MIRA INFORM REPORT

Report Date :

30.04.2014

IDENTIFICATION DETAILS

Name :	LIBBEY GLASSWARE (CHINA) CO., LTD.
Registered Office :	No. 2211, East Aimin Road, Economic And Technical Development Zone, Langfang, Hebei Province 065001 PR
Country :	China
Financials (as on) :	31.12.2013
Date of Incorporation :	22.12.2004
Com. Reg. No.:	131000400002366
Legal Form :	Wholly Foreign-Owned Enterprise
Line of Business :	Subject is mainly engaged in manufacturing and selling glassware
No. of Employees	400

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, 2014

Country Name	Previous Rating (31.12.2013)	Current Rating (31.03.2014)
China	A2	A2

Risk Category	ECGC Classification
Insignificant	A1
Low Risk	A2
Moderate Low Risk	B1
Moderate Risk	B2
Moderate High Risk	C1
High Risk	C2
Very High Risk	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 2013 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 consumption; (b) facilitating higher-wage job opportunities for the aspiring middle class, including rural migrants and increasing numbers of college graduates; (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. Debt overhang from its credit-fueled stimulus program in 2008-10, particularly among local governments, and soaring property prices challenge policy makers currently. Their efforts to cool a red-hot property market in 2011 appear to have curbed inflation, but contributed to slower GDP growth in 2012 and 2013. Slow recovery in Europe and other key export markets have also retarded growth. 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 fixed investments and exports in the future. However, China has made only marginal progress toward these rebalancing goals. The new government of President XI Jinping has signaled a greater willingness to undertake reforms that focus on China's long-term economic health, including giving the market a more decisive role in allocating resources

Source : CIA

Company name and address

LIBBEY GLASSWARE (CHINA) CO., LTD.

NO. 2211, EAST AIMIN ROAD, ECONOMIC AND TECHNICAL DEVELOPMENT ZONE, LANGFANG, HEBEI PROVINCE 065001 PR CHINA

TEL: 86 (0) 316-6089898

FAX: 86 (0) 316-6060989

EXECUTIVE SUMMARY

DATE OF REGISTRATION : DECEMBER 22, 2004

REGISTRATION NO. : 131000400002366

LEGAL FORM : WHOLLY FOREIGN-OWNED ENTERPRISE

CHIEF EXECUTIVE : STEPHANIE ANNE STREETER (LEGAL REPRESENTATIVE)

REGISTERED CAPITAL : USD 45,369,624

staff : 400

BUSINESS CATEGORY : MANUFACTURING & TRADING

Revenue : CNY 253,690,000 (AS OF DEC. 31, 2013)

EQUITIES : CNY 331,800,000 (AS OF DEC. 31, 2013)

WEBSITE : N/A

E-MAIL : HRLibbeyChina@libbey.cn

PAYMENT : AVERAGE

MARKET CONDITION : COMPETITIVE

FINANCIAL CONDITION : fairly stable

OPERATIONAL TREND : fairly STEADY

GENERAL REPUTATION : AVERAGE

EXCHANGE RATE : CNY 6.25 = 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 wholly foreign-owned enterprise of PRC with State Administration of Industry & Commerce (SAIC) under registration No.: 131000400002366 on December 22, 2004.

SC’s Organization Code Certificate No.: 76981431-0

SC’s registered capital: USD 45,369,624

SC’s paid-in capital: USD 45,369,624

Registration Change Record:-

Date	Change of Contents	Before the change	After the change
2010-8	Legal Representative	Kenneth G Wilkes	Robert Baron Rubio
2010-12	Registered Capital	USD 22,150,000	USD 45,369,624
2013-4	Legal Representative	Robert Baron Rubio	Stephanie Anne Streeter

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

Name of Shareholder (s)	% of Shareholding
Libbey Asia Limited (Hong Kong)	100

SC’s Chief Executives:-

Position	Name
Legal Representative and Chairman	Stephanie Anne Streeter
General Manager	Gary L Moreau
Director	Susan A. Kovach
	Sherry Lea Buck

RECENT DEVELOPMENT

No recent development was found during our checks at present.

SHAREHOLDER CHART & BACKGROUND

Name % of Shareholding

Libbey Asia Limited (Hong Kong) 100

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

Registration No.: 0926351

Legal Form: private

Date of Registration: 2004-10-6

Active Status: Live

MANAGEMENT

Stephanie Anne Streeter, Legal Representative and Chairman

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

Gender: F

Nationality: USA

Age: 50’s

Qualification: University

Working experience (s):

From 2013 to present, working in SC as legal representative and chairman

Also working in Libbey Glass Inc. as CEO

Gary L Moreau, General Manager

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

Gender: M

Qualification: University

Working experience (s):

At present, working in SC as general manager

Director

----------

Susan A. Kovach

Sherry Lea Buck

BUSINESS OPERATION

SC’s registered business scope includes designing and manufacturing special glassware, and selling its products.

