00

-retailing co. : RMB 300,000.00

-consultancy & service co. : RMB 100,000.00

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 50% of the registered capital while contribution by intangible assets must not exceed 20% 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.

REGISTRATION INFO: AVAILABLE

FINANCIAL REPORTS: AVAILABLE

SHAREHOLDERS AND SHARES

As indicated in the following table:

Shareholder	Capital Subscribed	Percentage
Wang Buguo	10,000,000.00	100%
Total	10,000,000.00	100%

Shareholder	Way of Investment	Paid-up Percentage
Wang Buguo	Capital	100%

Background of major shareholder

Name	Wang Buguo
Gender	Male
Date of birth	Nov.11^th, 1968
National ID No.	320602681111107

AFFILIATE(S)

No affiliate of subject is found after checking.

MANAGEMENT

Name	Wang Buguo
Gender	Male
Title	Executive director; manager
Date of birth	Nov.11^th, 1968
National ID No.	320602681111107

BANKERS INFORMATION

Bank name	Bank of China – Pudong Branch (Shanghai)
Account No. (CNY)	044188805011257208091001
Source of information	Government

OFFICE FACILITIES

Geographic Location	RM1701 Yu’an Mansion, No.738 Dongfang Road, Pudong New District, Shanghai
Area	500 square meters
Environment and traffic	Acceptable
Property Ownership	Rented
Factory address	Xinghua, Taizhou City, Jiangsu Province (detailed address was refused to disclose)

TRADEMARKS & PATENTS

After checking with the Trademark Office of Chinese Administration Bureau of Industry and Commerce and the State Intellectual Office, no trademarks or patents of SC were found.

MAIN PRODUCTS & SERVICES

Main business	Processing and sales of metal
Products and services	Subject’s products include strip steel, high precision copper belt, copper rod, copper pipes, aluminum pipes, aluminum sheets etc. In addition, subject also agents steel products of other domestic enterprises and CNC bending machines, tube end-forming machines etc. imported from Japan.
Annual production capacity	--
Certificates	ISO 9001; ISO 9002

SALES INFORMATION

Local sales	10%
Regions	All over China
Major domestic clients	--
Payment terms	Prompt payment; on credit
Export	90%
Regions	Europe, USA, Asia
Major overseas clients	Philips Company; Toshiba Corporation; ALSTOM LTD (France), etc.
Payment terms	L/C, T/T
SC’s products are mostly exported. With years of history, its customer network is good.
The above information was confirmed by SC’s employee on Feb.14^th, 2012.

PURCHASE INFORMATION

Main Commodities Purchased	Copper, aluminum, strip steel, steel sheets
Region	Local: 80% Import: 20%
Number of Major Suppliers	More than 5
Major suppliers	SHANGHAI YUKUN MATERIALS CO., LTD
Main Terms of Payment	Local: Prompt payment; on credit Import: L/C, T/T
SC’s raw materials and equipments are mainly purchased within China. The equipments it agents are imported.
The above information was confirmed by SC’s employee on Feb.14^th, 2012.

CREDIT RECORDS

Name of supplier	SHANGHAI YUKUN MATERIALS CO., LTD.
Main commodities and service supplied	Steel sheets
Title of interviewee	Sales staff
Telephone of Interviewee	86 13816858136
Cooperation	Confirmed
Payment comment	Acceptable
Date of interview	Feb.14^th, 2012

LITIGATION RECORDS

After checking with China Court organization, the local court website and other major searching websites, no litigation record related to subject company in the latest three years is found.

