MIRA INFORM REPORT

Report No. :	324654
Report Date :	01.06.2015

IDENTIFICATION DETAILS

Name :	HUBEI CHEMICAL FIBRE GROUP XIANGYANG IMP AND EXP CO., LTD.

Registered Office :	No. 44 Maofang Zone, Changhong Road, Fancheng District Xiangyang, Hubei Province 441002 Pr

Country :	China

Financials (as on) :	31.12.2013

Date of Incorporation :	05.11.2003

Com. Reg. No.:	420600000168450

Legal Form :	One-Person Limited Liability Company

Line of Business :	Subject is engaged in selling textiles, chemical fiber materials and electronics products mainly include: chemical fiber products, textiles.

No. of Employee :	30

RATING & COMMENTS

MIRA’s Rating :

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

Status :	Small Company
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 – December 31, 2014

Country Name

Previous Rating

(30.09.2014)

Current Rating

(31.12.2014)

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. In 2014 the People’s Bank of China (PBOC) doubled 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 2014 stood as the largest economy in the world, surpassing the US that year... 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 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.

Source : CIA

Company name & address

HUBEI CHEMICAL FIBRE GROUP XIANGYANG IMP AND EXP CO., LTD.

NO. 44 MAOFANG ZONE, CHANGHONG ROAD, FANCHENG DISTRICT XIANGYANG, HUBEI PROVINCE 441002 PR CHINA

TEL: 86 (0) 710-2108535/2108379/2108288

FAX: 86 (0) 710-2107998

EXECUTIVE SUMMARY

Date of Registration : NOVEMBER 5, 2003

REGISTRATION NO. : 420600000168450

LEGAL FORM : One-person Limited Liability Company

CHIEF EXECUTIVE : qian lihua (LEGAL REPRESENTATIVE)

REGISTERED CAPITAL : cny 3,500,000

staff : 30

BUSINESS CATEGORY : trading

Revenue : CNY 600,000 (AS OF DEC. 31, 2013)

EQUITIES : CNY 4,390,000 (AS OF DEC. 31, 2013)

WEBSITE : N/A

E-MAIL : N/A

PAYMENT : AVERAGE

MARKET CONDITION : fair

FINANCIAL CONDITION : FAIR

OPERATIONAL TREND : ordinary

GENERAL REPUTATION : AVERAGE

EXCHANGE RATE : CNY 6.20 = 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 one-person limited liability company of PRC with State Administration of Industry & Commerce (SAIC) under registration No. 420600000168450.

SC’s Organization Code Certificate No.: 87956189-5

SC’s registered capital: cny 3,500,000

SC’s paid-in capital: cny 3,500,000

Registration Change Record:-

Date	Change of Contents	Before the change	After the change
--	Shareholder (s) (% of Shareholding)	Hubei Chemical Fibre Group Co., Ltd. 20% Hubei Chemical Fibre Development Co., Ltd. 80%	Hubei Chemical Fibre Group Co., Ltd. 85% Hubei Chemical Fibre Development Co., Ltd. 15%
	Legal Form	Limited Liabilities Company	One-Person Limited Liability Company
	Shareholder (s) (% of Shareholding)	Hubei Chemical Fibre Group Co., Ltd. 85% Hubei Chemical Fibre Development Co., Ltd. 15%	Hubei Chemical Fibre Group Co., Ltd. 100%
	Legal Representative	Wang Weimin	Du Anqi
2012	Company Name	Hubei Chemical Fibre Group Xiangfan Import & Export Co., Ltd.	Hubei Chemical Fibre Group Xiangyang Imp And Exp Co., Ltd.
--	Registration No.	4206001351209	420600000168450
--	Shareholder (s)	Hubei Chemical Fibre Group Co., Ltd. 100%	Hubei Chemical Fibre Development Co., Ltd. 100%
2014-12-25	Legal Representative	Du Anqi	Qian Lihua

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

Name of Shareholder (s)	% of Shareholding
Hubei Chemical Fibre Development Co., Ltd.	100

SC’s Chief Executives:-

Position	Name
Legal Representative and Chairman	Qian Lihua
General Manager	Zhang Xiaoshu

RECENT DEVELOPMENT

No recent development was found during our checks at present.

SHAREHOLDER CHART & BACKGROUND

Name % of Shareholding

Hubei Chemical Fibre Development Co., Ltd. 100

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

Date of Registration: December 18, 2001

Registration No.: 420600000009432

Legal Form: Limited Liability Company

Chief Executive: Qian Lihua

Registered Capital: CNY 423,430,000

MANAGEMENT

Qian Lihua, Legal Representative and Chairman

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

Gender: F

Nationality: China

Qualification: University

Working experience (s):

From 2014 to present, working in SC as legal representative and chairman

Also working in Hubei Chemical Fibre Development Co., Ltd. and Hubei Chemical Fibre Group Co., Ltd. as legal representative

Zhang Xiaoshu, General Manager

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

Gender: M

Nationality: China

Qualification: University

Working experience (s):

At present, working in SC as general manager

BUSINESS OPERATION

SC’s registered business scope includes selling textiles, chemical fiber materials, garments, shoes, caps and electronics; importing and exporting various goods and technology, excluding the goods prohibited or limited by the government.