SC is mainly engaged in manufacturing and selling glassware.

Brand: LIBBEY

SC’s products mainly include: all kinds of wine glasses sets, etc.

SC sources its materials 97% from domestic market, and 3% from overseas market, mainly USA and Turkey. SC sells 50% of its products in domestic market, and 50% to overseas market, mainly South America and Europe countries.

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*

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

Libbey Glass Inc.

GTS Dominicana, S.A.

Staff & Office:

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

SC is known to have approx. 400 staff at present.

SC owns an area as its operating office & factory of approx. 120,000 sq. meters at the heading address.

RELATED COMPANY

Libbey Glass Inc.

Web: www.libbey.com

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:

China Construction Bank Langfang Economic and Technical Development Zone Sub-branch

AC#: 13001705208050500482

FINANCIALS

Balance Sheet

Unit: CNY’000	As of Dec. 31, 2011	As of Dec. 31, 2012	As of Dec. 31, 2013
Cash	39,250	19,160	26,820
Notes receivable	0	0	0
Accounts receivable	26,250	14,000	30,770
Advances to suppliers	480	810	450
Short-term investment	10,000	10,000	0
Other receivable	3,630	5,870	3,250
Inventory	77,650	86,320	84,230
Non-current assets within one year	0	0	0
Other current assets	1,050	430	970
	------------------	------------------	------------------
Current assets	158,310	136,590	146,490
Fixed assets	333,540	313,050	325,750
Construction in progress	0	9,180	880
Intangible assets	11,190	10,930	10,660
Deferred income tax assets	0	0	0
Other non-current assets	500	330	0
	------------------	------------------	------------------
Total assets	503,540	470,080	483,780
	=============	=============	=============
Short-term loans	0	0	31,500
Notes payable	0	0	0
Accounts payable	14,850	15,150	15,710
Accrued expenses	9,040	14,580	7,780
Advances from clients	2,980	590	1,630
Other payable	31,950	55,010	80,820
Other current liabilities	9,130	12,900	14,540
	------------------	------------------	------------------
Current liabilities	67,950	98,230	151,980
Non-current liabilities	180,000	60,000	0
	------------------	------------------	------------------
Total liabilities	247,950	158,230	151,980
Equities	255,590	311,850	331,800
	------------------	------------------	------------------
Total liabilities & equities	503,540	470,080	483,780
	=============	=============	=============

Income Statement

Unit: CNY’000	As of Dec. 31, 2011	As of Dec. 31, 2012	As of Dec. 31, 2013
Revenue	274,370	288,130	253,690
Cost of sales	183,020	181,560	181,140
Sales expense	17,500	18,240	7,240
Management expense	19,190	17,790	16,290
Finance expense	15,230	7,740	3,490
Profit before tax	35,930	59,440	31,880
Less: profit tax	0	3,190	11,930
Profits	35,930	56,250	19,950

Important Ratios

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

	As of Dec. 31, 2011	As of Dec. 31, 2012	As of Dec. 31, 2013
*Current ratio	2.33	1.39	0.96
*Quick ratio	1.19	0.51	0.41
*Liabilities to assets	0.49	0.34	0.31
*Net profit margin (%)	13.10	19.52	7.86
*Return on total assets (%)	7.14	11.97	4.12
*Inventory / Revenue ×365	104 days	110 days	122 days
*Accounts receivable/ Revenue ×365	35 days	18 days	45 days
*Revenue/Total assets	0.54	0.61	0.52
*Cost of sales / Revenue	0.67	0.63	0.71

FINANCIAL COMMENTS

PROFITABILITY: FAIRLY GOOD

The revenue of SC appears fairly good in its line.

SC’s net profit margin is fairly good.

SC’s return on total assets is fairly good.

SC’s cost of sales is average, 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 appears large.

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

SC’s short-term loans are in an average level in 2013.

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

LEVERAGE: AVERAGE

The debt ratio of SC is low.

The risk for SC to go bankrupt is average.

Overall financial condition of the SC: Fairly Stable.

CONCLUSIONS

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

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.60.53
UK Pound	1	Rs.101.77
Euro	1	Rs.83.92

INFORMATION DETAILS

Analysis Done by :	RAS
Report Prepared by :	NIS

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.