MIRA INFORM REPORT

Report Date :

16.11.2012

IDENTIFICATION DETAILS

Name :	CHANGLIN COMPANY LIMITED

Registered Office :	NO. 898, West Huanghe Road, Xinbei District, Changzhou, Jiangsu Province, 213136 PR

Country :	China

Financials (as on) :	31.12.2011

Date of Incorporation :	24.06.1996

Com. Reg. No.:	100000000019960

Legal Form :	Shares Limited Company

Line of Business :	Manufacturing and selling engineering machinery

No. of Employees :	1,537

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

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 – June 30^th, 2012

Country Name

Previous Rating

(31.03.2012)

Current Rating

(30.06.2012)

China

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 and address

CHANGLIN COMPANY LIMITED

NO. 898, WEST HUANGHE ROAD, XINBEI DISTRICT, CHANGZHOU,

JIANGSU PROVINCE, 213136 PR CHINA

TEL: 86 (0) 519-86781168/86781288 FAX: 86 (0) 519-86750025/86781387

EXECUTIVE SUMMARY

INCORPORATION DATE : JUN. 24, 1996

REGISTRATION NO. : 100000000019960

REGISTERED LEGAL FORM : SHARES LIMITED COMPANY

CHIEF EXECUTIVE : MR. WU PEIGUO (CHAIRMAN)

STAFF STRENGTH : 1,537

REGISTERED CAPITAL : CNY 640,284,000

BUSINESS LINE : MANUFACTURING

TURNOVER : CNY 1,158,285,000 (Consolidated, JAN. 1 TO SEP. 30, 2012)

EQUITIES : CNY 2,116,872,000 (Consolidated, AS OF SEP. 30, 2012)

PAYMENT : AVERAGE

MARKET CONDITION : COMPETITIVE

FINANCIAL CONDITION : FAIRLY STABLE

OPERATIONAL TREND : STEADY

GENERAL REPUTATION : AVERAGE

EXCHANGE RATE : CNY 6.2305=USD

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: SC’s correct tel. and fax no. should be the heading ones.

SC was registered as a shares limited company at State Administration for Industry & Commerce (AIC-The official body of issuing and renewing business license) on Jun. 24, 1996.

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 dispatching the labor abroad; researching, manufacturing, selling and repairing engineering, forest, mining, environmental protecting, exploiting and transportation machinery equipment and parts; import and export business.

SC is mainly engaged in manufacturing and selling engineering machinery.

Mr. Wu Peiguo has been chairman of SC since 2009.

SC is known to have approx. 1,537 employees at present, including 819 production staff, 225 sales and service staff, 152 technical staff, 25 financial staff, 132 administrative staff and 184 other-position staff.

SC is currently operating at the above stated address, and this address houses its operating office and factory in the industrial zone of Changzhou. Detailed premise information is not available at present.

http://www.changlin.com.cn The design is professional and the content is well organized. At present it is in Chinese, English and other versions.

Email: sales@changlin.com.cn

SC listed in Shanghai Stock Exchange Market in 1996 with the stock code 600710.

Changes of its registered information:

Date of change	Item	Before the change	After the change
1996	Registered capital	CNY 110,000,000	CNY 132,000,000
1997	Registered capital	CNY 132,000,000	CNY 165,000,000
2002	Registered capital	CNY 165,000,000	CNY 329,999,998
2007	Registered capital	CNY 329,999,998	CNY 374,000,000
2007	Registered capital	CNY 374,000,000	CNY 486,200,000
2011	Registered capital	CNY 486,200,000	CNY 533,570,000
Unknown	Registration no.	1000001001996	Present one
Unknown	Registered capital	CNY 533,570,000	Present amount

SC has been awarded: the honor of National Quality Excellent Management permitted by Project 863, issued by the Ministry of Science and Technology; became one of the 13 Earliest Internationalized Project Pilot Demonstration Companies; and was successfully checked and accepted by the experts of the Ministry of Science and Technology in 2005; in addition, SC is the first company which has passed the certificate of ISO 9001 and ISO 14001 in the construction machinery and construction equipment industry, etc.

