MIRA INFORM REPORT

Report Date :

24.12.2014

IDENTIFICATION DETAILS

Name :	HUNAN MM (Cotton & Bast-Fibre) CORPORATION LTD.
Registered Office :	11/F, Yinhua Building, No. 618, Wuyi Avenue, Furong District, Changsha, Hunan Province, 410011 Pr
Country :	China
Financials (as on) :	31.12.2013
Date of Incorporation :	30.06.1994
Com. Reg. No.:	430000000073659
Legal Form :	Shares Limited Co.
Line of Business :	purchasing cotton, manufacturing, processing and selling cotton, linen and its products; selling hardware, electrical, chemical industry (excluding dangerous goods), machinery and equipment, merchandise and agricultural and sideline products policies allowed, metal materials; importing and exporting goods and technologies.
No. of Employee :	57

RATING & COMMENTS

MIRA’s Rating :

B

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	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, 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 & address

HUNAN MM (Cotton & Bast-Fibre) CORPORATION LTD.

11/F, YINHUA BUILDING, NO. 618, WUYI AVENUE, FURONG DISTRICT, CHANGSHA, HUNAN PROVINCE, 410011 PR CHINA

TEL: 86 (0) 731-82253050/84412546 FAX: 86 (0) 731-84412546

EXECUTIVE SUMMARY

INCORPORATION DATE : JUNE 30, 1994

REGISTRATION NO. : 430000000073659

REGISTERED LEGAL FORM : SHARES LIMITED CO.

CHIEF EXECUTIVE : MR. GAN hao (CHAIRMAN)

STAFF STRENGTH : 57

REGISTERED CAPITAL : CNY 50,000,000

BUSINESS LINE : trading

TURNOVER : CNY 1,114,080,000 (AS OF DEC. 31, 2013)

EQUITIES : CNY 68,030,000 (AS OF DEC. 31, 2013)

PAYMENT : AVERAGE

MARKET CONDITION : competitive

FINANCIAL CONDITION : FAIRly stable

OPERATIONAL TREND : steady

GENERAL REPUTATION : AVERAGE

EXCHANGE RATE : CNY 6.2254= USD 1

Adopted abbreviations:

ANS - amount not stated NS - not stated SC - subject company (the company inquired by you)

NA - not available CNY - China Yuan Renminbi

Note: SC’s complete name should be the heading one.

SC was registered as a Shares limited co. at Hunan Provincial Administration for industry & commerce (AIC - the official body of issuing and renewing business license).

Company Status: Shares limited co.

This form of business in PR China is defined as a legal person. Its registered capital is divided into shares of equal par value and the co. raises capital by issuing share certificates by promotion or by public offer. Shareholders bear limited liability to the extent of shareholding, and the co. is liable for its debts only to the extent of its total assets. The co has independent property of legal person and enjoys property rights of legal person. The characteristics of the shares limited co. are as follows:

The establishment of the co. requires at least two promoters and no more than 200, half of whom shall be domiciled in China.. Natural person are allowed to serve as promoters.

The minimum registered capital of a co. is CNY 5M. while that of the co. with foreign investment is CNY 5M. The total capital of a co. which propose to apply for publicly listed must be no less than CNY 30M.

The board of directors must consist of five to nineteen directors.

If the co. raises capital by public offer, the promoters must not subscribe less than 35% of the total shares. the promoters’ shares are restricted to transfer- within one year of the offer.

A state-owned enterprise that is restructured into a shares limited co. must comply with the conditions & requirements specified under the law & administrative rule.

SC’s registered business scope includes purchasing cotton, manufacturing, processing and selling cotton, linen and its products; selling hardware, electrical, chemical industry (excluding dangerous goods), machinery and equipment, merchandise and agricultural and sideline products policies allowed, metal materials; importing and exporting goods and technologies.

SC is mainly engaged in selling cotton, linen and its products.

Mr. Gan Hao has been the legal representative and chairman of SC since December of 2001.

SC is known to have approx. 57 employees at present.

SC is currently operating at the above stated address, and this address houses its operating office in the commercial zone of Changsha. Our checks reveal that SC rents the total premise, but the gross area of the premise is unspecific.

http://www.hnmmgf.com/ The design is professional and the content is well organized. At present it is in Chinese version.

