MIRA INFORM REPORT

Report Date :

13.05.2014

IDENTIFICATION DETAILS

Name :	WUGANG TRADING CO. LTD.

Registered Office :	Unit 8-11, 37/F., Tower 1, Lippo Centre, 89 Queensway,

Country :	Hong Kong

Date of Incorporation :	25.04.1997

Com. Reg. No.:	20928040

Legal Form :	Private Limited Company

Line of Business :	Importer, Exporter and Wholesaler of all kinds of iron & steel materials and products

No. of Employees	15

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 :	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)

Hong Kong

Risk Category	ECGC Classification
Insignificant	A1
Low Risk	A2
Moderately Low Risk	B1
Moderate Risk	B2
Moderately High Risk	C1
High Risk	C2
Very High Risk	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 has no tariffs on imported goods, and it levies excise duties on only four commodities, whether imported or produced locally: 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, its continued reliance on foreign trade and investment leaves it vulnerable to renewed global financial market volatility or a slowdown in the global economy. 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 12% of total system deposits in Hong Kong by the end of 2013. 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 total trade 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. Credit expansion and tight housing supply conditions have caused Hong Kong property prices to rise rapidly; consumer prices increased by more than 4% in 2013. 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. In 2013, Hong Kong and China signed new agreements under the Closer Economic Partnership Agreement, adopted in 2003 to forge closer ties between Hong Kong and the mainland. The new measures, effective from January 2014, cover services and trade facilitation, and will improve access to the mainland's service sector for Hong Kong-based companies

Source : CIA

Company name and address

WUGANG TRADING CO. LTD.

ADDRESS: Unit 8-11, 37/F., Tower 1, Lippo Centre, 89 Queensway, Hong Kong.

PHONE: 852-2542 0288

FAX: 852-2530 2206

E-MAIL: wugang@netvigator.com

wiscohk@126.com

MANAGEMENT

Managing Director: Mr. Zhou Xueying

SUMMARY

Incorporated on: 25th April, 1997.

Organization: Private Limited Company.

Capital: Nominal: HK$1,000,000.00

Issued: HK$100,000.00

Business Category: Importer, Exporter and Wholesaler.

Employees: 15. (Including associates)

Main Dealing Banker: The Hongkong & Shanghai Banking Corp. Ltd., Hong Kong.

Banking Relation: Very Good.

Company name and address

WUGANG TRADING CO. LTD.

ADDRESS:

Registered Head Office:-

Unit 8-11, 37/F., Tower 1, Lippo Centre, 89 Queensway, Hong Kong.

Holding Company:-

International Economic & Trading Corporation Wugang Group, China.

Ultimate Holding Company:-

Wuhan Iron & Steel (Group) Corporation, China.

Associated Companies:-

Cheerwu Traders Ltd., Hong Kong.

Guangxi Iron & Steel Group Co. Ltd., China.

Wisco (India) Pvt. Ltd., India.

Wisco America Co. Ltd., US.

Wisco Canada Co. Ltd., Canada.

Wisco Echeng Iron & Steel Co. Ltd., China.

Wisco Europe GmbH, Germany.

Wisco Global Inc., US.

Wisco Japan Corp. Ltd., Japan.

Wisco Korea Corporation Ltd., Korea.

Wisco Kunming Iron & Steel Co. Ltd., China.

Wisco Shipping Co. Ltd., Hong Kong.

Wugang (Australia) Pty. Ltd., Australia.

Wuhan Iron & Steel Co. Ltd., China.

BUSINESS REGISTRATION NUMBER

20928040

COMPANY FILE NUMBER

0605529

MANAGEMENT

Managing Director: Mr. Zhou Xueying

CAPITAL

Nominal Share Capital: HK$1,000,000.00 (Divided into 1,000,000 shares of HK$1.00 each)

Issued Share Capital: HK$100,000.00

SHAREHOLDER

(As per registry dated 25-04-2013)

Name		No. of shares
International Economic & Trading Corporation Wugang Group 741-1 Heping Street, Qingshan, Wuhan (420081), China.		100,000 ======

Name

No. of shares

International Economic & Trading Corporation Wugang Group

741-1 Heping Street, Qingshan, Wuhan (420081), China.

