MIRA INFORM REPORT

Report Date :

21.06.2013

IDENTIFICATION DETAILS

Name :	SHEN HAI CO. LTD.

Registered Office :	Room 1701-1702, 17/F., Tower II, Admiralty Centre, 18 Harcourt Road

Country :	Hong Kong

Date of Incorporation :	04.01.1983

Com. Reg. No.:	08207321

Legal Form :	Private Limited Company

Line of Business :	General Importer and Exporter of All kinds of light industrial products such as toys, stationery and sporting goods, arts and crafts, textiles, plastic products, leather shoes, household electrical appliances, furniture, plush toys, flasks.

No. of Employees :	12.

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 :	Good

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,2013

Country Name

Previous Rating

(31.12.2012)

Current Rating

(31.03.2013)

Hong Kong

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

Hong Kong - ECONOMIC OVERVIEW

Hong Kong has a free market economy, highly dependent on international trade and finance - the value of goods and services trade, including the sizable share of re-exports, is about four times GDP. Hong Kong levies excise duties on only four commodities, namely: hard alcohol, tobacco, hydrocarbon oil, and methyl alcohol. There are no quotas or dumping laws. Hong Kong''s open economy left it exposed to the global economic slowdown that began in 2008. Although increasing integration with China, through trade, tourism, and financial links, helped it to make an initial recovery more quickly than many observers anticipated, it again faces a possible slowdown as exports to the Euro zone and US slump. The Hong Kong government is promoting the Special Administrative Region (SAR) as the site for Chinese renminbi (RMB) internationalization. Hong Kong residents are allowed to establish RMB-denominated savings accounts; RMB-denominated corporate and Chinese government bonds have been issued in Hong Kong; and RMB trade settlement is allowed. The territory far exceeded the RMB conversion quota set by Beijing for trade settlements in 2010 due to the growth of earnings from exports to the mainland. RMB deposits grew to roughly 9.1% of total system deposits in Hong Kong by the end of 2012, an increase of 59% from the previous year. The government is pursuing efforts to introduce additional use of RMB in Hong Kong financial markets and is seeking to expand the RMB quota. The mainland has long been Hong Kong''s largest trading partner, accounting for about half of Hong Kong''s exports by value. Hong Kong''s natural resources are limited, and food and raw materials must be imported. As a result of China''s easing of travel restrictions, the number of mainland tourists to the territory has surged from 4.5 million in 2001 to 34.9 million in 2012, outnumbering visitors from all other countries combined. Hong Kong has also established itself as the premier stock market for Chinese firms seeking to list abroad. In 2012 mainland Chinese companies constituted about 46.6% of the firms listed on the Hong Kong Stock Exchange and accounted for about 57.4% of the Exchange''s market capitalization. During the past decade, as Hong Kong''s manufacturing industry moved to the mainland, its service industry has grown rapidly. Growth slowed to 5% in 2011, and less than 2% in 2012. Credit expansion and tight housing supply conditions caused Hong Kong property prices to rise rapidly and inflation to rise 4.1% in 2012. Lower and middle income segments of the population are increasingly unable to afford adequate housing. Hong Kong continues to link its currency closely to the US dollar, maintaining an arrangement established in 1983.

Source : CIA

Company name

SHEN HAI CO. LTD.

ADDRESs

Room 1701-1702, 17/F., Tower II, Admiralty Centre, 18 Harcourt Road, Hong Kong.

PHONE: 852-2543 3661

FAX: 852-2541 4933

E-MAIL: shenhai@shenhai.com.hk

MANAGEMENT

Managing Director: Mr. Qiu Xingguo

SUMMARY

Incorporated on: 4th January, 1983.

Organization: Private Limited Company.

Capital: Nominal: HK$5,000,000.00

Issued: HK$5,000,000.00

Business Category: General Importer and Exporter

Employees: 12.

Main Dealing Banker: Bank of China (Hong Kong) Ltd., Hong Kong.

Banking Relation: Very Good.

Company name and address

SHEN HAI CO. LTD.

ADDRESS

Registered Head Office:-

Room 1701-1702, 17/F., Tower II, Admiralty Centre, 18 Harcourt Road, Hong Kong.

Shanghai Office:-

10/F., 98 Nanjing Road East, Shanghai 200002, China.

[Tel: (86-21) 6321 9828; Fax: (86-21) 6352 2243]

Holding Company:-

Shanghai Niu (Group) Co. Ltd.