E-mail: hmgf1108@163.com

Changes of its registered information are as follows:

Date of change	Item	Before the change	After the change
Unknown	Shareholder’s name	Hunan Yinyang Textile Co., Ltd.	Hunan Yinyang MM Textile Group Co., Ltd. (in Chinese Pinyin)

Organization code: 183790227

For the past two years there is no record of litigation.

MAIN SHAREHOLDERS:

Name % of Shareholding

Hunan Yinyang MM Textile Group Co., Ltd. (in Chinese Pinyin) 17.2

Gan Hao 6.5

Wang Youguo 6

Jia Yi 5.5

Zhu Xiangqian 5.4

Wen Jigui 5

Zeng Xianxiao 5

Guo Keliang 4.2

Liao Lixin 4

Cai Zhonghua 3.8

Other 7 Shareholders 37.4

Hunan Yinyang MM Textile Group Co., Ltd. (in Chinese Pinyin)

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

Registration no.: 430700000000566

Registered capital: CNY 40,560,000

Legal rep.: Wang Guoping

Legal form: Shares limited co.

Legal representative and Chairman:

Mr. Gan Hao, born in 1951. He is currently responsible for the overall management of SC.

Working Experience(s):

From December of 2001 to present Working in SC as legal representative and chairman.

Directors:

Liu Renjun

He Yuegang

Wang Dilong

Wang Youguo

Jia Yi

Ye Mingli

Yan Wenjian

Supervisors:

Luo Qi

Bao Hanwen

Cai Zhonghua

SC is mainly engaged in selling cotton, linen and its products.

SC’s products mainly include cotton, linen and its products.

SC sources its materials 100% from domestic market. SC sells 100% of its products in domestic market.

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

Trademark & Patents

No record

Note: SC’s management declined to release its major clients and suppliers.

SC is known to invest in the following companies:

Kezhou Hongjian Cotton Co., Ltd. (in Chinese Pinyin)

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

Incorporation date: 2005-8-31

Registration no.: 653022050000216

Registered capital: CNY 21,000,000

Legal rep.: Lei Qiyu

Legal form: One-person Limited Liability Company

Tel/Fax: 0908-5781333

Anxiang Changsheng Cotton Co., Ltd.

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

Incorporation date: 2004-10-22

Registration no.: 430721000002460

Registered capital: CNY 1,000,000

Legal rep.: Zhang Tianming

Legal form: Limited liabilities co.

Tel/Fax: 0736-4308186

Zhangjiagang Free Trade Zone Xianghao International Trade Co., Ltd. (in Chinese Pinyin)

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

Incorporation date: 2010-11-25

Registration no.: 320592000050814

Registered capital: CNY 8,000,000

Legal rep.: Jia Yi

Legal form: One-person Limited Liability Company

Tel: 0512-55379086

Fax: 0512-55379085

Overall payment appraisal: ( ) Excellent ( ) Good (X) Average ( ) Fair ( ) Poor ( ) Not yet 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.

SC’s management declined to release the bank information of SC.

Financial Information

Unit: CNY’000

	as of Dec. 31, 2013
Total liabilities	613,550
Equities	68,030
	--------------
Total assets	681,580
	=========
Turnover	1,114,080
Cost of goods sold	1,082,750
Taxes and additional of main operation	130
Profit before tax	5,360
Profit tax	1,380
Profits	3,980

Note: SC’s accountant refused to release the detailed financial reports for Yr2013.

Important Ratios

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

	as of Dec. 31, 2013
*Liabilities to assets	0.90
*Net profit margin (%)	0.36
*Return on total assets (%)	0.58
*Turnover/Total assets	1.63
* Cost of goods sold/Turnover	0.97

PROFITABILITY: AVERAGE

The turnover of SC appears good in its line.

SC’s net profit margin is average.

SC’s return on total assets is average.

SC’s cost of goods sold is high, comparing with its turnover.

SC’s turnover is in an average 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 average.

Overall financial condition of the SC: Fairly stable.

SC is considered medium-sized in its line with fairly stable financial conditions.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.63.45
UK Pound	1	Rs.98.88
Euro	1	Rs.77.62

INFORMATION DETAILS

Analysis Done by :	DIV
Report Prepared by :	TPT

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.