MIRA INFORM REPORT

Report Date :

03.05.2012

IDENTIFICATION DETAILS

Name :	TCL AIR-CONDITIANER(ZHONGSHAN)CO.LTD
Registered Office :	Nantou Avenue, Nantou Town, Zhongshan City, Guangdong Province
Country :	China
Financials (as on) :	31.12.2011
Date of Incorporation :	08.11.2000
Com. Reg. No.:	442000400001678
Legal Form :	Wholly Foreign-Owned Enterprise
Line of Business :	Research, development and sales of household air conditioner
No. of Employees :	3000

RATING & COMMENTS

MIRA’s Rating :

B

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

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	A2	A2

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

Company name & address

TCL AIR-CONDITIANER(ZHONGSHAN)CO.LTD
No.59, West of Nantou Avenue, Nantou Town, Zhongshan City, Guangdong Province.
528427
Tel :	86 760 87821543
Fax:	86 760 87821726
Website:	http://kt.tcl.com/

Currency in this report is Chinese Yuan unless otherwise stated.

Exchange Rate: 1 USD=6.28 Chinese Yuan

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

Note:

Due to the recent intervention of government in the AIC systems, reports of companies in some regions could be impacted for a certain period, and for the companies registered in Guangdong, shareholder information couldn’t be obtained.

EXECUTIVE SUMMARY

DATE OF establishment	Nov 8^th, 2000
Aic Registration No.	442000400001678
REGISTERED LEGAL FORM	wholly foreign-owned enterprise
REGISTERED CAPITAL	49,849,319.00 CNY
main BUSINESS	Research, development and sales of household air conditioner.
SIC Code (China)	3952 manufacture of household air conditioner
employees	3000
import and export permits	yes
business scale	Big
operation trend	Good
TURNOVER	4,501,496.00 (As of Dec.31^st, 2011)
net profit	-17,834,000.00 (As of Dec.31^st, 2010)
total assets	2,158,140,000.00 (As of Dec.31^st, 2010)
net worth	404,030,000.00 (As of Dec.31^st, 2010)
EXCHANGE RATE	1 Usd=6.28CNY (Jan 28^th, 2012)

REGISTRATION

Name	TCL AIR-CONDITIANER(ZHONGSHAN)CO.LTD
AIC Registration Number	442000400001678
Registered address	Nantou Avenue, Nantou Town, Zhongshan City, Guangdong Province.
Operation address	No.59, West of Nantou Avenue, Nantou Town, Zhongshan City, Guangdong Province.
Date of Establishment	Nov 8^th, 2000
Registry	Administration Bureau of Industry and Commerce – Zhongshan City
Legal Representative	Chen Weidong
Registered Legal Form	WHOLLY FOREIGN-OWNED ENTERPRISE
Registered Capital	USD 49,849,319.00
Operating Duration	Nov 8^th, 2000 to Nov 7^th, 2015
Business Scope	Manufacture and sales of all kind of air-conditioners and related spare parts, electric water heaters, solar water heaters, etc; Providing service of designing, maintenance, engineering installation, etc of above products; Providing technology consultancy service.
Changes in Registration	N/A

Wholly foreign-owned enterprise

This form of business in PR China is defined as a legal person. It is a limited co. established within the territories of PR China with capital provided totally by the foreign investors. More than one foreign investor may jointly invest in a wholly foreign-owned enterprise. The investing party/parties solely exercise management, reap profit and bear risks and liabilities by themselves. This form of companies usually have a limited duration is extendible upon approval of Examination and Approval Authorities.

REGISTRATION INFO: AVAILABLE

FINANCIAL REPORTS: AVAILABLE

SHAREHOLDERS AND SHARES

N/A

AFFILIATE(S)

Name	TCL AIR-CONDITIONER (WUHAN) CO. LTD
Address	Taishang Development Zone, Wujiashan, Wuhan City, Hubei Province.
Registration No.	420112400000958
Relationship with SC	Related company.
Main business	Manufacture of airconditioner.

.

MANAGEMENT

Name	Chen Weidong
Gender	Male
Title	Legal Representative

BANKERS INFORMATION

SC’s bank information can’t be obtained after searching through all available channels.

