MIRA INFORM REPORT

Report Date :

25.10.2007

IDENTIFICATION DETAILS

Name :	KERRY OILS AND GRAINS (QINGDAO) CO., LTD.
Registered Office :	No. 99, Qianwangang Road, Economic & Technical Development Zone Qingdao City, Shandong Province 266555
Country :	China
Financials (as on) :	31.12.2005
Date of Incorporation :	17.11.1994
Com. Reg. No.:	001679
Legal Form :	Chinese-Foreign Equity Joint Venture Enterprise
Line of Business :	Manufacturing Animal and Vegetable Oil

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
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

Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear

COMPANY NAME & ADDRESS

KERRY OILS AND GRAINS (QINGDAO) CO., LTD.

NO. 99, QIANWANGANG ROAD, ECONOMIC & TECHNICAL DEVELOPMENT ZONE

QINGDAO CITY, SHANDONG PROVINCE 266555 PR CHINA

TEL: 86 (0) 532-86828908

FAX: 86 (0) 532-86828690

EXECUTIVE SUMMARY

INCORPORATION DATE : nov. 17, 1994

REGISTRATION NO. : 001679

REGISTERED LEGAL FORM : CHINESE-FOREIGN EQUITY JOINT VENTURE ENTERPRISE

CHIEF EXECUTIVE : MR. GUO JIANHAI (CHAIRMAN)

STAFF STRENGTH : 263

REGISTERED CAPITAL : USD 6,000,000

BUSINESS LINE : MANUFACTURING

TURNOVER : CNY 1,326,987,740 (AS OF DEC. 31, 2005)

EQUITIES : CNY 145,705,503 (AS OF DEC. 31, 2005)

PAYMENT : AVERAGE

RECOMM. CREDIT RANGE : UP TO USD 1,000,000 (PERIODICAL REVIEW)

MARKET CONDITION : COMPETITIVE

FINANCIAL CONDITION : fairly STABLE

OPERATIONAL TREND : STEADY

GENERAL REPUTATION : AVERAGE

EXCHANGE RATE : CNY 7.50 =US1$

Credit history (10%) Market trend (10%) Operational size (10%)

In case of unlimited companies, newly established companies, or lack of financial data, more weight is given to ‘Ownership background’ and ‘Payment record’ in our analysis.

Adopted abbreviations:

ANS - amount not stated

NS - not stated SC - subject company (the company inquired by you)

NA - not available

CNY - China Yuan Renminbi

SC was registered as a Chinese-foreign equity joint venture enterprise at local Administration for Industry & Commerce (AIC - The official body of issuing and renewing business license) on Nov. 17, 1994.

Company Status: Chinese-foreign equity joint venture enterprise

This form of business in PR China is defined as a legal person. It is a limited co. jointly invested by one or more foreign companies and one or more PR China controlled companies within the territories of PR China according to a certain proportion of capital investment. The investing parties exercise business management, share profits and bear all risks and liabilities of the co. together. The equity joint venture law requires that foreign party contribute not less than 25% of the registered capital, with no maximum. The investing parties are free to agree on method of profit distribution and liabilities bearing according to the proportion of capital investment. Each investing parties contributes funds, tangible assets, technology & etc. The board of directors excises the high authority. The joint venture usually has a limited duration of 10 to 50 years. Enterprise with large investment, long construction periods, low investment returns, introducing of advanced technology & advanced technology products that have good competition position in international market may extend beyond the 50 years limit.

SC’s registered business scope includes manufacturing and selling animal oil, vegetable oil, grease products, packaging materials and products; storing, transferring, and separate loading business; and manufacturing single feed.

SC is mainly engaged in manufacturing animal and vegetable oil.

Mr. Guo Jianhai has been chairman of SC since 1994.

SC is known to have approx. 263 staff members at present.

SC is currently operating at the above stated address, and this address houses its operating office and factory in the development zone of Qingdao. Our checks reveal that SC rents the total premise about 66,600 square meters.

http://www.kogqd.com The design is professional and the content is well organized. At present it is in Chinese, English, and Japanese versions.

E-mail: fanyuling@qkerry.com

SC was formerly named “Qingdao Kerry Vegetable Oils Co., Ltd.” and adopted present name in May of 2006.

MAIN SHAREHOLDERS:

Name % of Shareholding

Kerry Oils & Grains (China) Ltd. (Western Samoa) 70

Qingdao Changsheng Group Co., Ltd. 30

Qingdao ChangSheng Group Co., Ltd. was founded in 1917. It is a centenary state comprehensive grain and oil processing enterprise, a draft unit of superfine fragrant peanut oil standard of P. R. C, and the only enterprise that got the state silver metal in Chinese grain and oil industry.

Address: No. 94, Liaoning Road, Qingdao City

Tel: 0532- 84628700

Website: http://www.qdchangsheng.cn

Chairman:

Mr. Guo Jianhai , Singaporean, born in 1944 with university education. He is currently responsible for the overall management of SC.

