MIRA INFORM REPORT

Report Date :

16.11.2012

IDENTIFICATION DETAILS

Name :	China Railway No.3 Engineering Group CO Ltd.
Registered Office :	No. 269 Yingze Street, Taiyuan, Shanxi Province 030001 Pr
Country :	China
Financials (as on) :	30.06.2012
Date of Incorporation :	25.12.1985
Com. Reg. No.:	140000100092633
Legal Form :	One-Person Limited Liability Company
Line of Business :	Subject is engaged in various types of engineering and construction contracting business and international trade.
No. of Employees :	30,000

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
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

Status :	Good
Payment Behaviour :	Regular
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

CHINA RAILWAY NO.3 ENGINEERING GROUP CO., LTD.

NO. 269 YINGZE STREET, TAIYUAN, SHANXI PROVINCE 030001 PR CHINA

TEL: 86 (0) 351-8950000

FAX: 86 (0) 351-8950501

EXECUTIVE SUMMARY

Date of Registration : DECEMBER 25, 1985

REGISTRATION NO. : 140000100092633

LEGAL FORM : ONE-PERSON LIMITED LIABILITY COMPANY

CHIEF EXECUTIVE : GAO LINGQI (LEGAL REPRESENTATIVE)

REGISTERED CAPITAL : CNY 2,210,689,500

staff : 30,000

BUSINESS CATEGORY : ENGINEERING & trading

profits : cny 83,464,000 (FROM JAN. 1, 2012 TO JUN. 30, 2012)

EQUITIES : cny 2,851,837,000 (AS OF JUN. 30, 2012)

WEBSITE : www.ztsj.cn

E-MAIL : admin@ztsj.cn

PAYMENT : AVERAGE

MARKET CONDITION : competitive

FINANCIAL CONDITION : FAIRly good

OPERATIONAL TREND : fairly steady

GENERAL REPUTATION : fairly good

EXCHANGE RATE : CNY 6.24 = USD 1

Adopted abbreviations (as follows)

SC - Subject Company (the company inquired by you)

N/A – Not available

CNY – China Yuan Ren Min Bi

OPERATIONAL TREND & GENERAL REPUTATION:

This section aims at indicating the relative positions of SC in respect of its operational trend & general reputation

Operational Trend:- General Reputation:-

Upward Excellent

Steady Good

Fairly Steady Fairly Good

Ordinary Average

Fair Fair

Stagnant Detrimental

Downward Not known

Not known Not yet be determined

Not yet be determined

LEGAL STATUS & HISTORY

SC was established as one-person limited liabilities company of PRC with State Administration for Industry & Commerce (SAIC) under registration No.: 140000100092633.

SC’s Organization Code Certificate No.: 11010451-3

SC’s registered capital: CNY 2,210,689,500

SC’s paid-in capital: CNY 2,210,689,500

Registration Change Record:-

No significant changes of SC have been noted in SAIC since its incorporation.

Current Co search indicates SC’s shareholders & chief executives are as follows:-

Name of Shareholder (s)	% of Shareholding
China Railway Group Limited	100

SC’s Chief Executives:-

Position	Name
Legal Representative and Chairman	Gao Lingqi
Vice Chairman and General Manager	Liu Baolong

RECENT DEVELOPMENT

Since 1994, SC for 16 consecutive years by the Shanxi branch of China Construction Bank's corporate credit rating board rated AAA grade enterprises, has won the "company of countrywide quality benefit advanced construction", "company of construction of countrywide user satisfaction", "equipment of countrywide construction company manages outstanding unit", "countrywide Ankang cup contest activity superior enterprise", "technical innovation is advanced enterprise", "national excellent construction enterprise is advanced unit", "fifteen national construction industry technology innovation is advanced enterprise", "the contract Shou-credit enterprises", "national railway workers locomotive trophy" such as the honorary title, won the quality management system, environmental management system and occupation health and safety management certification, has won widespread praise, in the industry to shape a three brand.

SHAREHOLDER CHART & BACKGROUND

Name % of Shareholding

China Railway Group Limited 100

China Railway Group Limited has 46 subsidiaries, including 28 wholly owned subsidiaries, 15 holding subsidiaries, 4 branch companies and 3 joint venture subsidiaries. In the year of 2005 and 2006, China Railway was the forth and third largest construction company in the world, respectively. In 2007, CREC was ranked 342nd in the Fortune Global 500 companies, and listed the 417th in the World’s 500 Most Influential Brands and the 13th in China’s Top 500 Enterprises.

