MIRA INFORM REPORT

Report Date :

30.09.2014

IDENTIFICATION DETAILS

Name :	ZIBO INTERNATIONAL ECONOMIC AND TECHNICAL COOP. CO., LTD.

Registered Office :	4/F International Trade Mansion, No. 107 Liuquan Road, Zhangdian District, Zibo City, Shandong Province 255000 PR

Country :	China

Financials (as on) :	31.12.2013

Date of Incorporation :	25.06.1993

Com. Reg. No.:	370300228067036

Legal Form :	Limited Liabilities Company

Line of Business :	Importing and exporting commodities and technology; storage services, and house leasing.

No of Employees :	35

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 – June 1, 2014

Country Name

Previous Rating

(31.03.2014)

Current Rating

(01.06.2014)

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 & ADDRESS

ZIBO INTERNATIONAL ECONOMIC AND TECHNICAL COOP. CO., LTD.

4/F INTERNATIONAL TRADE MANSION, NO. 107 LIUQUAN ROAD

ZHANGDIAN DISTRICT, ZIBO CITY, SHANDONG PROVINCE 255000 PR CHINA

TEL: 86 (0) 533-6280852/6280822

FAX: 86 (0) 533-3185144

EXECUTIVE SUMMARY

Date of Registration : JUNE 25, 1993

REGISTRATION NO. : 370300228067036

LEGAL FORM : Limited liabilities company

CHIEF EXECUTIVE : WU BAOPING (LEGAL REPRESENTATIVE)

REGISTERED CAPITAL : CNY 5,000,000

staff : 35

BUSINESS CATEGORY : TRADING

Revenue : CNY 10,840,000 (AS OF DEC. 31, 2013)

EQUITIES : CNY 1,810,000 (AS OF DEC. 31, 2013)

WEBSITE : www.zietc.com

E-MAIL : zbgj@zietc.com

PAYMENT : AVERAGE

MARKET CONDITION : AVERAGE

FINANCIAL CONDITION : FAIR

OPERATIONAL TREND : ORDINARY

GENERAL REPUTATION : AVERAGE

EXCHANGE RATE : CNY 6.13 = 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.: 370300228067036 on June 25, 1993.

SC’s Organization Code Certificate No.: 16410546-6

SC’s Tax No.: 370303164105466

SC’s registered capital: CNY 5,000,000

SC’s paid-in capital: CNY 5,000,000

Registration Change Record:-

Date	Change of Contents	Before the change	After the change
--	Registration No.	3703002806703	370300228067036
	Registered Capital	cny 5,001,800	CNY 5,000,000
	Shareholder (s) (% of Shareholding)	Wu Baoping 88.40% Tian Chengfu 1.54% Other 18 individuals 10.06%	Wu Baoping 89.046% Tian Chengfu 1.54% Wang Youzhong 1.20% Fan Xinli 1.20% Wang Changlian 0.72% Other individuals 6.294%

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

Name of Shareholder (s)	% of Shareholding
Wu Baoping	89.046
Tian Chengfu	1.54
Wang Youzhong	1.20
Fan Xinli	1.20
Wang Changlian	0.72
Other 15 individuals	6.294

SC’s Chief Executives:-

Position	Name
Legal Representative, Chairman, and General Manager	Wu Baoping
Director	Gong Yuegeng
	Wang Youzhong
	Fan Xinli
Supervisor	Shao Bo
	Yu Keping
	Yang Qifu

RECENT DEVELOPMENT

No recent development was found during our checks at present.

SHAREHOLDER CHART & BACKGROUND

Name % of Shareholding

Wu Baoping 89.046

Tian Chengfu 1.54

Wang Youzhong 1.20

Fan Xinli 1.20

Wang Changlian 0.72

Other 15 individuals 6.294

MANAGEMENT

Wu Baoping, Legal Representative, Chairman and General Manager

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

Gender: M

Age: 54

Nationality: China

Working experience (s):

At present, working in SC as legal representative, chairman and general manager

Director

----------

Gong Yuegeng

Wang Youzhong

Fan Xinli

Supervisor

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

Shao Bo

Yu Keping

Yang Qifu

BUSINESS OPERATION

SC’s registered business scope includes importing and exporting commodities and technology; storage services, and house leasing.

SC is mainly engaged in international trade.

SC’s products mainly include: ceramic products & glass products.

SC sources its products 80% from domestic market, mainly Shandong province, and 20% from overseas market. SC sells 1% of its products in domestic market, mainly Shandong province, and 99% to overseas market, mainly Southeast Asia, Europe, and U.S.A.

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

*Major Customers*

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

Fwi Corporation

Modern Houseware Imp. Inc.

*Major Supplier*

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

Zibo Jingyu Ceramic Co., Ltd.

Staff & Office:

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

SC is known to have approx. 35 staff at present.

SC rents an area as its operating office of approx. 350 sq. meters at the heading address.

RELATED COMPANY

Related Company,

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

Zibo Zhongzi International Economic & Technical Coop. Corp. Ltd.

