MIRA INFORM REPORT

Report No. :	345445
Report Date :	17.10.2015

IDENTIFICATION DETAILS

Name :	LITONG ALUMINIUM INDUSTRY (SHANDONG) CO., LTD.
Registered Office :	Tanyi Industrial Park, Feixian, Linyi City, Shandong Province, 273411 Pr
Country :	China
Financials (as on) :	31.12.2014
Date of Incorporation :	25.05.2004
Com. Reg. No.:	371300400003525
Legal Form :	Wholly Foreign-Owned Enterprise
Line of Business :	Manufacturing coating aluminum and composite aluminum panel; selling self-made products.
No. of Employees :	170

RATING & COMMENTS

MIRA’s Rating :

Ba

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, 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

LITONG ALUMINIUM INDUSTRY (SHANDONG) CO., LTD.

TANYI INDUSTRIAL PARK, FEIXIAN, LINYI CITY,

SHANDONG PROVINCE, 273411 PR CHINA

TEL: 86 (0) 539-5616006/5616346 FAX: 86 (0) 539-5616536/5616346

EXECUTIVE SUMMARY

INCORPORATION DATE : MAY 25, 2004

REGISTRATION NO. : 371300400003525

REGISTERED LEGAL FORM : WHOLLY FOREIGN-OWNED ENTERPRISE

CHIEF EXECUTIVE : MR. ZHANG XIANGJU (CHAIRMAN)

STAFF STRENGTH : 170

REGISTERED CAPITAL : HKD 27,650,000

BUSINESS LINE : MANUFACTURING AND TRADING

TURNOVER : CNY 332,220,000 (AS OF DEC. 31, 2014)

EQUITIES : CNY 43,670,000 (AS OF DEC. 31, 2014)

PAYMENT : AVERAGE

MARKET CONDITION : COMPETITIVE

FINANCIAL CONDITION : FAIRLY STABLE

OPERATIONAL TREND : STEADY

GENERAL REPUTATION : AVERAGE

EXCHANGE RATE : CNY 6.3579=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 wholly foreign-owned enterprise at local Administration for Industry & Commerce (AIC-The official body of issuing and renewing business license) on May 25, 2004.

Company Status: Wholly foreign-owned enterprise

This form of business in PR China is defined as a legal person. It is a limited co. established within the territories of PR China with capital provided totally by the foreign investors. More than one foreign investor may jointly invest in a wholly foreign-owned enterprise. The investing party/parties solely exercise management, reap profit and bear risks and liabilities by themselves. This form of companies usually have a limited duration is extendible upon approval of Examination and Approval Authorities.

SC’s registered business scope includes manufacturing coating aluminum and composite aluminum panel; selling self-made products.

SC is mainly engaged in manufacturing and selling coating aluminum.

Mr. Zhang Xiangju has been legal representative, chairman and general manager of SC since 2012.

SC is known to have approx. 170 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 Linyi. Our checks reveal that SC owns the total premise about 38,800 square meters.

http://www.china-litong.com The website belongs to Hong Kong Litong International Holdings (Group) Limited and it includes the information on SC and its related companies. The design is professional and the content is well organized. At present it is in Chinese, English and Russian versions.

Changes of its registered information are as follows:

Date of change	Item	Before the change	After the change
2012	Legal representative	Xiong Xiaolin (	Present one
2014-11-26	Shareholder	Hong Kong Litong International Holdings (Group) Limited	Present one

Organization Code: 761897916

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

MAIN SHAREHOLDERS:

Name % of shareholdings

Litong Investment Holdings Company Limited (Hong Kong) 100

Incorporation Date : June 25, 2012

Registration No. : 1764885

Registered Legal Form : Private company limited by shares

Active Status : Live

Legal Representative, Chairman and General Manager:

Mr. Zhang Xiangju is currently responsible for the overall and daily management of SC.

Working Experience(s):

From 2012 to present Working in SC as legal representative, chairman and general manager.

Directors:

Lan Guohua

Cao Huaian

Supervisor:

Xu Longguo徐

SC is mainly engaged in manufacturing and selling coating aluminum.

SC’s products mainly include: coating aluminum.

SC sources its materials 100% from domestic market. SC sells 70% of its products in domestic market, and 30% to overseas market.

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

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

According to the website:

Hong Kong Litong International Holdings (Group) Limited

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

Registration No.: 0846340

Establishment Date: April 30, 2003

Legal Form: Private company limited by shares

Tel: 00852-31059918/31059922

Fax: 00852-31050968

Website: http://www.china-litong.com

Email: info@hklitong.com

Litong Aluminium Industry (Shanghai) Co., Ltd.

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

Registered no.: 310000400248064

Legal representative: Xiong Xiaolin

Establishment date: 2000-09-29

Litong Aluminium Industry (Guangdong) Co., Ltd.

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

Registered no.: 440681400025581

Legal representative: Jiang Wenbin

Establishment date: 2003-10-23

Litong Aluminium Industry (Wuxi) Co., Ltd.

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

Registered no.: 320281400009689

Establishment date: 2005-1-31

Legal representative: Huang Chengjiang

Litong Aluminium Industry (Qinghai) Co., Ltd.

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

Registered no.: 633000000001026

Establishment date: 2011-1-20

Legal representative: Huang Shaobo

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.

China Construction Bank Linyi Branch

AC#: 37001828301050149166

Relationship: Normal

Balance Sheet

Unit: CNY’000

	As of Dec. 31, 2014
Cash & bank	1,400
Inventory	14,690
Accounts receivable	22,800
Advances to suppliers	960
Other accounts receivable	70
Other current assets	0
	------------------
Current assets	39,920
Deferred income tax assets	300
Fixed assets net value	18,820
Project under construction	16,460
Long term investment	0
Intangible and other assets	13,510
	------------------
Total assets	89,010
	=============
Short loans	0
Accounts payable	42,210
Advances from clients	7,180
Taxes payable	-6,070
Other accounts payable	1,260
Accrued payroll	760
	------------------
Current liabilities	45,340
Long-term liabilities	0
	------------------
Total liabilities	45,340
Equities	43,670
	------------------
Total liabilities & equities	89,010
	=============

Income Statement

Unit: CNY’000

	As of Dec. 31, 2014
Turnover	332,220
Cost of goods sold	317,520
Taxes and additional of main operation	800
Sales expense	5,790
Management expense	3,080
Finance expense	440
Investment income	0
Non-operating income	960
Non-operating expenses	80
Profit before tax	5,470
Less: profit tax	1,370
Profits	4,100

Important Ratios

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

	As of Dec. 31, 2014
*Current ratio	0.88
*Quick ratio	0.56
*Liabilities to assets	0.51
*Net profit margin (%)	1.23
*Return on total assets (%)	4.61
*Inventory /Turnover ×365	17 days
*Accounts receivable/Turnover ×365	26 days
*Turnover/Total assets	3.73
* Cost of goods sold/Turnover	0.96

PROFITABILITY: AVERAGE

The turnover of SC appears fairly good in its line.

SC’s net profit margin appears average.

SC’s return on total assets appears average.

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

LIQUIDITY: FAIR

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

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

The inventory of SC appears average.

The accounts receivable of SC appears fairly large.

SC has no short-term loan in 2014.

SC’s turnover is in a fairly good 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 average.

Overall financial condition of the SC: Fairly Stable

SC is considered medium-sized in its line with fairly stable financial conditions. After our research and based on the information obtained.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.64.97
UK Pound	1	Rs.100.55
Euro	1	Rs.73.99

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.