国家大型企业

Tax Registration Certificate No.: 320400100019964

Organization Code: 10001996

MAIN SHAREHOLDERS: (As of Jun. 30, 2012)

Name % of shareholdings

China Sinomach Heavy Industry Corporation

China Foma (Group) Co., Ltd.

2.55

Tianjin Silicon Valley Tiantang Kunxiang Equity Investment Fund Partnership (LLP)

(In Chinese pinyin)

1.87

Tianjin Wukechuang Yinglian Equity Investment Fund Partnership (LLP) (In Chinese pinyin)

1.6

Shanghai Lili Investment Management Partnership (LLP)

0.94

Jin Mingzhe

0.94

Tianjin Trust Co., Ltd.

0.94

Zhongyuan Trust Co., Ltd.

0.82

Jiangsu Huaxicun Fine Wool Textile Co., Ltd.

0.55

Bohong Shujun (Tianjin) Equity Investment Fund Partnership (LLP) (In Chinese pinyin)

0.43

Other shareholders 59.36

China Sinomach Heavy Industry Corporation

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

China Sinomach Heavy Industry Corporation is a wholly-owned subsidiary of China National Machinery Industry Corporation (SINOMACH Group) which is listed as one of the World’s Top 500 Enterprises. Headquartered in Beijing, China, Sinomach Heavy Industry is a large manufacturer of engineering vehicle and heavy equipment products. Sinomach Heavy Industry’s primary activities consist of engineering equipment research, development, and manufacture, related customer services, and project contracting and trading.

Registration no.: 120000000009986

Registered capital: CNY 1,390,000,000

Legal representative: Wu Peiguo

Add: Huacai Building, No. 16 Guangshun North Street, Chaoyang District, Beijing

Tel: 010-57387999

Fax: 010-57387977

http://www.sinomach-hi.com/

China Foma (Group) Co., Ltd.

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

Registration no.:100000000001847

Registered capital: CNY 855,350,000

Legal representative: Liu Qun

Add: ShijiXingyuan Building, No. 20 Anyuan Road, Chaoyang District, Beijing

Tel:+86 10 84898622 84898187

Fax: +86 10 84898421

E-mail: chinafoma@chinafoma.com

http://www.chinafoma.com/

l Chairman:

Mr. Wu Peiguo, senior engineer, born in 1962 with Master’s degree. He is currently responsible for the overall management of SC.

Working Experience(s):

From 2009 to present Working in SC as chairman;

Also working in China Sinomach Heavy Industry Corporation as legal representative.

l Vice Chairman:

Mr. Cai Zhongqing, senior engineer, born in 1960 with university education. He is currently responsible for the daily management of SC.

Working Experience(s):

From 2008 to present Working in SC as vice chairman.

Also working in Changzhou Changlin Jujin Road Machinery Co., Ltd. as legal representative.

l General manager:

Mr. Chen Wei, senior engineer, born in 1966 with Master’s degree. He is currently responsible for the overall management of SC.

Working Experience(s):

From 2007 to Dec., 2011 Worked in SC as vice general manager;

At present Working in as general manager.

l Directors:

Chen Wenhua

Han Xuesong

Ning Yu

Etc.

l Supervisors:

Wu Jianping

Song Shuangxian

Bian Long

SC is mainly engaged in manufacturing and selling engineering machinery.

SC’s pharmaceutical products mainly include: wheel loader, motor grader, road roller, backhoe loader, loading crane, excavator, skid steer loader, paver, concrete truck mixer, etc.

SC sources its materials 80% from domestic market, and 20% from overseas market. SC sells 75% of its products in domestic market, and 25% to overseas market, mainly Southeast Asian countries and Europe.

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.

*Major Suppliers:

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

Changzhou Changlin Machinery Co., Ltd.

YTO (Luoyang) Diesel Engine Co., Ltd.

*Major Clients:

===========

Hyundai (Jiangsu) Construction Machinery Co., Ltd.

Komatsu (Changzhou) Construction Machinery Co., Ltd.

