MIRA INFORM REPORT

Report Date :

10.12.2014

IDENTIFICATION DETAILS

Name :	HUIZHOU FULIYUAN MACHINERY CO., LTD.

Registered Office :	Yifa No. 3 Road, Pingtan Town, Huizhou City Guangdong Province 516259 PR

Country :	China

Financials (as on) :	31.12.2013

Date of Incorporation :	09.06.2011

Com. Reg. No.:	441381000059799

Legal Form :	Limited Liability Company

Line of Business :	Subject includes manufacturing and selling EPE foam machine, stretch film machine, stretch film machine, plastic sheet film machine, extruders, packaging materials; goods import and export.

No. of Employees :	40

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Status :	Moderate
Payment Behaviour :	Slow but correct
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 – September 30, 2014

Country Name

Previous Rating

(30.06.2014)

Current Rating

(30.09.2014)

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, growth of the private sector, development of stock markets and a modern banking system, 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 considered important to "economic security," explicitly looking to foster globally competitive industries. After keeping its currency tightly linked to the US dollar for years, in July 2005 China 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 and expanded the daily trading band within which the RMB is permitted to fluctuate. 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. Several factors are converging to slow China's growth, including debt overhang from its credit-fueled stimulus program, industrial overcapacity, inefficient allocation of capital by state-owned banks, and the slow recovery of China's trading partners. The government's 12th Five-Year Plan, adopted in March 2011 and reiterated at the Communist Party's "Third Plenum" meeting in November 2013, emphasizes continued economic reforms and the need to increase domestic consumption in order to make the economy less dependent in the future on fixed investments, exports, and heavy industry. 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

HUIZHOU FULIYUAN MACHINERY CO., LTD.

YIFA NO. 3 ROAD, PINGTAN TOWN, HUIZHOU CITY

GUANGDONG PROVINCE 516259 PR CHINA

TEL: 86 (0) 752-3646128

FAX: 86 (0) 752-3595450/3646128*8009

EXECUTIVE SUMMARY

DATE OF REGISTRATION : JUNE 9, 2011

REGISTRATION NO. : 441381000059799

LEGAL FORM : LIMITED LIABILITY COMPANY

CHIEF EXECUTIVE : YI CHUNXIANG (LEGAL REPRESENTATIVE)

REGISTERED CAPITAL : CNY 3,000,000

STAFF : 40

BUSINESS CATEGORY : MANUFACTURING & TRADING

Revenue : CNY 10,033,000 (AS OF DEC. 31, 2013)

EQUITIES : CNY 2,260,000 (AS OF DEC. 31, 2013)

WEBSITE : www.szfuliyuan.com

E-MAIL : machine@szfuliyuan.net

PAYMENT : AVERAGE

MARKET CONDITION : average

FINANCIAL CONDITION : fair

OPERATIONAL TREND : ORDINARY

GENERAL REPUTATION : AVERAGE

EXCHANGE RATE : CNY 6.15 = 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 limited liabilities company of PRC with State Administration of Industry & Commerce (SAIC) under registration No.: 441381000059799 on June 9, 2011.

SC’s Organization Code Certificate No.: 57648014-X

SC’s Tax No.: 44138157648014X

SC’s registered capital: CNY 3,000,000

SC’s paid-in capital: CNY 3,000,000

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

Yi Chunxiang

Jiang Yingjian

SC’s Chief Executives:-

Position	Name
Legal Representative, Chairman, and General Manager	Yi Chunxiang
Supervisor	Jiang Yingjian

RECENT DEVELOPMENT

No recent development was found during our checks at present.

SHAREHOLDER CHART & BACKGROUND

Name % of Shareholding

Yi Chunxiang 45

Jiang Yingjian 55

MANAGEMENT

Yi Chunxiang , Legal Representative, Chairman and General Manager

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

Gender: F

Age: 44

ID# 320423197003115026

Qualification: University

Working experience (s):

From 2011 to present, working in SC as legal representative, chairman and general manager

Jiang Yingjian , Supervisor

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

Gender: M

BUSINESS OPERATION

SC’s registered business scope includes manufacturing and selling EPE foam machine, stretch film machine, stretch film machine, plastic sheet film machine, extruders, packaging materials; goods import and export.

