MIRA INFORM REPORT

Report Date :

29.10.2013

IDENTIFICATION DETAILS

Name :	JIANGSU OVERSEAS GROUP CO., LTD.
Registered Office :	21f Xinhua Mansion, No. 55 Zhongshan Road, Nanjing Jiangsu Province 210008 Pr
Country :	China
Financials (as on) :	31.12.2012
Date of Incorporation :	07.07.1995
Com. Reg. No.:	320000000008120
Legal Form :	Sole State-Owned Enterprise
Line of Business :	Subject is engaged in the businesses of state-owned assets investment, administration and management, international trade, tender and international labor exchanges
No. of Employees :	80

RATING & COMMENTS

MIRA’s Rating :

Ba

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 – March, 31^st, 2013

Country Name	Previous Rating (31.12.2012)	Current Rating (31.03.2013)
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 2012 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 under 8% for 2012. An economic slowdown in Europe contributed to China's, and is expected to further drag Chinese growth in 2013. 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

JIANGSU OVERSEAS GROUP CO., LTD.

21F XINHUA MANSION, NO. 55 ZHONGSHAN ROAD, NANJING JIANGSU PROVINCE 210008 PR CHINA

TEL: 86 (0) 25-84795562/84795827

FAX: 86 (0) 25-84795850/84795883

EXECUTIVE SUMMARY

Date of Registration : JULY 7, 1995

REGISTRATION NO. : 320000000008120

LEGAL FORM : SOLE STATE-OWNED ENTERPRISE

CHIEF EXECUTIVE : YANG DAWEI (LEGAL REPRESENTATIVE)

REGISTERED CAPITAL : CNY 500,000,000

staff : 80

BUSINESS CATEGORY : INVESTMENT & MANAGEMENT & TRADE & SERVICE

Revenue : CNY 13,580,173,000 (Consolidated, AS OF DEC. 31, 2012)

EQUITIES : CNY 1,574,938,000 (Consolidated, AS OF DEC. 31, 2012)

WEBSITE : www.joc.cn

E-MAIL : joc@joc.cn

PAYMENT : AVERAGE

MARKET CONDITION : COMPETITIVE

FINANCIAL CONDITION : fairly stable

OPERATIONAL TREND : STEADY

GENERAL REPUTATION : FAIRLY GOOD

EXCHANGE RATE : CNY 6.08 = 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 a sole state-owned enterprise of PRC with State Administration of Industry & Commerce (SAIC) under registration No.: 320000000008120 on July 7, 1995.

SC’s Organization Code Certificate No.: 13478500-X

SC’s registered capital: CNY 500,000,000

SC’s paid-in capital: CNY 500,000,000

Registration Change Record:-

Date	Change of Contents	Before the change	After the change
2007-7	Registered Capital	CNY 88,880,000	CNY 500,000,000

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

Name of Shareholder (s)	% of Shareholding
Jiangsu Provincial Government	100

SC’s Chief Executives:-

Position	Name
Legal Representative, Chairman, and General Manager	Yang Dawei
Deputy General Manager	Hu Keping

RECENT DEVELOPMENT

SC has got the certificate of ISO 9002.

SHAREHOLDER CHART & BACKGROUND

Name % of Shareholding

Jiangsu Provincial Government 100

MANAGEMENT

Yang Dawei, Legal Representative, Chairman and General Manager

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

Gender: M

Age: 60’s

Qualification: University

Working experience (s):

From 1995 to present, working in SC as legal representative, chairman and general manager

Hu Keping, Deputy General Manager

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

Gender: M

Qualification: University

Working experience (s):

At present, working in SC as deputy general manager

BUSINESS OPERATION

SC’s registered business scope includes selling oils and foodstuffs; contracting abroad engineering and domestic international bidding projects; dispatching workers abroad for above projects; investing, administrating and managing state-owned assets; importing and exporting textiles, light industrial products, electronic products, native products, artificial products, mineral products, chemical materials, machinery, instruments, machinery equipment, technologies and raw materials; barter trader, assembly business, compensation trade, transit trade with previous Soviet and East European countries; interior trade, technology services, and consulting services.

SC is mainly engaged in the businesses of state-owned assets investment, administration and management, international trade, tender and international labor exchanges.

SC’s products mainly include: equipments, textile machinery, medical instruments, marine equipments, complete equipments, equipments for municipal infrastructures, etc.

SC sources its merchandises 40% from the overseas market, mainly from Japan, USA and European countries, etc, and 60% from domestic market. SC sells 50% of its merchandises in domestic market, 50% 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.

*Major Customers:

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

Shanghai Huijun Trade Co., Ltd.

Shanghai Sangang Group

Jiangsu Litian New Materials Co., Ltd.

Infinity Trading Co.

Staff & Office:

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

SC is known to have approx. 80 staff at present.

SC onws an area as its operating office of approx. 1,000 sq. meters at the heading address.

RELATED COMPANY

SC is known to have 37 subsidiaries at present, and the following are the major ones.

