MIRA INFORM REPORT

Report No. :	356782
Report Date :	28.12.2015

IDENTIFICATION DETAILS

Name :	DANDONG WUXING CHEMICAL FIBRE AND TEXTILE (GROUP) CO., LTD.
Registered Office :	No. 58, Xianwei Street, Zhenxing District, Dandong City, Liaoning Province, 118000 Pr
Country :	China
Financials (as on) :	31.12.2014
Date of Incorporation :	04.11.2008
Com. Reg. No.:	210600004041603
Legal Form :	One-Person Limited Liability Company
Line of Business :	Manufacturing and Processing Viscose Filament Yarn, Viscose Polyester Short Thread, all kinds of Yarn; Import and Export of Goods and Technology.
No. of Employees :	3,700

RATING & COMMENTS

MIRA’s Rating :

Ca

RATING		STATUS	PROPOSED CREDIT LINE
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

Status :	Moderate
Payment Behaviour :	Slow
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, 2015

Country Name	Previous Rating (31.12.2014)	Current Rating (31.03.2015)
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. 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 2014 stood as the largest economy in the world, surpassing the US for the first time in modern history. Still, China's per capita income is below the world average.

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. In 2014 the People’s Bank of China (PBOC) doubled the daily trading band within which the RMB is permitted to fluctuate.

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 2014 more than 274 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. In 2014 China agreed to begin limiting carbon dioxide emissions by 2030. China also implemented several economic reforms in 2014, including passing legislation to allow local governments to issue bonds, opening several state-owned enterprises to further private investment, loosening the one-child policy, passing harsher pollution fines, and cutting administrative red tape.

Source : CIA

Company Name & address

DANDONG WUXING CHEMICAL FIBRE AND TEXTILE (GROUP) CO., LTD.

NO. 58, XIANWEI STREET, ZHENXING DISTRICT, DANDONG CITY,

LIAONING PROVINCE, 118000 PR CHINA

TEL: 86 (0) 415-6192506/6192384 FAX: 86 (0) 415-6192506

EXECUTIVE SUMMARY

INCORPORATION DATE : NOVEMBER 4, 2008

REGISTRATION NO. : 210600004041603

REGISTERED LEGAL FORM : ONE-PERSON LIMITED LIABILITY COMPANY

CHIEF EXECUTIVE : MR. CHEN TIEZENG (CHAIRMAN)

STAFF STRENGTH : 3,700

REGISTERED CAPITAL : CNY 10,200,000

BUSINESS LINE : manufacturing, PROCESSING & TRADING

TURNOVER : CNY 703,020,000 (AS OF DEC. 31, 2014)

EQUITIES : CNY -3,820,000 (AS OF DEC. 31, 2014)

PAYMENT : AVERAGE

MARKET CONDITION : AVERAGE

FINANCIAL CONDITION : Fair

OPERATIONAL TREND : Fair

GENERAL REPUTATION : AVERAGE

EXCHANGE RATE : CNY 6.47= 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 Ren Min Bi

SC was registered as a one-person limited liability company at local Administration for Industry & Commerce (AIC - The official body of issuing and renewing business license) on November 4, 2008.

Company Status: One-person Limited Liability Company

Single person LLC refers to a limited liability company set up by only one natural person or legal person as the single shareholder of it.

The minimum registered capital of Single person LLC is CNY100, 000. The shareholder’s capital contributes, as set out by the articles of associations should be a lump-sum payment in full.

One natural person can only invest in and set up one limited liability company, which is not permitted to invest in and set up a new Single person LLC.

As to any one-person limited liability company, the sole-investor nature of the natural person or legal person shall be indicated in the registration documents of the company and shall be indicated in the business license thereof as well.

The regulation of Single person LLC should be set up by the shareholder

The regulation of Single person LLC has no shareholder meeting.

SC’s registered business scope includes manufacturing and processing viscose filament yarn, viscose polyester short thread, all kinds of yarn; import and export of goods and technology.

SC is mainly engaged in manufacturing, processing and selling viscose products.

Mr. Chen Tiezeng has been the legal representative, chairman and general manager of SC since 2008.

SC is known to have approx. 3,700 employees at present.