SC is mainly engaged in manufacturing and selling machinery and equipment.

Brand: FLY

SC’s products mainly include:

PE foam extruder machine

PE stretch film extrusion machine

PS foam sheet extrusion machine

PE Blowing Machine

Plastic Recycling Machine

Printing Machine

SC sources its materials 100% from domestic market, mainly Guangdong. SC sells 65% of its products in domestic market, and 35% to overseas market, mainly Mid East, Afrika, Southeast Asia, etc.

The buying terms of SC include Check, T/T and Credit of 30-60 days. The payment terms of SC include T/T, L/C and Credit of 30-60 days.

Staff & Office:

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

SC is known to have approx. 40 staff at present.

SC rents an area as its operating office & factory of approx. 5,000 sq. meters at the heading address.

RELATED COMPANY

SC is not known to have any subsidiary at present.

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:

Agricultural Bank of China Pingtan Sub-branch

AC#: 44232401040002701

FINANCIALS

Balance Sheet

Unit: CNY’000	As of Dec. 31, 2012	As of Dec. 31, 2013
Cash	164	274
Notes receivable	0	0
Accounts receivable	0	1,352
Advances to suppliers	3,983	1,285
Other receivable	0	4
Inventory	0	2,643
Non-current assets within one year	0	0
Other current assets	0	0
	------------------	------------------
Current assets	4,147	5,558
Fixed assets	626	3,775
Construction in progress	0	177
Intangible assets	2,351	2,317
Long-term prepaid expenses	0	0
Deferred income tax assets	0	0
Other non-current assets	0	0
	------------------	------------------
Total assets	7,124	11,827
	=============	=============
Short-term loans	0	0
Notes payable	0	0
Accounts payable	0	265
Wages payable	0	60
Taxes payable	0	-346
Advances from clients	0	1,750
Other payable	4,433	7,838
Other current liabilities	0	0
	------------------	------------------
Current liabilities	4,433	9,567
Non-current liabilities	0	0
	------------------	------------------
Total liabilities	4,433	9,567
Equities	2,691	2,260
	------------------	------------------
Total liabilities & equities	7,124	11,827
	=============	=============

Income Statement

Unit: CNY’000	As of Dec. 31, 2013
Revenue	10,033
Cost of sales	8,789
Taxes and surcharges	12
Sales expense	1,005
Management expense	633
Finance expense	8
Profit before tax	-409
Less: profit tax	22
Profits	-431

Important Ratios

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

	As of Dec. 31, 2012	As of Dec. 31, 2013
*Current ratio	0.94	0.58
*Quick ratio	0.94	0.30
*Liabilities to assets	0.62	0.81
*Net profit margin (%)	--	-4.30
*Return on total assets (%)	--	-3.64
*Inventory / Revenue ×365	--	97 days
*Accounts receivable/ Revenue ×365	--	50 days
*Revenue/Total assets	--	0.85
*Cost of sales / Revenue	--	0.88

FINANCIAL COMMENTS

PROFITABILITY: FAIR

The revenue of SC appears average in its line.

SC’s net profit margin is fair.

SC’s return on total assets is fair.

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

LIQUIDITY: FAIR

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

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

The inventory of SC appears large.

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

SC has no short-term loans.

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

LEVERAGE: FAIR

The debt ratio of SC is high.

The risk for SC to go bankrupt is above average.

Overall financial condition of the SC: Fair.

CONCLUSIONS

SC is considered small-sized in its line with fair 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.61.88
UK Pound	1	Rs.96.90
Euro	1	Rs.76.29

INFORMATION DETAILS

Analysis Done by :	SUM

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.