Address: China Railway Building, Building 9, No. 69 Fuxing Road, Haidian District, Beijing

Tel: 86 (0) 10-51845225

Fax: 86 (0) 10-51841757

Web: www.crecg.com

E-mail: Webmaster@crec.cn

Registration No.: 100000000041175

Date of Registration: September 12, 2007

Legal Form: Shares Limited Company

Registered Capital: CNY 21,299,900,000

Legal Representative: Li Changjin

MANAGEMENT

Gao Lingqi, Legal Representative and Chairman

---------------------------------------------------------------------------

Ø Gender: M

Ø Qualification: University

Ø Working experience (s):

At present, working in SC as legal representative and chairman

Liu Baolong, Vice Chairman and General Manager

-----------------------------------------------------------------------------

Ø Gender: M

Ø Qualification: University

Ø Working experience (s):

At present, working in SC as vice chairman and general manager

BUSINESS OPERATION

SC’s registered business scope includes contracting engineering for industry, energy, traffic, water conservancy, environment protection, and construction; investment development of the above items, real estate, and energy; property development; installing railway line and pipeline equipment; purchasing engineering materials and equipment; blasting and demolition works; commodity concrete & concrete component; prestressed concrete engineering; architectural decoration; technology development and services, survey and design and consulting; contracting overseas projects and projects of the international tender; municipal engineering construction general contracting; foreign labor service cooperation; exporting equipment and materials; property management; renting houses; railway operation management and service; supply, transportation, storage rental; the site, storehouse, facilities rental; manufacturing and repairing machinery, and renting equipment; Catering accommodation; automobile transportation (limited to operate by its branches); and storage.

SC is mainly engaged in various types of engineering and construction contracting business and international trade.

SC’s engineering mainly includes:

Railway Engineering

Tunnel Engineering

Road Engineering

Overseas Engineering

SC sources its materials 90% from domestic market, and 10% from the overseas market. SC sells 60% of its products in domestic market, and 40% to the overseas market, mainly Southeast Asia, Africa, etc.

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.

Staff & Office:

--------------------------

SC is known to have approx. 30,000 staff (including SC’s branches) at present.

SC owns an area as its operating office, but the detailed information is unknown.

RELATED COMPANY

Subsidiaries,

-----------------

The Second Engineering Co., Ltd. of the Third Engineering Group of China Railway

The Third Engineering Co., Ltd. of the Third Engineering Group of China Railway

The Fourth Engineering Co., Ltd. of the Third Engineering Group of China Railway

The Fifth Engineering Co., Ltd. of the Third Engineering Group of China Railway

The Sixth Engineering Co., Ltd. of the Third Engineering Group of China Railway

Etc.

PAYMENT

Overall payment appraisal:

( ) Excellent ( ) Good (X) Average ( ) Fair ( ) Poor ( ) Not yet be 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.

BANKING

The bank information of SC is not filed in local SAIC.

FINANCIALS

Financial Summary

Unit: CNY’000	As of Dec. 31, 2010	As of Dec. 31, 2011	As of Jun. 30, 2012
Total assets	19,452,594	20,238,626	22,565,404
	-------------	-------------	-------------
Total liabilities	16,813,412	17,388,312	19,713,567
Equities	2,639,182	2,850,314	2,851,837
	-------------	-------------	-------------
Profits	402,174	283,294	83,464

Note: The detailed financials of SC are not available in SAIC.

Important Ratios

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

	As of Dec. 31, 2010	As of Dec. 31, 2011	As of Jun. 30, 2012
*Liabilities to assets	0.86	0.86	0.87
*Net profit margin (%)	--	--	--
*Return on total assets (%)	2.07	1.40	0.37
* Revenue/Total assets	--	--	--

FINANCIAL COMMENTS

PROFITABILITY: AVERAGE

l SC’s return on total assets is average in both years.

LEVERAGE: AVERAGE

l The debt ratio of SC is fairly high.

l The risk for SC to go bankrupt is low

Overall financial condition of the SC: Fairly Good.

CONCLUSIONS

SC is considered large-sized in its line with fairly good financial conditions.

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 :

NIT

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.