Working Experience(s):

From 1982 to 2002 Worked in Kuok Oils & Grains Pte Ltd as general manager;

From 1994 to present Working in SC as chairman;

From 2002 to present Working in Qingdao Kerry Peanut Oil Co., Ltd. as chairman.

General Manager:

Mr. Ma Fei , in his 40’s with university education. He is currently responsible for the daily management of SC.

Working Experience(s):

At present Working in SC as general manager;

From 2002 to present Working in Qingdao Kerry Peanut Oil Co., Ltd. as general manager.

SC is mainly engaged in manufacturing animal and vegetable oil.

SC’s products mainly include: peanuts oil, sesame oil, and palm oil, etc.

The combined annual production and total bulk tank storage capacity is about 300,000 M/T and 70,000 M/T respectively.

SC’s brands include: Arawana, Orchid, Fuyan, and Gold Ingots Brand, etc.

SC sources its materials 100% from domestic market, mainly Shandong and Liaoning province. SC sells 30% of its products to overseas market, mainly Hong Kong, Singapore, Malaysia, Thailand, and Australia, and 70% in domestic market.

The buying terms of SC include T/T, and Credit of 30-60 days. The payment terms of SC include T/T, L/C, and Credit of 15-30 days.

SC is known to have the following subsidiaries at present:

Kerry Oils and Grains (Qingdao) Co., Ltd. Beijing Branch

Kerry Oils and Grains (Qingdao) Co., Ltd. Yantai Branch

Kerry Oils and Grains (Qingdao) Co., Ltd. Guangzhou Branch

Kerry Oils and Grains (Qingdao) Co., Ltd. Nanning Branch

Kerry Oils and Grains (Qingdao) Co., Ltd. Shenyang Branch

Kerry Oils and Grains (Qingdao) Co., Ltd. Tianjin Branch

Kerry Oils and Grains (Qingdao) Co., Ltd. Jinan Branch

Kerry Oils and Grains (Qingdao) Co., Ltd. Qingdao Branch

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.

SC’s principal declined to release its bank information.

Balance Sheet

Unit: CNY’000

	As of Dec. 31, 2004	As of Dec. 31, 2005
Cash & bank	11,252	34,262
Inventory	265,416	235,520
Accounts receivable	105,315	67,629
Other Accounts receivable	2,420	4,721
Advances to suppliers	63,416	8,854
To be apportioned expense	337	602
Other current assets	735	5,017
	------------------	------------------
Current assets	448,891	356,605
Fixed assets	127,400	103,292
Fixed assets net value	106,426	89,704
Projects under construction	20,974	13,588
Long term investment	0	0
Other assets	29,320	27,975
	------------------	------------------
Total assets	605,611	487,872
	=============	=============
Short loans	310,755	143,642
Accounts payable	77,858	60,951
Bills payable	0	60,932
Advance from clients	12,742	19,041
Taxes payable	-14,007	-12,352
Other Accounts payable	34,913	29,185
Withdraw the expenses in advance	0	0
Other current liabilities	540	2,043
	------------------	------------------
Current liabilities	422,801	303,442
Long term liabilities	39,715	38,725
Other liabilities	0	0
	------------------	------------------
Total liabilities	462,516	342,167
Equities	143,095	145,705
	------------------	------------------
Total liabilities & equities	605,611	487,872

Income Statement

Unit: CNY’000

	As of Dec. 31, 2004	As of Dec. 31, 2005
Turnover	1,989,491	1,326,987
Cost of goods sold	1,848,314	1,206,232
Sales expense	114,230	78,450
Management expense	15,316	21,845
Finance expense	14,748	5,837
Profit before tax	9,833	16,992
Less: profit tax	1,961	3,593
Profits	7,872	13,399

Important Ratios

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

	As of Dec. 31, 2004	As of Dec. 31, 2005
*Current ratio	1.06	1.18
*Quick ratio	0.43	0.40
*Liabilities to assets	0.76	0.70
*Net profit margin (%)	0.40	1.01
*Return on total assets (%)	1.30	2.75
*Inventory /Turnover ×365	49 days	65 days
*Accounts receivable/Turnover ×365	19 days	19 days
*Turnover/Total assets	3.29	2.72
* Cost of goods sold/Turnover	0.93	0.91

PROFITABILITY: AVERAGE

The turnover of SC appears fairly good in its line, but it decreased in 2005.

SC’s net profit margin is average in 2004 and 2005.

SC’s return on total assets is average in 2004 and 2005.

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

LIQUIDITY: FAIR

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

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

The inventory of SC is maintained in a fairly large level in both years.

The accounts receivable of SC is maintained in an average level in both years.

The short-term loan of SC appears fairly large in both years.

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

LEVERAGE: AVERAGE

The debt ratio of SC is fairly high.

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. The large amount of short-term loan could be a threat to SC’s financial condition. Taking into consideration of SC’s general performance, reputation as well as market conditions we would rate SC as an average credit risk company.

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	Unfavourable & favourable factors carry similar weight in credit consideration. 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
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

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