MIRA INFORM REPORT

Report Date :

31.01.2011

IDENTIFICATION DETAILS

Name :	KINGDECOR (ZHEJIANG) CO., LTD
Registered Office :	No. 158 Tongjiang Road, Shenjia Economic Development Zone, Qujiang, District, Quzhou, Zhejiang Province, 324000 Pr
Country :	China
Financials (as on) :	31.12.2009
Date of Incorporation :	26.11.2004
Com. Reg. No.:	330800400000802
Legal Form :	Chinese-Foreign Equity Joint Venture Enterprise
Line of Business :	manufacturing and selling decorative base paper

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

Maximum Credit Limit :	USD 2,000,000
Status :	Good
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 – June 30, 2010

Country Name	Previous Rating (01.04.2010)	Current Rating (30.06.2010)
China	a2	a2

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

Company name & address

KINGDECOR (ZHEJIANG) CO., Ltd.

NO. 158 TONGJIANG ROAD, SHENJIA ECONOMIC DEVELOPMENT ZONE, QUJIANG DISTRICT, QUZHOU, ZHEJIANG PROVINCE, 324000 PR CHINA

158

TEL: 86 (0) 570-8507888 FAX: 86 (0) 570-8768669

EXECUTIVE SUMMARY

INCORPORATION DATE : NOV. 26, 2004

REGISTRATION NO. : 330800400000802

REGISTERED LEGAL FORM : CHINESE-FOREIGN EQUITY JOINT VENTURE ENTERPRISE

CHIEF EXECUTIVE : MR. ZHU YI (CHAIRMAN)

STAFF STRENGTH : 260

REGISTERED CAPITAL : USD 24,311,912

BUSINESS LINE : MANUFACTURING

TURNOVER : CNY 432,380,000 (AS OF DEC. 31, 2009)

EQUITIES : CNY 282,700,000 (AS OF DEC. 31, 2009)

PAYMENT : AVERAGE

RECOMM. CREDIT RANGE : UP TO USD 2,000,000

MARKET CONDITION : COMPETITIVE

FINANCIAL CONDITION : stable

OPERATIONAL TREND : STEADY

GENERAL REPUTATION : AVERAGE

EXCHANGE RATE : CNY 6.59 = 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 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. 26, 2004.

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 decorative base paper.

SC is mainly engaged in manufacturing and selling decorative base paper.

Mr. Zhu Yi is the legal representative and chairman of SC at present.

SC is known to have approx. 260 employees at present.

SC is currently operating at the above stated address, and this address houses its operating office and factory in the economic development zone of Quzhou. SC’s management declined to release the detailed information of the premise.

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

Email: info@kingdecor.cn

No significant events or changes were found during our checks with the local Administration for Industry and Commerce.

MAIN SHAREHOLDERS:

Name % of Shareholding

Zhejiang Xianhe Special Paper Co., Ltd. 50

Schattdecor AG (Germany) 50

Schattdecor

Zhejiang Xianhe Special Paper Co., Ltd.

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

Legal representative: Wang Minliang

Registration No.: 330803000012452

Incorporation date: Dec. 19, 2001

Website: http://www.xianhepaper.com/

Add: No. 81 Tongjiang Road, Shenjia Economic Development Zone, Qujiang District, Quzhou, Zhejiang Province

Tel: +86- 570-2933109

Fax: +86- 570-2931631

Schattdecor AG (Germany)

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

Website: http://www.schattdecor.de/en/

Add: Walter-Schatt-Allee 1-3, DE-83101 Thansau
Tel.: +49 8031 - 275 0
Fax: +49 8031 - 275 125
E-Mail: info@schattdecor.de

l Legal representative and chairman:

Mr. Zhu Yi, Chinese-German, #6005263354, born in 1962, he is currently responsible for the overall management of SC.

Working Experience(s):

At present Working in SC as legal representative and chairman

Also working in Schattdecor (Shanghai) Co., Ltd. as legal representative

SC is mainly engaged in manufacturing and selling decorative base paper.

SC’s products mainly include: high-grade printing paper, plain paper, etc.

SC sources its materials 80% from domestic market and 20% from the overseas markets. SC sells 60% of its products in domestic market and 40% to the overseas markets.

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.

Schattdecor (Shanghai) Co., Ltd.

No. 1189 Kangqiao East Road, Shanghai

Tel.: +86 21-38117777

Fax: +86 21-58138787

E-Mail: info@schattdecor.cn

Etc.

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.

Industrial & Commercial Bank of China Zhejiang Provincial Branch

Add: No. 150 Zhonghe Middle Road, Hangzhou, Zhejiang Province

AC#: N/A

Relationship: Normal.

Balance Sheet

Unit: CNY’000

	as of Dec. 31, 2009
Cash & bank	115,530
Inventory	83,170
Accounts receivable	95,420
Advances to suppliers	6,660
Notes receivable	42,270
Other receivables	3,870
Other current assets	20
	------------------
Current assets	346,940
Fixed assets net value	191,650
Projects under construction	230
Long term investment	0
Intangible assets	16,870
Other assets	20
	------------------
Total assets	555,710
	=============
Short loans	52,290
Accounts payable	49,920
Advances from clients	4,250
Notes payable	0
Other payable	56,910
Salaries and welfare payable	2,720
Taxes payable	6,920
Long-term liabilities due with in one year	25,000
Other current liabilities	0
	------------------
Current liabilities	198,010
Long term liabilities	75,000
	------------------
Total liabilities	273,010
Equities	282,700
	------------------
Total liabilities & equities	555,710
	=============

Income Statement

Unit: CNY’000

	as of Dec. 31, 2009
Turnover	432,380
Cost of goods sold	343,770
Sales expense	15,720
Management expense	8,030
Finance expense	8,930
Non-operating income	460
Non-operating expense	40
Profit before tax	89,040
Less: profit tax	2,800
Profits	86,240

Important Ratios

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

	as of Dec. 31, 2009
*Current ratio	1.75
*Quick ratio	1.33
*Liabilities to assets	0.49
*Net profit margin (%)	19.95
*Return on total assets (%)	15.52
*Inventory /Turnover ×365	71 days
*Accounts receivable/Turnover ×365	81 days
*Turnover/Total assets	0.78
* Cost of goods sold/Turnover	0.80

PROFITABILITY: FAIRLY GOOD

l The turnover of SC appears fairly good.

l SC’s net profit margin is fairly good.

l SC’s return on total assets is fairly good.

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

LIQUIDITY: AVERAGE

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

l SC’s quick ratio is maintained in a normal level.

l The inventory of SC appears average.

l The accounts receivable of SC appears average.

l The short-term loan of SC appears average.

l SC’s turnover is in a fair level in 2009, comparing with the size of its total assets.

LEVERAGE: AVERAGE

l The debt ratio of SC is average.

l The risk for SC to go bankrupt is average.

Overall financial condition of the SC: Stable.

SC is considered medium-sized in its line with stable financial conditions. A credit line up to USD 2,000,000 would appear to be within SC’s capacities.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.45.74
UK Pound	1	Rs.72.73
Euro	1	Rs.62.73

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

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.