FINANCE

Balance Sheet (Unit: 1,000 Chinese Yuan):

	Dec. 31^st, 2008	Dec. 31^st, 2009	Dec. 31^st, 2010
Current assets
Money capital	5,194	3,683	2,627
Short-term investment
Notes receivable
Net ball of Account Receivable		8,279	745
Payment in advance	1,154	13,812
Subsidy Receivable
Other Account Receivable		51	51
Inventory	560	201	1,242
Expenses to be deferred
Net loss of current assets to be settled	7	10
Other current assets	659	2,670	2,417
Export rebates receivable
Total current Assets	7,574	28,706	7,082
Long-term investment
Long-term investment
Original value of fixed assets	1,157	1,258	2,995
Accumulated depreciation	471	696	1,102
Net fixed assets	686	562	1893
Fixed assets depreciation reserve
Net Value of Fixed Assets	686	562	1,893
Fixed assets in liquidation
Projects being constructed
Fixed assets losses in suspense
Total fixed assets	686	562	1,893
Intangible assets and deferred assets
Intangible assets	89	78	68
Deferred assets
Total intangible and deferred assets	89	78	68
Other long-term assets
Other long-term assets
Total assets	8,349	29,346	9,043
Current liabilities
Short-term loans	1,615	1,419	3,300
Notes payable
Account payable		9,665	-1,138
Deposit received	3,790	9,613
Other accounts payable	203	5,068	1,500
Wages payable
Welfare payable
Tax unpaid	320	156	148
Unpaid profit
Accrued expenses
L/T debt due in 1 year
Other current liabilities	27	15
Total current liabilities	5,955	25,936	3,810
L/T liabilities
L/T loans
Bonds payable
L/T account payable
Total L/T liabilities	0	0	0
Deferred tax
Deferred tax
Total liabilities	5,955	25,936	3,810
Owner’s interest
Paid-up capital	1,000	1,000	1,000
Contributed surplus
Surplus reserves
Unconfirmed investment loss
Undistributed profits	1,394	2,410	4,233
Minority interest
Total owner’s interest	2,394	3,410	5,233
Liabilities and owner’s interest	8,349	29,346	9,043

Income Statement (Unit: 1,000 Chinese Yuan):

	Dec. 31^st, 2008	Dec. 31^st, 2009	Dec. 31^st, 2010
Main business income	131,010	71,658	147,945
Main business cost	115,643	61,786	131,458
Tax and associate charge	57	18	4
Main business profit	15,310	9,854	16,483
Other business profit
Operation expenses	7,179	4,056	11,842
- management expenses	2,840	3,960	4,763
Financial expenses	4,869	173	-2,396
Operation profit	422	1,665	2,274
Investment profit
Subsidy income
Non business income	47		235
- non business expenses	2	1	5
Prior year income adjustment
Total profit	467	1,664	2,504
- income tax	84	259	551
Minority stock holder’s interest
Net profit	383	1,405	1,953

Important Ratios:

	2008	2009	2010
Return on net assets (%)	16.00	41.20	37.32
Return on total assets (%)	4.59	4.79	21.60
Net profit margin (%)	0.29	1.96	1.32
Turnover of total assets	15.69	2.44	16.36
Turnover of current assets	17.30	2.50	20.89
Turnover of account receivable		8.66	198.58
Inventory turnover	206.51	307.39	105.84
Asset liability ratio (%)	71.33	88.38	42.13
Current ratio	1.27	1.11	1.86
Quick ratio	1.18	1.10	1.53

Major Financial Information (Unit: 1,000 Chinese Yuan):

	2008	2009	2010
Main business income	131,010	71,658	147,945
Total profit	467	1,664	2,504
Net profit	383	1,405	1,953
Total assets	8,349	29,346	9,043
Total liabilities	5,955	25,936	3,810
Total owner’s interest	2,394	3,410	5,233
Source from	government	government	government
Whether audited or not	Yes	Yes	Yes

Analysis of financial indicator

Long-term solvency: good

Short-term solvency: acceptable

Asset security: acceptable

Inventory status: good

Capital turnover: good

Debt recovery status: good

Profitability: poor

Return on assets (ROA): good

Enterprise background: average

Payment records: acceptable

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.49.25
UK Pound	1	Rs.77.45
Euro	1	Rs.64.89

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.