MIRA INFORM REPORT

Report Date :

03.11.2012

IDENTIFICATION DETAILS

Name :	FUHE AUTOMOBILE INDUSTRIAL FITTINGS CO., LTD
Registered Office :	Daba Industrial Park, Longjiang Town, Shunde District, Foshan, Guangdong Province, 528318 Pr
Country :	China
Date of Incorporation :	08.12.2004
Com. Reg. No.:	440681400002414
Legal Form :	Chinese-Foreign Equity Joint Venture Enterprise
Line of Business :	manufacturing and selling automobile fittings
No. of Employees :	150 employees

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 :	Unknown
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

FUHE AUTOMOBILE INDUSTRIAL FITTINGS Co., Ltd.

DABA INDUSTRIAL PARK, LONGJIANG TOWN, SHUNDE DISTRICT, FOSHAN, GUANGDONG PROVINCE, 528318 PR CHINA

TEL: 86 (0) 757-23872913/23872956/23872928 FAX: 86 (0) 757-23872914

EXECUTIVE SUMMARY

INCORPORATION DATE : DEC. 8, 2004

REGISTRATION NO. : 440681400002414

REGISTERED LEGAL FORM : cHINESE-FOREIGN EQUITY JOINT VENTURE ENTERPRISE

CHIEF EXECUTIVE : Mr. CAI CHANGPING (CHAIRMAN)

STAFF STRENGTH : 150

REGISTERED CAPITAL : CNY 3,000,000

BUSINESS LINE : MANUFACTURING

TURNOVER : N/A

EQUITIES : N/A

PAYMENT : AVERAGE

MARKET CONDITION : average

FINANCIAL CONDITION : n/a

OPERATIONAL TREND : fairly steady

GENERAL REPUTATION : AVERAGE

EXCHANGE RATE : CNY 6.24= 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 Chinese-foreign equity joint venture enterprise at local Administration for industry & commerce (AIC - the official body of issuing and renewing business license) on Dec. 8, 2004.

Company Status: Chinese-foreign equity joint venture enterprise

This form of business in PR China is defined as a legal person. It is a limited co. jointly invested by one or more foreign companies and one or more PR China controlled companies within the territories of PR China according to a certain proportion of capital investment. The investing parties exercise business management, share profits and bear all risks and liabilities of the co. together. The equity joint venture law requires that foreign party contribute not less than 25% of the registered capital, with no maximum. The investing parties are free to agree on method of profit distribution and liabilities bearing according to the proportion of capital investment. Each investing parties contributes funds, tangible assets, technology & etc. The board of directors excises the high authority. The joint venture usually has a limited duration of 10 to 50 years. Enterprise with large investment, long construction periods, low investment returns, introducing of advanced technology & advanced technology products that have good competition position in international market may extend beyond the 50 years limit.

SC’s registered business scope includes manufacturing and operating automobile fittings.

SC is mainly engaged in manufacturing and selling automobile fittings.

Mr. Cai Changping is the legal representative and chairman of SC at present.

SC is known to have approx. 150 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 Foshan. SC’s management declined to release detailed information of the premise.

http://gb.fuhe-china.com/ The design is professional and the content is well organized. At present it is in Chinese, English, etc. versions.

Email: info@fuhe-china.com

Certificates:

According to SC’s website, the predecessor of SC was Guangzhou Panyu Kedi Engineering Machinery Manufacturing Co., Ltd.

MAIN SHAREHOLDERS:

Name % of Shareholding

Foshan Fuxin Auto Parts Co., Ltd. (in Chinese Pinyin) 75

Liu Ruiqing 25

Note: The nationality of the above individual shareholder is unspecified.

Foshan Fuxin Auto Parts Co., Ltd. (in Chinese Pinyin)

………………………………………………………..

Registration No.: 440681000005983

Legal representative: Cai Changping

Registered capital: CNY 4,500,000

Legal representative and chairman:

Mr. Cai Changping is currently responsible for the overall management of SC.

Working Experience(s):

At present Working in SC as legal representative and chairman;

Also working in Foshan Fuxin Auto Parts Co., Ltd. as legal representative

SC is mainly engaged in manufacturing and selling automobile fittings.

SC’s products mainly include semi-trailer axle, special vehicle axle and semi-trailer suspension system, etc.

SC sources its materials 95% from domestic market and 5% from overseas market. SC sells 20% of its products to overseas market, and 80% in domestic 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’s management declined to release its major clients and suppliers.

According to SC’s website:

Qigihar After-sales Service Station

Tel: 0452-2334059

Harbin After-sales Service Station

Tel: 0451-86600155

Baotou After-sales Service Station

Tel: 0472-7917569

Changli After-sales Service Station

Tel: 0335-5961678

Xuzhou After-sales Service Station

Tel: 0516-87217969

Tangshan After-sales Service Station

Tel: 0315-5309188

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.

SC’s management declined to release its bank details.

SC’s management declined to release any financial information.

SC is considered medium-sized in its line with 8 years development history.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.53.66
UK Pound	1	Rs.86.37
Euro	1	Rs.69.24

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.