Jiangsu Provincial Foreign Trade Corporation

Address: No.55 Zhongshan Road, Nanjing

Tel: 025-84795777

Fax: 025-84795700

E-mail: webmaster@jsft.com

JOC International Ltd.

Address: No.8 Liyuan South Road, Jiangning District, Nanjing

Tel: 025-25-52782808

E-mail: webmaster@jocltd.com

JOC International Technical Engineering Co., Ltd.

Address: 24-26/F, No.55 Zhongshan Road, Nanjing

Tel:025-84795988

E-mail: webmaster@jocite.com

JOC Technical Development Co., Ltd.

Address: No.8 Liyuan South Road, Jiangning District, Nanjing

Tel: 025-25-84041610

JOC Great Wall Corporation

Address: No.8 Liyuan South Road, Jiangning District, Nanjing

Tel: 025-52782880/52782881

E-mail: webmaster@jocgreatwall.com

Xpand China Corporation

Address: 23/F, No.55 Zhongshan Road, Nanjing

Tel: 025-84795555

E-mail: contact@xpandchina.com

Zhong Shan Co., Ltd.

Tel: 00852-2527-3600

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

Basic Bank:

Bank of China Jiangsu Branch

AC#: 044138090010005186

FINANCIALS

Consolidated Balance Sheet

Unit: CNY’000	As of Dec. 31, 2011	As of Dec. 31, 2012
Cash	1,402,910	1,549,370
Notes receivable	705,231	329,546
Accounts receivable	450,872	737,207
Advances to suppliers	633,148	549,048
Other receivable	296,641	287,216
Inventory	1,451,007	1,348,879
Non-current assets within one year	0	0
Other current assets	375,418	368,403
	------------------	------------------
Current assets	5,315,227	5,169,669
Long-term receivables	24,635	17,099
Long-term investment	343,670	406,647
Investment property	385,084	462,136
Fixed assets	857,950	996,341
Construction in progress	150,461	251,271
Intangible assets	502,963	347,106
Long-term prepaid expenses	2,584	819
Deferred income tax assets	10,758	5,229
Other non-current assets	106,284	105,974
	------------------	------------------
Total assets	7,699,616	7,762,291
	=============	=============
Short-term loans	2,368,971	2,302,878
Notes payable	154,356	171,642
Accounts payable	1,598,528	1,780,611
Wages payable	68,759	73,512
Taxes payable	-12,207	-47,154
Interest payable	18,230	6,515
Dividends payable	5,040	5,088
Advances from clients	929,651	866,096
Other payable	172,179	53,500
Other current liabilities	0	103
	------------------	------------------
Current liabilities	5,303,507	5,212,791
Non-current liabilities	946,009	974,562
	------------------	------------------
Total liabilities	6,249,516	6,187,353
Equities	1,450,100	1,574,938
	------------------	------------------
Total liabilities & equities	7,699,616	7,762,291
	=============	=============

Consolidated Income Statement

Unit: CNY’000	As of Dec. 31, 2011	As of Dec. 31, 2012
Revenue	13,233,140	13,580,173
Cost of sales	12,439,575	12,828,368
Taxes and surcharges	20,383	20,749
Sales expense	289,766	282,332
Management expense	236,340	308,883
Finance expense	113,605	162,172
Investment income	6,676	90,735
Non-business income	93,691	51,211
Non-business expenditure	1,734	10,276
Profit before tax	13,192	149,583
Less: profit tax	12,647	33,244
Profits	545	116,339

Important Ratios

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

	As of Dec. 31, 2011	As of Dec. 31, 2012
*Current ratio	1.00	0.99
*Quick ratio	0.73	0.73
*Liabilities to assets	0.81	0.80
*Net profit margin (%)	0.004	0.86
*Return on total assets (%)	0.007	1.50
*Inventory / Revenue ×365	41 days	37 days
*Accounts receivable/ Revenue ×365	13 days	20 days
* Revenue/Total assets	1.72	1.75
* Cost of sales / Revenue	0.94	0.94

FINANCIAL COMMENTS

PROFITABILITY: AVERAGE

The revenue of SC appears good in its line.

SC’s net profit margin is average in 2012.

SC’s return on total assets is average in 2012.

SC’s cost of sales is fairly high, comparing with its revenue.

LIQUIDITY: FAIR

The current ratio of SC is maintained in a fair level.

SC’s quick ratio is maintained in a fair level.

The inventory of SC is maintained in an average level.

The accounts receivable of SC is maintained in an average level.

The short-term loans of SC appear large.

SC’s revenue is in an average level, comparing with the size of its total assets.

LEVERAGE: FAIRLY GOOD

The debt ratio of SC is average.

The risk for SC to go bankrupt is low.

Overall financial condition of the SC: Fairly Stable.

CONCLUSIONS

SC is considered large-sized in its line with fairly stable financial conditions. The large amount of short-term loans may be a threat to SC’s financial condition.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.61.50
UK Pound	1	Rs.99.49
Euro	1	Rs.84.88

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.