Registration No.: 370300228061213

Date of Registration: March 25, 2004

Legal Representative: Wu Shaofeng

SC is known to have the following office & branch,

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

Zibo International Economic and Technical Coop. Co., Ltd. Zhangdian Transportation Office

Registration No.: 370303300001245

Date of Registration: July 2, 2009

Principal: Tian Chengfu

Zibo International Economic and Technical Coop. Co., Ltd. Zhangdian Branch

Registration No.: 370303300001253

Date of Registration: July 2, 2009

Principal: Gong Rigeng

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: A trade enquiry currently conducted with SC's supplier(s) reveal the following:

Supplier A

Products sold: ceramic products

Date account opened: Since 2009

Line of credit: N/A

Terms: 30-60 days

Average monthly sales: N/A

Current balance: N/A

Rating Key : 3

Payment record keys :

1 = Prompt : Payment made before the credit period expires

2 = As agreed terms : Payment made upon due date

3 = Slightly slow but acceptable : Payment made 5 to 20 days beyond agreed terms

4 = Slow : Payment made 16 to 45 days beyond agreed terms

5 = Poor : Payment made over 45 days beyond agreed terms

6 = No comment : Account is newly opened & record is not yet established

Note : In some instances, payment beyond terms can be the result of disputes over merchandise, lost invoices, disputed accounts & etc.

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 Communications

AC#: 373010602018010055046

Bank of China Zibo Branch

AC#: N/a

FINANCIALS

Balance Sheet

Unit: CNY’000	As of Dec. 31, 2009	As of Dec. 31, 2010	As of Dec. 31, 2011	As of Dec. 31, 2012	As of Dec. 31, 2013
Cash	680	-110	230	435	56
Accounts receivable	5,240	9,980	4,350	6,242	3,940
Advances to suppliers	70	1,110	1,340	231	63
Other receivable	-710	610	-270	733	1,680
Inventory	470	1,100	5,510	4,165	2,935
Non-current assets within one year	0	0	0	0	0
Other current assets	2,020	-1,100	6,250	2,801	-459
	---------------	--------------	--------------	--------------	--------------
Current assets	7,770	11,590	17,410	14,607	8,215
Fixed assets	220	770	650	442	685
Construction in progress	0	0	0	0	0
Intangible assets	0	0	0	0	0
Long-term prepaid expenses	0	0	0	0	0
Deferred income tax assets	0	0	0	0	0
Other non-current assets	0	0	0	0	0
	---------------	--------------	--------------	--------------	--------------
Total assets	7,990	12,360	18,060	15,049	8,900
	=========	========	========	========	========
Short-term loans	0	0	0	0	1,500
Notes payable	0	0	0	0	0
Accounts payable	3,330	7,460	13,680	8,912	3,717
Accrued payroll	0	0	0	0	0
Welfare payable	70	60	0	0	0
Tax payable	-170	-180	-730	-201	-96
Advances from clients	70	110	-10	262	-2
Other payable	520	1,930	1,270	2,779	1,971
Other current liabilities	0	0	0	0	0
	---------------	--------------	--------------	--------------	--------------
Current liabilities	3,820	9,380	14,210	11,752	7,090
Non-current liabilities	0	0	0	0	0
	---------------	--------------	--------------	--------------	--------------
Total liabilities	3,820	9,380	14,210	11,752	7,090
Equities	4,170	2,980	3,850	3,297	1,810
	---------------	--------------	--------------	--------------	--------------
Total liabilities & equities	7,990	12,360	18,060	15,049	8,900
	=========	========	========	========	========

Income Statement

Unit: CNY’000	As of Dec. 31, 2009	As of Dec. 31, 2010	As of Dec. 31, 2011	As of Dec. 31, 2012	As of Dec. 31, 2013
Revenue	35,930	11,750	21,830	13,229	10,840
Cost of sales	34,410	10,300	18,020	11,509	8,710
Business Taxes and Surcharges	20	40	0	17	20
Sales expense	690	860	1,320	835	1,220
Management expense	1,490	2,320	3,150	1,264	2,780
Finance expense	0	2	0	0	30
Income from other operations	440	550	--	--	--
Non-operating income	0	32	--	--	--
Profit before tax	-240	-1,190	-90	-396	-1,470
Less: profit tax	0	0	0	36	0
Profits	-240	-1,190	-90	-432	-1,470

Important Ratios

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

	2009	2010	2011	2012	2013
*Current ratio	2.03	1.24	1.23	1.24	1.16
*Quick ratio	1.91	1.12	0.84	0.89	0.74
*Liabilities to assets	0.48	0.76	0.79	0.78	0.80
*Net profit margin (%)	-0.67	-10.13	-0.41	-3.27	-13.56
*Return on total assets (%)	-3.00	-9.63	-0.50	-2.87	-16.52
*Inventory / Revenue ×365	5 days	35 days	93 days	115 days	99 days
*Accounts receivable / Revenue ×365	54 days	311 days	73 days	173 days	133 days
*Revenue / Total assets	4.50	0.95	1.21	0.88	1.22
*Cost of sales / Revenue	0.96	0.88	0.83	0.87	0.80

FINANCIAL COMMENTS

PROFITABILITY: FAIR

The revenue of SC appears average in its line.

SC’s net profit margin is fair in five years.

SC’s return on total assets is fair in five years.

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

LIQUIDITY: AVERAGE

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

SC’s quick ratio is maintained in a normal in 2011 & 2012 & 2013.

The inventory of SC appears large in 2012 and 2013.

The accounts receivable of SC appears large in 2012 and 2013.

The short-term loans of SC appear average in 2013.

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

LEVERAGE: FAIR

The debt ratio of SC is average.

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.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.61.43
UK Pound	1	Rs.99.73
Euro	1	Rs.77.93

INFORMATION DETAILS

Analysis Done by :	KAR

Report Prepared by :	SMN

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.