OFFICE FACILITIES

Geographic Location	No.59, West of Nantou Avenue, Nantou Town, Zhongshan City, Guangdong Province.
Area	200,000.00 square meters
Environment and traffic	Acceptable
Property Ownership	Self-owned

TRADEMARKS

Total trademarks	7 (only the latest 3 are listed)
Registration No.	9052592
Registration date	Jan 13^th, 2011
Image
Registration No.	9052581
Registration date	Jan 13^th, 2011
Image
Registration No.	9050613
Registration date	Jan 13^th, 2011
Image

PATENTS

Total patents	284 (only the latest 3 are listed)
Application No.	201110032139.0
Application date	Jan 29^th, 2011
Patent name	A kind of air-conditioner connecting pipe and its processing method.
Application No.	201110048181.1
Application date	Mar 1^st, 2011
Patent name	A kind of pipe connecting structure.
Application No.	201110079311.8
Application date	Mar 31^st, 2011
Patent name	A kind of hot water machine.

MAIN PRODUCTS & SERVICES

Main business	Research, development, manufacture and sales of household air-conditioner.
Products and services	SC mainly deals with research, development, manufacture and sales of household air-conditioner. Its products include many kinds of air-conditioner, etc. According to SC’s staff, SC also deals with manufacture and sales of commercial air-conditioner, titanium air-conditioner, etc.
Annual production capacity	5,000,000
Certificates	ISO 9001:2000 Quality System Certification, ISO 14001 Quality System Certification, OHSAS 18001 Quality System Certification.

SALES INFORMATION

Local sales	30%
Regions	All over China
Major domestic clients	SUNING CORPORATION, etc.
Payment terms	Prompt payment; on credit
Export	70%
Regions	Hong Kong, Taiwan, South Korea, Japan, Southeast Asia, Europe, America, etc.
Major overseas clients	GOME ELECTRICAL APPLIANCES HOLDING LIMITED, etc.
Payment terms	L/C, T/T
SC’s air-conditioners are mainly sold to domestic and overseas electrical appliances supermarkets, etc. With long history, SC’s brand TCL enjoys high popularity in the local industry. It has developed wide sales network.
The above information was confirmed by SC’s employee.

PURCHASE INFORMATION

Main Commodities Purchased	Electrical machine, compression engine, plastic shell, electric wire, electronic spare parts, production equipments, etc.
Region	Local: 80% Import: 20%
Number of Major Suppliers	More than 10
Major suppliers	ZHUHAI XINSHI GAS ENGINEERING CO. LTD; GUANGZHOU HONGKE AUTOMATION ENGINEERING CO. LTD; ZHONGSHAN BROAD-OCEAN MOTOR CO. LTD; GUANGZHOU AOJIE INFORMATION TECHNOLOGY CO. LTD, TCL RUIZHI (HUIZHOU) REFRIGERATION EQUIPMENT, etc.
Main Terms of Payment	Local: Prompt payment; on credit Overseas：L/C, T/T
SC’s raw materials and production equipments are purchased both domestically and internationally. Some key spare parts are manufactured by its related company TCL RUIZHI (HUIZHOU) REFRIGERATION EQUIPMENT. It has many suppliers.
The above information was confirmed by SC’s employee

CREDIT

Name of supplier	ZHONGSHAN BROAD-OCEAN MOTOR CO. LTD
Main commodities and service supplied	Electrical machines, etc.
Title of interviewee	Sales staff.
Telephone of Interviewee	86 760 88555123
Cooperation	Confirmed
Payment comment	Good

LITIGATION RECORDS

Name of person subject to enforcement	TCL AIR-CONDITIONER (ZHONGSHAN) CO. LTD
Court	Kuerle Railway Transportation Court
File date	Feb 3^rd, 2005
File No.	(2005) Ku Zhi Zi 00010
Amount	63,319.40 CNY
Status	Closed.
Name of person subject to enforcement	TCL AIR-CONDITIONER (ZHONGSHAN) CO. LTD
Court	Zhongshan Second Intermediate People’s Court.
File date	Sep 13^th, 2011
File No.	(2011) Zhong Er Fa Zhi Zi 02895
Amount	1,329,238.83 CNY
Status	Closed.

