MIRA INFORM REPORT

Report Date :

31.10.2011

IDENTIFICATION DETAILS

Name :	DENIS FRERES (CHINA) CO. LTD.
Registered Office :	Unit C-E, 7/F., Ho Lee Commercial Building, 38-44 D’Aguilar Street, Central
Country :	Hong Kong
Date of Incorporation :	04.12.1947
Com. Reg. No.:	00000791
Legal Form :	Private Limited Company.
Line of Business :	Importer and Exporter; Processor of Packaged food products, food ingredients, wild mushrooms, morels, cepes, etc.

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 :	Usually 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 – September 30, 2011

Country Name	Previous Rating (30.06.2011)	Current Rating (30.09.2011)
Hong Kong	A2	A2

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

Company name and address

DENIS FRERES (CHINA) CO. LTD.

ADDRESS: Unit C-E, 7/F., Ho Lee Commercial Building, 38-44 D’Aguilar Street, Central, Hong Kong.

PHONE: 2526 5986

FAX: 2845 0538

E-MAIL: mail@dfchina.com.hk

MANAGEMENT

Managing Director: Mr. Guillaume Calloud

SUMMARY

Incorporated on: 4th December, 1947.

Organization: Private Limited Company.

Capital: Nominal: HK$70,000,000.00

Issued: HK$21,497,000.00

Business Category: Foodstuff Trader and Processor.

Annual Turnover: US$9.0-10.0 million.

Employees: 15.

Main Dealing Banker: United Overseas Bank Ltd., Hong Kong Branch.

Banking Relation: Good.

ADDRESS

Registered Head Office:-

Unit C-E, 7/F., Ho Lee Commercial Building, 38-44 D’Aguilar Street, Central, Hong Kong.

G.P.O. Box 2110, Hong Kong.

China Factory:-

Denis Freres Food (Shenzhen) Processing Co. Ltd.

2/F., 2 Building, Luji Agricultural Products Processing Factory, No. 1, Lanzhu Road East, Pingshan Grand Industrial Zone, Longgang, Shenzhen, China.

[ Tel: (86-755) 8978 0588

Fax: (86-755) 8978 0290

Email: tphang@dfchina.com.hk]

Holding Company:-

Sari-Denis Frères S.A., France.

Associated Companies:-

Denis Frères Group of Companies [DF Group]

A. Clouet & Co. (Kuala Lumpur) Sdn. Bhd., Malaysia.

A. Clouet (Australia) Pty. Ltd., Australia.

Alce Nero Asia Pte. Ltd., Singapore.

Ayam SARL, France.

Clouet Trading Pte. Ltd., Singapore.

Denis Freres (Shenzhen) Co., Ltd., China.

Frooots Pte. Ltd., Singapore.

Guinea Foods Sdn. Bhd., Malaysia.

Imaging Innovation K.K., Japan.

Nichifutsu Boeki K.K., Japan.

P.T. Far East Trading Indonesia (Faretina), Indonesia.

SCETI K.K., Japan.

Sceti Medical (Asia) Pte. Ltd., Singapore.

Sceti Medical Labo K.K., Japan.

The Commercial Co. of Siam Ltd., Thailand.

Union Liquors K.K., Japan.

etc.

BUSINESS REGISTRATION NUMBER

00000791

COMPANY FILE NUMBER

0002262

MANAGEMENT

Managing Director: Mr. Guillaume Calloud

Contact Person: Mr. Tommy Phang

Marketing Manager: Ms. Queenie Lau

CAPITAL

Nominal Share Capital: HK$70,000,000.00 (Divided into 35,000,000 shares of HK$2.00 each)

Issued Share Capital: HK$21,497,000.00

SHAREHOLDERS

(As per registry dated 04-12-2010)

Name		No. of shares
Sari Denis Freres S.A. AV. Du Moulin 3 Village, CH-1110 Morges, Switzerland.		10,748,495
Francois DE MOULLIAC		5
		–––––––––
	Total:	10,748,500 ========

DIRECTORS

(As per registry dated 04-12-2010)

Name (Nationality)	Address
Guillaume CALLOUD	Flat B on LG/F, 51 Seabird Lane, Beach Village, Discovery Bay City, Lantau Island, Hong Kong.
Francois DE MOULLIAC	16 Jalan Rukam, Singapore 576952.