SC is mainly engaged in selling textiles, chemical fiber materials and electronics.

SC’s products mainly include: chemical fiber products, textiles, etc.

SC sources the products 50% from domestic market, and 50% from overseas market, mainly U.S.A. and Europe. SC sells 40% of its products in domestic market, and 60% to overseas market, mainly Southeast Asia, etc.

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.

*Major Customers:

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

Color-Tex, Inc.

Al Fatah Traders

Saleem Winding Works

M.H. Lace Works

M J Textiles Co., Ltd.

Staff & Office:

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

SC is known to have approx. 30 staff at present.

SC rents an area as its operating office of approx. 400 sq. meters at the heading address.

RELATED COMPANY

Hubei Golden Ring Co., Ltd.

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

Date of Registration: June 8, 1993

Registration No.: 420000000029688

Chief Executive: Tian Han

Registered Capital: CNY 211,677,300

Hubei Chemical Fibre Group Co., Ltd.

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

Date of Registration: June 11, 1989

Registration No.: 420600000120961

Chief Executive: Qian Lihua

Registered Capital: CNY 138,890,000

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:

China Construction Bank

AC#: 421861118018001659859

FINANCIALS

Balance Sheet

Unit: CNY’000	As of Dec. 31, 2011	As of Dec. 31, 2012	As of Dec. 31, 2013
Cash	6,840	6,480	6,480
Accounts receivable	2,950	3,020	6,340
Advances to suppliers	90	50	100
Other receivable	130	270	30
Inventory	0	0	0
Non-current assets within one year	0	0	0
Other current assets	710	150	0
	------------------	------------------	------------------
Current assets	10,720	9,970	12,950
Fixed assets	90	70	30
Long-term prepaid expenses	0	0	0
Deferred income tax assets	0	0	0
Other non-current assets	0	0	0
	------------------	------------------	------------------
Total assets	10,810	10,040	12,980
	=============	=============	=============
Short-term loans	0	0	0
Accounts payable	1,760	1,830	7,640
Wages payable	30	70	20
Taxes payable	-20	-40	-100
Advances from clients	4,130	3,510	0
Other payable	320	110	1,030
Other current liabilities	10	0	0
	------------------	------------------	------------------
Current liabilities	6,230	5,480	8,590
Non-current liabilities	0	0	0
	------------------	------------------	------------------
Total liabilities	6,230	5,480	8,590
Equities	4,580	4,560	4,390
	------------------	------------------	------------------
Total liabilities & equities	10,810	10,040	12,980
	=============	=============	=============

Income Statement

Unit: CNY’000	As of Dec. 31, 2011	As of Dec. 31, 2012	As of Dec. 31, 2013
Revenue	2,470	1,240	600
Cost of sales	1,380	960	90
Sales expense	80	160	340
Management expense	20	150	370
Finance expense	0	-20	-40
Profit before tax	990	-18	-150
Less: profit tax	130	0	0
Profits	860	-18	-150

Important Ratios

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

	As of Dec. 31, 2011	As of Dec. 31, 2012	As of Dec. 31, 2013
*Current ratio	1.72	1.82	1.51
*Quick ratio	1.72	1.82	1.51
*Liabilities to assets	0.58	0.55	0.66
*Net profit margin (%)	34.82	-1.45	-25.00
*Return on total assets (%)	7.96	-0.18	-1.16
*Inventory / Revenue ×365	--	--	--
*Accounts receivable/ Revenue ×365	436 days	889 days	3,857 days
* Revenue/Total assets	0.23	0.12	0.05
* Cost of sales / Revenue	0.56	0.77	0.15

FINANCIAL COMMENTS

PROFITABILITY: FAIR

The revenue of SC appears poor in its line in 2013.

SC’s net profit margin is poor in 2013.

SC’s return on total assets is fair in 2013.

SC’s cost of sales is low in 2013, 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 fairly good level.

SC has no inventory in three years.

The accounts receivable of SC appears large in three years.

SC has no short-term loans in three years.

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

LEVERAGE: AVERAGE

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. The large amount of accounts receivable may be a threat to SC’s financial condition.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.63.76
UK Pound	1	Rs.97.80
Euro	1	Rs.69.91

INFORMATION DETAILS

Analysis Done by :	RAS

Report Prepared by :	SDA

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.