SC is currently operating at the above stated address, and this address houses its operating office and factory in the industrial zone of Dandong. Our checks reveal that SC rents the total premise about 4,500 square meters.

SC is not known to host web site of its own at present.

Email: wxfz7816559@163.com

Changes of its registered information:

Date of change	Item	Before the change	After the change
2008-11	Company Name	Dandong Wuxing Chemical Fibre Textile Co., Ltd.	Present one

Organization Code: 680078732

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

MAIN SHAREHOLDER:

Name % of Shareholding

Chen Tiezeng 100

Legal representative, chairman and general manager:

Mr. Chen Tiezeng, born in 1958, is currently responsible for the overall management of SC.

Working Experience(s):

From 2008 to present Working in SC as legal representative, chairman and general manager

Supervisor:

Chen Tiedong

SC is mainly engaged in manufacturing, processing and selling viscose products.

SC’s products mainly include: viscose filament yarn, viscose polyester short thread, all kinds of yarn.

SC sources its materials 80% from domestic market, and 20% from overseas market. SC sells 85% of its products in domestic market, and 15% to the overseas market.

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.

Note: SC refused to release its main customers and supplier

SC is not known to have any subsidiary at present.

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 refused to release any information of its suppliers and the trade reference was not available.

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 refused to release its banking information.

Balance Sheet

Unit: CNY’000

	as of Dec. 31, 2013
Cash & bank	60,430
Short-term investment	55,100
Note receivable	95,620
Inventory	320,780
Accounts receivable	28,560
Other accounts receivable	3,690
Advances to supplies	26,810
Other current assets	0
	------------------
Current assets	590,990
Fixed assets net value	21,560
Projects under construction	1,770
Long-term investments	0
Intangible assets	0
Other assets	0
	------------------
Total assets	614,320
	=============
Short loans	242,090
Accounts payable	127,990
Other accounts payable	17,420
Advances from clients	9,180
Bills payable	16,500
Taxes unpaid	10
Accrued expenses	930
Other current liabilities	0
	-----------------
Current liabilities	414,120
Long term liabilities	140,000
	------------------
Total liabilities	554,120
Shareholders equities	60,200
	------------------
Total liabilities & equities	614,320
	=============

Income Statement

Unit: CNY’000

	as of Dec. 31, 2013
Turnover	761,560
Cost of goods sold	731,780
Taxes and additional of main operation	1,090
Sales expense	12,470
Management expense	32,650
Finance expense	20,400
Other income	2,760
Non-operation income	10
Non-operation expenses	20
Profits before tax	-34,080
Less: profit tax	0
Net profit	-34,080

Financial Summary

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

Unit: CNY’000

	As of Dec. 31, 2014
Total liabilities	489,560
Equities	-3,820
	--------------
Total liabilities & equities	485,740
	=========
Turnover	703,020
Profits	-64,030

Note: SC’s management refused to release its detailed financial reports.

Important Ratios

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

	as of Dec. 31, 2013	as of Dec. 31, 2014
*Current ratio	1.43	/
*Quick ratio	0.65	/
*Liabilities to assets	0.90	1.01
*Net profit margin (%)	-4.48	-9.11
*Return on total assets (%)	-5.55	-13.18
*Inventory /Turnover ×365	154 days	/
*Accounts receivable/Turnover ×365	14 days	/
*Turnover/Total assets	1.24	1.45
* Cost of goods sold/Turnover	0.96	/

PROFITABILITY: FAIR

 The turnover of SC appears fairly good.

 SC’s net profit margin is fair.

SC’s return on total assets is fair.

SC’s cost of goods sold is fairly high, comparing with its turnover in 2013.

LIQUIDITY: FAIR

The current ratio of SC is maintained in a normal level in 2013.

SC’s quick ratio is maintained in a fair level in 2013.

The accounts receivable of SC appears average in 2013.

The inventory of SC appears large in 2013.

The short term loan of SC appears large in 2013.

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 high.

Overall financial condition of the SC: Fair

SC is considered large-sized in its line with fair financial conditions.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.66.20
UK Pound	1	Rs.98.30
Euro	1	Rs.72.41
CNY	1	Rs.10.24

Note : Above are approximate rates obtained from sources believed to be correct

INFORMATION DETAILS

Analysis Done by :	KAS
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.