100,000

======

DIRECTORS

(As per registry dated 17-09-2013)

Name (Nationality)	Address
DONG Weiping	Room 7, Block 22, 120 Ganghua Village, Qingshan District, Wuhan, China.
LIU Xinhua	Building 3, Flat 1.,#502, Industrial#2 Road, Qingshan District, Wuhan, China.
WU Shengbiao	No.7, Entrance 144, Apartment Block 126, Gangdu Huayuan, Qingshan District, Wuhan, China.
LEI Ronghua	20-67-7 Xingouqiao, Qingshan District, Wuhan, China.
ZHOU Xue Ying	Flat F, 4/F., Yat Tien Mansion, 18B Taikoo Shing Road, Taikoo Shing, Hong Kong.
DENG Qilin	No.14 106 Men, 116 Jie Fang, Gang Hua Cun, Qing Shan Qu, Wu Han Shi, China.

SECRETARY

(As per registry dated 03-09-2013)

Name	Address	Co. No.
Tricor Secretaries Ltd.	Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong.	0014900

HISTORY

The subject was incorporated on 25th April, 1997 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: Importer, Exporter and Wholesaler.

Lines: All kinds of iron & steel materials and products.

Employees: 15. (Including associates)

Commodities Imported: China, Asian countries, Russia, India, etc.

Markets: China, Asian countries, Europe, etc.

Terms/Sales: As per contracted.

Terms/Buying: Various terms.

FINANCIAL INFORMATION

Nominal Share Capital: HK$1,000,000.00 (Divided into 1,000,000 shares of HK$1.00 each)

Issued Share Capital: HK$100,000.00

Indebtedness: US$367,794,288.49 (Total amount outstanding on all mortgages and charges as per last Annual Return dated 25-04-2013)

Mortgage or Charge (since 2013): (See attachment)

Profit or Loss: Making a small profit every year.

Condition: Keeping in a satisfactory manner.

Facilities: Making rather active use of general banking facilities.

Payment: Met trade commitments as required.

Commercial Morality: Satisfactory.

Bankers:-

The Hongkong & Shanghai Banking Corp. Ltd., Hong Kong.

Standard Chartered Bank (Hong Kong) Ltd., Hong Kong.

Standing: Good.

GENERAL

Wugang Trading Co., Ltd. is a wholly-owned subsidiary of International Economic & Trading Corporation Wugang Group [Wugang IETC], a China-based company. The ultimate holding company of the subject was Wuhan Iron & Steel (Group) Corporation, also a China-based company.

The Group has had a main associated company known as Wuhan Iron & Steel Co. Ltd. [Wisco] which is a listed company in China. Wisco was listed on Shanghai Stock Exchange bearing stock code 600005.

Wugang IETC was set up on 31st December, 1993. It is trading in the following commodities:

Iron & steel products, minerals, iron ore, coal and coke, alloy, metal materials, cables and wires, building materials, refectories, machinery & equipment, instruments & metres, chemicals, LPG, etc.

The subject also trades in the same commodities, more or less.

The general manager of Wugang IETC Wu Shengbiao is also one of the directors of the subject. He is also the purchasing director of the Wugang Group.

Now, Wugang IETC has set up representative offices or associated companies in Germany, Japan, Australia, India, South Korea, the United States, Canada, etc.

Wisco was founded in 1955. So far, it has become a backbone state-owned enterprise under the State Council and the State-owned Assets Supervision and Administration Commission (SASAC).

After merging and reorganizing Ezhou Iron & Steel Co., Ltd., Liuzhou Iron & Steel Co., Ltd., and Kunming Iron & Steel Co., Ltd., Wisco has grown into a giant enterprise group with annual output exceeding 40 million tons of iron and steel, and ranked 4th among its counterparts around the world. In 2010, WISCO realized total operating income of RMB190.7 billion Yuan and total assets of RMB203.8 billion Yuan, ranking the 340th among the Fortune 500 companies.

Nowadays, Wisco mainly is engaged in three industries including iron and steel, hi-tech industries, and international trade. Its iron and steel products comprise hundreds of varieties such as hot-rolled coil, hot-rolled section steel, hot-rolled heavy rail, plate of moderate thickness, cold-rolled coil, galvanized plate, cold-rolled oriented and non-oriented silicon steel sheet, colour coated plate, and high-speed wire rod, etc.

The Group’s “Wugang Brand” has been recognized as a well-known brand in China. According to the report issued by the World Brand Lab, the “Wugang Brand”, with a total brand value of RMB17.052 billion Yuan, ranks the 56th among famous brands in the world.