FINANCE

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

	Dec. 31^st, 2010	Dec. 31^st, 2011
Current assets
Money capital	371,110	499,226
Short-term investment	4,377	3,840
Notes receivable	6,322	59,055
Net ball of Account Receivable	562,000	553,080
Payment in advance	5,693	18,579
Subsidy Receivable
Other Account Receivable	270,984	191,252
Inventory	241,752	655,493
Expenses to be deferred
Other current assets
Export rebates receivable
Total current Assets	1,462,238	1,980,525
Long-term investment
Long-term investment
Original value of fixed assets
Accumulated depreciation
Net fixed assets	107,095	104,529
Fixed assets depreciation reserve
Net Value of Fixed Assets	107,095	104,529
Fixed assets in liquidation		316
Projects being constructed		63,937
Fixed assets losses in suspense
Total fixed assets	107,095	168,782
Intangible assets and deferred assets
Intangible assets	9,385	8,833
Deferred assets
Total intangible and deferred assets	9,385	8,833
Other long-term assets
Other long-term assets
Total assets	1,578,718	2,158,140
Current liabilities
Short-term loans	425,486	917,861
Notes payable
Account payable	540,965	609,882
Deposit received	68,318	53,921
Other accounts payable	112,527	124,491
Wages payable	36,567	42,202
Welfare payable
Tax unpaid	-27,008	1,903
Unpaid profit
Accrued expenses
L/T debt due in 1 year
Other current liabilities
Total current liabilities	1,156,855	1,750,260
L/T liabilities
L/T loans
Accrued liabilities		3,850
Bonds payable
L/T account payable
Total L/T liabilities	0	3,850
Deferred tax
Deferred tax
Total liabilities	1,156,855	1,754,110
Owner’s interest
Paid-up capital	385,440	385,440
Contributed surplus
Surplus reserves	3,642	3,642
Unconfirmed investment loss
Undistributed profits	32,781	14,948
Minority interest
Total owner’s interest	421,863	404,030
Liabilities and owner’s interest	1,578,718	2,158,140

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

	Dec. 31^st, 2010	Dec. 31^st, 2011
Main business income	3,016,752	4,501,496
Main business cost	2,868,008	4,261,429
Tax and associate charge	0	2,123
Main business profit	148,744	237,944
Other business profit
Asset devaluation	1,189	10,987
Operation expenses	228,123	204,733
- management expenses	62,001	114,090
Financial expenses	-1,187	-2,934
Operation profit	-141,382	-88,932
Investment profit		14,906
Profit/loss from fair value change	4,377	-537
Subsidy income
Non business income	149,344	62,881
- non business expenses	458	4,052
Prior year income adjustment
Total profit	11,881	-15,734
- income tax	6,388	2,100
Minority stock holder’s interest
Net profit	5,493	-17,834

Important Ratios:

	2010	2011
Return on net assets (%)	1.30	-4.41
Return on total assets (%)	0.35	-0.83
Net profit margin (%)	0.18	-0.40
Turnover of total assets	1.91	2.09
Turnover of current assets	2.06	2.27
Turnover of account receivable	5.37	8.14
Inventory turnover	11.86	6.50
Asset liability ratio (%)	73.28	81.28
Current ratio	1.26	1.13
Quick ratio	1.06	0.76

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

	2010	2011
Main business income	3,016,752	4,501,496
Total profit	11,881	-15,734
Net profit	5,493	-17,834
Total assets	1,578,718	2,158,140
Total liabilities	1,156,855	1,754,110
Total owner’s interest	421,863	404,030
Source from	government	government
Whether audited or not	Yes	Yes

Analysis of financial indicator

Long-term solvency: poor

Short-term solvency: below average

Asset security: poor

Inventory status: average

Capital turnover: poor

Debt recovery status: average

Profitability: poor

Return on assets (ROA): poor

Enterprise background: good

Payment records: acceptable

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.52.93
UK Pound	1	Rs.85.85
Euro	1	Rs.69.94

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.