Yituo (Luoyang) Building Machinery Co., Ltd.

China Foma (Group) Co., Ltd.

SC is known to invest in the following companies:

Changzhou Changlin Jujin Road Machinery Co., Ltd.

Changlin (Malaysia) Construction Machinery Co., Ltd.

Changlin Construction Machinery India Pvt Ltd.

Hyundai (Jiangsu) Construction Machinery Co., Ltd.

Foma Trading 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’s suppliers declined to make any comments.

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 declined to release its bank information.

Consolidated Balance Sheet

Unit: CNY’000

	As of Sep. 30, 2012	As of Dec. 31, 2011
Cash & bank	691,731	612,441
Bills receivable	22,250	66,127
Advances to suppliers	2,771	48,780
Accounts receivable	664,354	424,727
Inventory	528,621	694,437
Other accounts receivable	7,065	3,862
Other current assets	0	163
	------------------	------------------
Current assets	1,916,792	1,850,537
Fixed assets net value	561,838	511,235
Projects materials	0	0
Projects under construction	6,332	37,730
Long term investment	638,761	635,921
Intangible assets	157,195	144,643
Deferred tax assets	7,911	8,601
Other assets	0	0
	------------------	------------------
Total assets	3,288,829	3,188,667
	=============	=============
Short loans	251,000	145,000
Bills payable	232,966	108,060
Accounts payable	453,990	569,849
Accrued payroll	12,752	18,756
Taxes payable	-2,613	-26,674
Advances from clients	25,945	34,473
Other accounts payable	62,898	62,788
Non-current liabilities due within one year	30,000	80,000
Other current liabilities	0	0
	------------------	------------------
Current liabilities	1,066,938	992,252
Long-term loans	70,000	30,000
Specified payables	34,852	70,029
Estimated liabilities	167	167
	------------------	------------------
Total liabilities	1,171,957	1,092,448
Equities	2,116,872	2,096,219
	------------------	------------------
Total liabilities & equities	3,288,829	3,188,667
	=============	=============

Consolidated Income Statement

Unit: CNY’000

	Jan. 1 to Sep. 30, 2012	As of Dec. 31, 2011
Turnover	1,158,285	2,135,426
Cost of goods sold	1,037,878	1,897,992
Taxes and additional of main operation	295	200
Sales expense	77,481	110,602
Management expense	67,176	81,826
Finance expense	4,176	8,685
Assets impairment loss	27,014	2,252
Investment income	19,117	134,918
Non-operating income	59,103	5,689
Non-operating expense	1,511	1,102
Profit before tax	20,974	173,374
Less: profit tax	787	4,928
Profits	20,187	168,446

Important Ratios

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

	As of Sep. 30, 2012	As of Dec. 31, 2011
*Current ratio	1.80	1.86
*Quick ratio	1.30	1.17
*Liabilities to assets	0.36	0.34
*Net profit margin (%)	1.74	7.89
*Return on total assets (%)	0.61	5.28
*Inventory /Turnover ×365	/	119 days
*Accounts receivable/Turnover ×365	/	73 days
*Turnover/Total assets	0.35	0.67
* Cost of goods sold/Turnover	0.90	0.89

PROFITABILITY: AVERAGE

l The turnover of SC appears good in its line.

l SC’s net profit margin is fairly good in 2011, but average in the first three quarters of 2012.

l SC’s return on total assets is fairly good in 2011, but average in the first three quarters of 2012.

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

LIQUIDITY: AVERAGE

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

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

l The inventory of SC is maintained in a fairly large level.

l The accounts receivable of SC is fairly large.

l The short-term loan of SC appears average.

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

LEVERAGE: FAIRLY GOOD

l The debt ratio of SC is low.

l The risk for SC to go bankrupt is low.

Overall financial condition of the SC: Fairly Stable.

SC is considered large-sized in its line with fairly stable financial conditions. The large amount of inventory and accounts receivable could be a threat to SC’s financial condition.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.54.93
UK Pound	1	Rs.87.38
Euro	1	Rs.69.93

INFORMATION DETAILS

Report Prepared by :

PDT

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.