MIRA INFORM REPORT

Report Date :

23.05.2012

IDENTIFICATION DETAILS

Name :	SAINT-GOBAIN CERAMIC MATERIALS (LIANYUNGANG) CO., LTD
Registered Office :	No. 19, Jingliu Road, Development Zone, Lianyungang, Jiangsu Province 222043 Pr
Country :	China
Financials (as on) :	31.12.2010
Date of Incorporation :	24.08.1995
Com. Reg. No.:	320700400000904
Legal Form :	Wholly Foreign-Owned Enterprise
Line of Business :	manufacturing and selling silicon carbide and other powder sand products
No. of Employees :	09

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

SAINT-GOBAIN CERAMIC MATERIALS (LIANYUNGANG) CO., LTD.

NO. 19, JINGLIU ROAD, DEVELOPMENT ZONE, LIANYUNGANG,

JIANGSU PROVINCE 222043 PR CHINA

TEL: 86 (0) 518-82800110 FAX: 86 (0) 518-82801688

EXECUTIVE SUMMARY

INCORPORATION DATE : AUG. 24, 1995

REGISTRATION NO. : 320700400000904

REGISTERED LEGAL FORM : Wholly foreign-owned enterprise

CHIEF EXECUTIVE : MR. Emmanuel NORMANT (LEGAL REPRESENTATIVE)

STAFF STRENGTH : 9

REGISTERED CAPITAL : USD 3,110,000

BUSINESS LINE : MANUFACTURING

TURNOVER : CNY 20,080,000 (AS OF DEC. 31, 2010)

EQUITIES : CNY 35,220,000 (AS OF DEC. 31, 2010)

PAYMENT : AVERAGE

MARKET CONDITION : AVERAGE

FINANCIAL CONDITION : FAIR

OPERATIONAL TREND : FAIRLY STEADY

GENERAL REPUTATION : AVERAGE

EXCHANGE RATE : CNY 6.30=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 Ren Min Bi

Note: The given address “P.O. BOX 139, Lianyungang 222043 Jiangsu China” is SC’s post box address. The given phone number is wrong, SC’s correct phone number should be the heading one.

SC was registered as a wholly foreign-owned enterprise at local Administration for Industry & Commerce (AIC-The official body of issuing and renewing business license) on Aug. 24, 1995.

Company Status: 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.

SC’s registered business scope includes manufacturing and selling silicon carbide, corundum and other powder sand products applied in abrasive and refractory materials; wholesaling self-made products; commission agent (excluding auction), import and export business; other supporting service.

SC is mainly engaged in manufacturing and selling silicon carbide and other powder sand products.

Mr. Emmanuel Normant is chairman & legal representative of SC at present.

SC is known to have approx. 9 employees at present.

SC is currently operating at the above stated address, and this address houses its operating office and factory in the development zone of Lianyungang. Our checks reveal that SC owns the total premise, but SC’s accountant refused to release the gross area.

SC is not known to have website of its own at present.

No significant events or changes were found during our checks with local AIC.

MAIN SHAREHOLDERS:

Name % of shareholdings

(France) Saint-Gobain (China) Investment Co., Ltd. 50

(Norway) Saint Gobain Ceramic Materials AS 50

Saint-Gobain (China) Investment Co., Ltd.

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

Web: http://www.saint-gobain.com.cn/

(Norway) Saint Gobain Ceramic Materials AS

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

Registration no.: 914810574

Legal form: Limited liability company

Chairman & Legal Representative:

Mr. Emmanuel Normant, #: 08AX72929, French, born in 1971 with university education. He is currently responsible for the overall management of SC.

Working Experience(s):

At present Working in SC as chairman & legal representative.

General Manager:

Ms. Tien Ep Sun Lucia Chiu-Yun, #: 04AE67828, French, with university education. She is currently responsible for the daily management of SC.

Working Experience(s):

At present Working in SC as general manager.