In 2013, the revenues of Wisco was RMB89,581.3 million Yuan (2012: RMB91,579.4 million Yuan), profit attributable to shareholders were RMB427.2 million Yuan (2012: RMB210.0 million Yuan).

The subject is fully supported by Wugang IETC and ultimately by Wugang Group.

As the history of the subject is over 17 years in Hong Kong, on the whole, consider it good for normal business engagements.

MORTGAGE OR CHARGE

(Since 2013)

Date	Particulars	Amount
14-03-2013	Instrument: Trade Finance Security Assignment (All Moneys) (Own Obligations) Property: 1) By way of fixed charge all the chargor’s right, title, interest and benefit from time to time in and to any amount standing to the credit of the charged account and the debt represented by it 2) By way of assignment, all the Chargor’s right, title, interest and benefit from time to time in and to the Assigned Assets Mortgagee: Standard Chartered Bank (Hong Kong) Ltd., Hong Kong.	All obligations and liabilities
18-07-2013	Instrument: Trade Finance Security Assignment Property: The Borrower as beneficial owner:- (A) Assigns and agrees to assign absolutely to the Bank all the present and future rights, title, interests and benefits of the Borrower in and to the following assets:- 1) The export credit; 2) The export collection bills; 3) The sales contracts; 4) The Invoice receivables; 5) The purchase Contracts; 6) The Insurances; 7) The trade documents; 8) The bills of exchange; 9) The related collaterals; and 10) All claims, remedies & proceeds in connection with any of the foregoing (B) Charges and agrees to charge to the bank by way of first fixed charge all the present and future rights, title, interests and benefits of the Borrower in and to the following assets:- 1) The goods together with their proceeds; 2) The deposits; and 3) To the extent any security assets is not effectively assigned under sub-clause, such security asset; (C) Pledges and agrees to pledge to the bank, the bills of exchange, the pledge goods and the trade documents which are now or may in the future be in actual or constructive possession of the bank; and (D) Charges and agrees to charge to the Bank by way of first floating charge all the present and future rights, title, interest and benefits of the borrower in any security asset which is not effectively charge by way of fixed charge or assigned or pledged under the above sub-clauses(a), (b) and (c). Mortgagee: The Hongkong & Shanghai Banking Corp. Ltd., Hong Kong.	All monies, obligations and liabilities

Date

Particulars

Amount

14-03-2013

Instrument: Trade Finance Security Assignment (All Moneys) (Own Obligations)

Property:

1) By way of fixed charge all the chargor’s right, title, interest and benefit from time to time in and to any amount standing to the credit of the charged account and the debt represented by it

2) By way of assignment, all the Chargor’s right, title, interest and benefit from time to time in and to the Assigned Assets

Mortgagee: Standard Chartered Bank (Hong Kong) Ltd., Hong Kong.

All obligations and liabilities

18-07-2013

Instrument: Trade Finance Security Assignment

Property:

The Borrower as beneficial owner:-

(A) Assigns and agrees to assign absolutely to the Bank all the present and future rights, title, interests and benefits of the Borrower in and to the following assets:-

1) The export credit;

2) The export collection bills;

3) The sales contracts;

4) The Invoice receivables;

5) The purchase Contracts;

6) The Insurances;

7) The trade documents;

8) The bills of exchange;

9) The related collaterals; and

10) All claims, remedies & proceeds in connection with any of the foregoing

(B) Charges and agrees to charge to the bank by way of first fixed charge all the present and future rights, title, interests and benefits of the Borrower in and to the following assets:-

1) The goods together with their proceeds;

2) The deposits; and

3) To the extent any security assets is not effectively assigned under sub-clause, such security asset;

(C) Pledges and agrees to pledge to the bank, the bills of exchange, the pledge goods and the trade documents which are now or may in the future be in actual or constructive possession of the bank; and

(D) Charges and agrees to charge to the Bank by way of first floating charge all the present and future rights, title, interest and benefits of the borrower in any security asset which is not effectively charge by way of fixed charge or assigned or pledged under the above sub-clauses(a), (b) and (c).

Mortgagee: The Hongkong & Shanghai Banking Corp. Ltd., Hong Kong.

All monies, obligations and liabilities

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.59.72
UK Pound	1	Rs.100.81
Euro	1	Rs.82.22

INFORMATION DETAILS

Analysis Done by :	SUB

Report Prepared by :	PDT

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.