SECRETARY

Guillaume CALLOUD (As per registry dated 04-12-2010)

HISTORY

The subject was incorporated on 4th December, 1947 as a private limited liability company under the Hong Kong Companies Ordinance.

Originally the subject was registered under the name of Indo-China Trading Co. Ltd., name changed to the present style on 24th September, 2007.

Apart from these, neither material change nor amendment has been ever traced and noted.

OPERATIONS

Activities: Importer and Exporter; Processor.

Lines: Packaged food products, food ingredients, wild mushrooms, morels, cepes, etc.

Employees: 15.

Commodities Imported: Imported from China, Europe, etc.

Markets: Hong Kong, China, Southeast Asia, etc.

Annual Turnover: US$9.0-10.0 million.

Terms/Sales: L/C, T/T, etc.

Terms/Buying: As per contracted.

FINANCIAL INFORMATION

Nominal Share Capital: HK$70,000,000.00 (Divided into 35,000,000 shares of HK$2.00 each)

Issued Share Capital: HK$21,497,000.00

Mortgage or Charge:-

Date of Mortgage: 24-09-2002

Amount: To secure “all moneys” in respect of general banking facilities

Property: 128/6,875th parts or shares of and in The Remaining Portion of Inland Lot No. 988, Section A of Inland Lot No. 988, Inland Lots Nos. 987, 986, 1156, 980, 981, 982 & 983 (Offices C, D & E on 7/F. of Ho Lee Commercial Building, 38-44 D’Aguilar Street, Central, Hong Kong.)

Mortgagee: United Overseas Bank Ltd., Hong Kong Branch.

Profit & Loss: Made small profits in the past years.

Condition: Keeping in an active state.

Facilities: Making active use of general banking facilities.

Payment: So far so good.

Commercial Morality: Good.

Bankers:-

United Overseas Bank Ltd., Hong Kong Branch.

The Hongkong & Shanghai Banking Corp. Ltd., Hong Kong.

Standard Chartered Bank (Hong Kong) Ltd., Hong Kong.

BNP Paribas, Hong Kong Branch.

Credit Agricole Corporate & Investment Bank, Hong Kong Branch.

Banking:-

One source states their relations with them have extended over many years and have always been very pleasant. Under respectable and reliable management.

Another source reports they maintain an active current account opened in their books on 26th November, 1947 and on which they grant banking facilities on a clean basis. They handle their import bills both under and not under documentary credits. They handle their export bills under and not under documentary credits. They also maintain a US$ current account with them.

Third source reveals they maintain a satisfactorily conducted current account with them which was opened on 27th August, 1968. General banking facilities granted to them are utilised to their satisfaction. They handle large amounts of their import bills.

Standing: Good.

GENERAL

Formerly known as Indo-China Trading Co. Ltd. [ICTC], Denis Freres (China) Co. Ltd. is a wholly-owned subsidiary of Sari Denis Freres S.A. [SDF] which is a Switzerland-based firm.

ICTC was one of the oldest trading firms in Hong Kong as its history is over 59 years. In September 2007, ICTC changed name to the present style.

The subject’s nominal value of authorised share capital has been increased for three times from HK$100,000.00 to HK$70,000,000.00. On the other hand, its issued share capital was increased from HK$7,730,000.00 to HK$8,432,000.00 on 25th August, 2004, to HK$12,722,000.00 on 4th December, 2005, to HK$14,282,000.00 on 21st November, 2006, to HK$15,647,000.00 on 4th December, 2007 and has been further increased to HK$21,497,000.00.

Over the past years, the subject has become the sole distributor of the Group’s products in China as well as a leading exporter of food ingredients. It is also specialised on dried mushrooms trading. Now it also has become a leading exporter of dried wild mushrooms like Morels, Boletus, Cepes, Chanterelles, etc. from China. All packaged mushrooms are processed and packed at its own processing centre known as Denis Freres Food Processing (Shenzhen) Co. Ltd. [Shenzhen Denis Freres, formerly known as ICTC Food Processing Co. Ltd.] which is located at Pingshan Grand Industrial Zone, Longgang, Shenzhen Special Economic Zone, China. Packaged mushrooms include the following products and quantities:-

· Forest and farmed mushrooms (Bulk packed 5 kg, 10 kg, 15 kg)

· Mix mushrooms and exotic rises (Sachet 230 g)

· Mix mushrooms, dried vegetables and spices (Sachet 50 g)

· Mushroom Powder (Packed in pepper shaker)

· Mushroom Flakes (Packed in grinder)

Employing about 75 persons, Shenzhen Denis Freres is a significant foodstuff trader and food processor. It is part of the Denis Frères Group [DF Group] of companies. DF Group was formed in 1862 in Saigon, Vietnam by the Denis family. Today, the DF Group focuses on food related activities such as the production and distribution of packaged food products under its different trademarks such as “AYAM” and “DUCHEF”.