98 Nanjing Road East, Shanghai, China.

[Tel: (86-21) 6321 8662; Fax: (86-21) 6329 4276]

Associated Companies:-

Hoi Tung Marine Machinery Suppliers Ltd., Hong Kong.

Shanghai Haixin Group Co. Ltd., China.

Shanghai Huiluo Co. Ltd., China.

Shanghai Rich Wood Industrial Co. Ltd., China.

Shenmo System Integration (Hong Kong) Co. Ltd., Hong Kong.

Shenzhen Shenlong Investment Co. Ltd., China.

Sino-Oceans Ltd., Hong Kong.

Wuxi Haijiang Printing & Dyeing Co. Ltd., China.

etc.

BUSINESS REGISTRATION NUMBER

08207321

COMPANY FILE NUMBER

0120333

MANAGEMENT

Chairman: Mr. Fan Dazheng

Managing Director: Mr. Qiu Xingguo

Contact Person: Mr. Wang Hai Niao

CAPITAL

Nominal Share Capital: 5,000,000.00 (Divided into 5,000,000 shares of HK$1.00 each)

Issued Share Capital: HK$5,000,000.00

SHAREHOLDERS

(As per registry dated 04-01-2013)

Name		No. of shares
Shanghai Niu (Group) Co. Ltd. 98 Nanjing Road East, Shanghai, China.		3,000,000
Hoi Tung Marine Machinery Suppliers Ltd., Hong Kong.		2,000,000
		––––––––
	Total:	5,000,000 =======

DIRECTORS

(As per registry dated 04-01-2013)

Name

(Nationality)

Address

FAN Dazheng

98 Nanjing Road East, Shanghai, China.

FAN Jie

Room 1701-1702, 17/F., Tower II, Admiralty Centre,

18 Harcourt Road, Hong Kong.

JIAO Tianyue

27/F., China Merchants Tower, Shun Tak Centre,

168-200 Connaught Road Central, Hong Kong.

QIU Xingguo

27/F., China Merchants Tower, Shun Tak Centre,

168-200 Connaught Road Central, Hong Kong.

YAN Zhenbo

Room 1701-1702, 17/F., Tower II, Admiralty Centre,

18 Harcourt Road, Hong Kong.

SECRETARY

(As per registry dated 04-01-2013)

Name	Address
WANG Hainiao	Flat B, 14/F., Richview Terrace, 26 Square Street, Sheung Wan, Hong Kong.

HISTORY

The subject was incorporated on 4th January, 1983 as a private limited liability company under the Hong Kong Companies Ordinance.

Apart from these, neither material change nor amendment has been ever traced and noted.

OPERATIONS

Activities: General Importer and Exporter.

Lines: All kinds of light industrial products such as toys, stationery and sporting goods, arts and crafts, textiles, plastic products, leather shoes, household electrical appliances, furniture, plush toys, flasks.

Employees: 12.

Commodities Imported:-

Furniture – China.

Plush toys – China.

Flasks – China.

Markets: China, Taiwan, Mexico, Germany, Netherlands, etc.

Terms/Sales: Various terms.

Terms/Buying: L/C, T/T, D/P, etc.

FINANCIAL INFORMATION

Nominal Share Capital: 5,000,000.00 (Divided into 5,000,000 shares of HK$1.00 each)

Issued Share Capital: HK$5,000,000.00

Mortgage or Charge: (See attachment)

Profit or Loss: Operation is profitable.

Condition: Business is active and good.

Facilities: Making active use of general banking facilities.

Payment: Met as contracted.

Commercial Morality: Good.

Bankers:-

Bank of China (Hong Kong) Ltd., Hong Kong.

BNP Paribas, Hong Kong Branch.

Standing: Very Good.

GENERAL

Shen Hai Co. Ltd. [SHCL] was incorporated on 4th January, 1983 as a joint venture business between Shanghai Niu (Group) Co. Ltd., a China-based firm holding 60% interest, and Hoi Tung Marine Machinery Suppliers Ltd., a Hong Kong-based company holding 40%.

Shanghai Niu (Group) Co. Ltd. was originally founded in 1992 under the name of Shanghai Second Light Industrial Corporation. It is an investment holding company engaged in the investment, administrating and operating a number of about 20 subsidiaries engaged in the industries of light industrial products, textiles, electronics, chemicals, property investment, etc. Now, its total assets are over RMB5.0 billion Yuan.