Directors:

· Patrick Millot, #: 05HH02309

Stephane Heraud, #: 05AE39944

Guido Mueller, #: 2038069264

SC is mainly engaged in manufacturing and selling silicon carbide and other powder sand products.

SC’s products mainly include silicon carbide, micro powder products, etc.

SC sources its materials 10% from domestic market and 90% from overseas market. SC sells 5% in domestic market and 95% to overseas market.

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

Note: SC refused to release its main customers and suppliers

According to http://www.saint-gobain.com.cn/:

Saint-Gobain Abrasives (Suzhou) Co., Ltd.

Saint-Gobain (Xuzhou) Pipe Co., Ltd.

Saint-Gobain Gypsum (Changzhou) Co., Ltd.

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 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.

Industrial and Commercial Bank of China

AC#: 1107040009000008308

Relationship: Normal.

Balance Sheet

Unit: CNY’000

	As of Dec. 31, 2009	As of Dec. 31, 2010
Cash & bank	560	130
Short-term investments	24,330	28,760
Inventory	14,460	4,230
Accounts receivable	5,260	1,410
Advances to suppliers	80	60
Other accounts receivable	980	960
To be apportioned expense	910	0
Prepaid expenses	0	220
Other current assets	20	0
	------------------	------------------
Current assets	46,600	35,770
Fixed assets net value	5,710	4,810
Project under construction	0	120
Long term investment	0	0
Intangible and other assets	2,060	1,720
	------------------	------------------
Total assets	54,370	42,420
	=============	=============
Short loans	2,130	0
Notes payable	0	0
Accounts payable	8,580	2,510
Advances from clients	0	0
Accrued payroll	0	30
Taxes payable	170	-10
Surcharge payable	0	0
Withdraw the expenses in advance	690	0
Accrued expenses	0	420
Other accounts payable	6,400	4,250
Other current liabilities	10	0
	------------------	------------------
Current liabilities	17,980	7,200
Long-term liabilities	0	0
	------------------	------------------
Total liabilities	17,980	7,200
Equities	36,390	35,220
	------------------	------------------
Total liabilities & equities	54,370	42,420
	=============	=============

Income Statement

Unit: CNY’000

	As of Dec. 31, 2009	As of Dec. 31, 2010
Turnover	14,960	20,080
Cost of goods sold	13,520	19,440
Taxes and additional of main operations	0	-20
Sales expense	640	1,890
Management expense	950	1,160
Finance expense	560	20
Income from other operations	10	10
Investment income	470	750
Subsidize income	80	30
Non-operating income	20	0
Non-operating expense	40	0
Profit before tax	-170	-1,620
Less: profit tax	700	0
Profits	-870	-1,620

Important Ratios

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

	As of Dec. 31, 2009	As of Dec. 31, 2010
*Current ratio	2.59	4.97
*Quick ratio	1.79	4.38
*Liabilities to assets	0.33	0.17
*Net profit margin (%)	-5.82	-8.07
*Return on total assets (%)	-1.60	-3.82
*Inventory /Turnover ×365	353 days	77 days
*Accounts receivable/Turnover ×365	128 days	26 days
*Turnover/Total assets	0.28	0.47
* Cost of goods sold/Turnover	0.90	0.97

PROFITABILITY: FAIR

l The turnover of SC appears average in both years, and it increased in 2010.

l SC’s net profit margin appears fair in both years.

l SC’s return on total assets appears fair in both years.

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

LIQUIDITY: AVERAGE

l The current ratio of SC is maintained in a fairly good level in both years.

l SC’s quick ratio is maintained in a fairly good level in both years.

l The inventory of SC appears fairly large in 2009, and average in 2010.

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

l SC has no short-term loan in 2010.

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

LEVERAGE: AVERAGE

l The debt ratio of SC is low.

l The risk for SC to go bankrupt is average.

Overall financial condition of the SC: Fair

SC is considered small-sized in its line with fair financial conditions.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.54.88
UK Pound	1	Rs.86.84
Euro	1	Rs.70.21

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.