The subject is also dealing in these products.

Today the Group consists of a unique network of companies in 12 countries. Most of these companies are managed by the subject and Shenzhen Denis Freres.

Besides engaged in food and beverage business, the Group is also trading in consumer products and is engaged in health science business.

The subject has been trading in morels and cepes from China for more than 29 years. To further consolidate its leading position in the trade, the subject set up Shenzhen Denis Freres in September 2001. Registered as a wholly owned foreign enterprise, the factory is fully controlled by the subject. Equipped with modern facilities, Shenzhen Denis Freres is able to tailor made its products to the specifications required by its clients. Raw materials are acquired from the China suppliers in Xinjiang, Liaoning, Tibet, Yunnan etc. Finished products are exported to Europe, Australia, Japan and North America. Business is chiefly administered by Mr. Tommy Phang who is stationing at the China factory most of the time. Mr. Tommy Phang is also the subject’s Export Manager.

In August 2003, the factory received from Societe Generale de Surveillance [SGS], the world’s leading verification, testing and certification company, the international food certification HACCP. In July 2004, the subject got the International Food Standard [IFS] certification from International Supplier Auditing [ISA]. In September 2005, the subject was approved as a certified organic mushroom processor by “ECOCERT”.

Currently, the subject trades and processes the following products:-

· Beans/Pulses — Kidney Beans, Broad Beans

· Dried Fruits/Nuts — Walnuts, Pine Nuts

· Cultivated Mushrooms — Champignon De Paris, Shiitake, Woodear, Oyster Mushroom, Straw Mushroom

· Wild Mushrooms — Morels (Morechella Conica, Morchella Esculenta), Boletus Edulis (Porcini, Cep), Truffle (Tuber Aestivum), Chanterelle (Cantharellus Cibarius), Granulatus (European Bolete)

· Spices — Garlic Powder and Flakes, Sichuan Pepper, Staranise, Dried Chilli

The subject’s holding company, SDF, is engaged in management, marketing and procurement services. Business territories cover all the Asian countries. It is principally involved in production, importing, exporting and distributing of consumers’ food products under “AYAM” (significant canned foodstuffs are baked beans, sardines and tunas), “DUCHEF”, “VEGOOD”, “RICHMAN” and “GUINEA’S” trade marks. In Singapore, the distribution of “AYAM”, “DUCHEF” and “VEGOOD” products is handled by a subsidiary of the Group known as Clouet Trading Pte. Ltd. Business territories cover almost all Asian countries.

The subject’s business is rather steady and active. It distributes “AYAM” canned foodstuffs, mushrooms and dried agricultural products which are manufactured in Malaysia. Annual sales turnover ranges from US$9.0 to 10.0 million.

In order to penetrate the international market further, the subject has taken part in food fairs and exhibitions, such as “Food Expo”, which are held in Hong Kong and China.

In 2010 the subject has got China QS Certification. Besides, the subject has got the following certifications:

1. 2003 HACCP by SGS

2. 2004 IFS by ISA Cert (Higher Level)

3. 2005 Organic Products Certification by ECOCERT

4. 2008 BRC by ISA Cert (Grade A)

5. 2010 HALAL by Ifanca

The business of the Group is good.

The subject’s business is chiefly administered by Mr. Guillaume Calloud, a French who has been in Hong Kong for a very long time.

On the whole, in view of the subject’s parentage and history in Hong Kong, consider it good for normal business engagements.

REMARKS

Property information of the company:-

Property Location: Offices C, D & E on 7/F., Ho Lee Commercial Building,
38-44 D’Aguilar Street, Central, Hong Kong.

Owner: Indo-China Trading Co. Ltd.

Date of Purchase: 24-02-1989

Purchased Price: HK$6,150,000

Incumbrances:-

Date of Mortgage	Amount Consideration	Mortgagee	Nature
24-09-2002	-	United Overseas Bank Ltd., Hong Kong Branch.	Mortgage to secure general banking facilities

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.48.82
UK Pound	1	Rs.78.57
Euro	1	Rs.69.28

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.