Hoi Tung Marine Machinery Suppliers Ltd. is a member of China Merchants Holding Group with its priority of the service for shipping. It is engaged in the import and export of marine products. It has ports and shipyards in China and shipowners worldwide as its major clients. Besides, it serves as the agent for many well-known brands of marine products worldwide.

SHCL was set up in Hong Kong engaged in making investments and importing and exporting business. Its investment holding enterprises include Shanghai Haixin Group Co. Ltd., Shanghai Huiluo Co. Ltd., Shanghai Rich Wood Industrial Co. Ltd., Shenzhen Shenlong Investment Co. Ltd. and Wuxi Haijiang Printing & Dyeing Co. Ltd. in China, Shenmo System Integration (Hong Kong) Co. Ltd. and Sino-Oceans Ltd. in Hong Kong.

Currently, SHCL is trading in the following commodities:-

· Candle (excluding musical candle);

· Chinese Medicine;

· Costume Jewellery – Plastic (from France);

· Cutlery – Stainless Steel;

· Decorations – Crystal;

· Decorations – Porcelain / Ceramic (porcelain from Germany);

· Furniture – Chinese Style;

· Furniture – Western Style;

· Giftware;

· Industrial Chemicals (from Japan and Taiwan);

· Jewellery – Crystal (from France);

· Pharmaceutical Preparation;

· Piecegoods – Blended;

· Piecegoods – Synthetic;

· Piecegoods – Vegetable Fibre;

· Playing Card;

· Sheet – Plastic (Soft) (PVC from China);

· Slippers – Textile (plush animal);

· Souvenirs and Premiums;

· Tableware – Metal (stainless steel);

· Tableware – Porcelain / Ceramic / Stone (porcelain from UK); &

· Wooden Flooring (hardwood flooring).

The commodities carried by SHCL include a wide range of items. Its business is active and good.

SHCL concentrates on importing raw materials, equipment, original spare parts and devices for the light industrial enterprises in Shanghai and Shanghai invested enterprises. It is also engaged in sample processing, various forms of international trading.

SHCL is also engaged in Quayside Container Cranes and other major port machinery import and export proxy business for domestic and foreign manufacturers, suppliers and users. So far, SHCL has acted the port machinery import and export business for such companies as Dalian Huarui Heavy Ind. Int’l Co., Ltd., Shantou Port Affairs Group Co., Ltd..

Mr. Fan Dazheng is one of the directors of SHCL. He is also Chairman of the Board. Fan is also the Vice Chairman of China National Light Industry Associations, Deputy Director of Committee for Economic Affairs of Shanghai CPPCC (The Chinese Peoples Political Consultative Conference), and President of Directors Board of Shanghai New Industry Union (Group) Co. Ltd.

The history of SHCL in Hong Kong is over thirty years.

On the whole, in view of the parentage and history of SHCL, consider it good for normal business engagements.

REMARKS

Property information of the company:-

Property Location: Unit 1 & 2 on 17/F. of Tower II, Admiralty Centre,
18 Harcourt Road, Hong Kong.

Owner: Shen Hai Co. Ltd.

Date of Purchase: n.a.

Purchased Price: n.a.

Incumbrances:-

Date of Mortgage	Amount Consideration	Mortgagee	Nature
01-11-2005	-	Bank of China (Hong Kong) Ltd., Hong Kong.	Mortgage to secure general banking facilities

MORTGAGE OR CHARGE

Date

Particulars

Amount

24-09-2012

Instrument: Customer Agreement between the Customer, Bank Morgan Stanley AG & Morgan Stanley & Co. International plc constituted by inter alia General Dealing Terms, a Signature Page signed on behalf of the Customer on 26th June 2012 and an acceptance letter signed on behalf of BMSAG, acting through its Singapore Branch and/or Hong Kong Branch (for itself and for MSIP) on 24th September 2012.

Property:

Fixed Charge

Pursuant to paragraph 1.2 of Annex A to the General Terms, as continuing security for the payment, performance and discharge of all liabilities, the customer charges by way of first fixed charge with full title guarantee, free of any adverse interest whatsoever

Mortgagee: 1) Bank Morgan Stanley AG

Bahnhofstrasse 92, CH-8021 Zurich, Switzerland.

2) Morgan Stanley & Co. International plc.

25 Cabot Square, Canary Wharf, London E14QA, England.

The Customer’s liabilities to the Morgan Stanley Companies

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.59.70
UK Pound	1	Rs.92.22
Euro	1	Rs.79.19

INFORMATION DETAILS

Report Prepared by :

SDA

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.