MIRA INFORM REPORT

Report Date :

14.09.2011

IDENTIFICATION DETAILS

Name :	BASF HONG KONG LTD.
Registered Office :	45/F., Jardine House, 1 Connaught Place, Central
Country :	Hong Kong
Date of Incorporation :	20.12.1977
Com. Reg. No.:	00614211
Legal Form :	Private Limited Company.
Line of Business :	Manufacturer, Importer, Exporter and Wholesaler of Plastic additives, coating effects, and water & paper treatment, 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 :	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 – March 31^st, 2011

Country Name	Previous Rating (31.12.2010)	Current Rating (31.03.2011)
Hong Kong	a2	a2

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

Bottom of Form

Company name

BASF HONG KONG LTD.

Company ADDRESS

45/F., Jardine House, 1 Connaught Place, Central, Hong Kong.

PHONE: 2731 0111, 2731 1222, 2731 1500

FAX: 2731 5631, 2734 9631

E-MAIL: basf@basf-china.com.hk

MANAGEMENT

Executive Director: Mr. Tobias Dratt

SUMMARY

Incorporated on: 20th December, 1977.

Organization: Private Limited Company.

Capital: Nominal: HK$54,000,000.00

Issued: HK$54,000,000.00

Business Category: Specialty Chemicals Manufacturer and Trader.

Group Sales:- (Year ended 31-12-2010)

€63,873.0 million (The BASF Group)

€11,642.0 million (Asia Pacific Region)

Company Employees: 240. (Including associates)

Group Employees: 109,140. (As at 31-12-2010)

Main Dealing Banker: The Hongkong & Shanghai Banking Corp. Ltd., Hong Kong.

Calyon Corporate & Investment Bank, Hong Kong Branch.

Banking Relation: Good.

Company ADDRESS

Registered Head Office:-

45/F., Jardine House, 1 Connaught Place, Central, Hong Kong.

Immediate Holding Company:-

BASF East Asia Regional Headquarters Ltd., Hong Kong.

Ultimate Holding Company:-

BASF SE (or known as BASF Societas Europaea)

Carl-Bosch-Strabe 38, 67056 Ludwigshafen, Germany.

[Tel: 49-621-60-0; Fax: 49-621-60-42525]

Affiliated Companies:-

BASF Group of Companies

· BASF (China) Co. Ltd., China.

· BASF (Malaysia) Sdn. Bhd., Malaysia.

· BASF (Thai) Ltd., Thailand.

· BASF Agro Ltd., Japan.

· BASF Argentina S.A., Argentina.

· BASF Asia Pacific Service Centre Sdn. Bhd., Malaysia.

· BASF Australia Ltd., Australia.

· BASF Auxiliary Chemicals Co. Ltd., China.

· BASF Bangladesh Ltd., Bangladesh.

· BASF Beteiligungsgesellschaft mbH, Germany.

· BASF Bolivia S.r.l., Bolivia.

· BASF Canada Inc., Canada.

· BASF Catalysts (Shanghai) Co. Ltd., China.

· BASF Chemicals & Polymers Pakistan (Private) Ltd., Pakistan.

· BASF Chemicals Co. Ltd., China.

· BASF Chile S.A., Chile.

· BASF China Ltd., Hong Kong.

· BASF Co. Ltd., South Korea.

· BASF Coatings (Pty.) Ltd., South Africa.

· BASF Coatings + Inks Philippines Inc., Philippines.

· BASF Coatings AG, Germany.

· BASF Coatings Australia Pty. Ltd. Pty. Ltd., Australia.

· BASF Coatings International Trade (Shanghai) Co. Ltd., China.

· BASF Coatings Japan Ltd., Japan.

· BASF Coatings Ltd., UK.

· BASF Coatings Services (Pty.) Ltd., South Africa.

· BASF Coatings Services GmbH, Germany.

· BASF Construction Chemicals (Hong Kong) Ltd., Hong Kong.
[Members’ Voluntary Winding Up]

· BASF Corporation, USA.

· BASF de Costa Rica S.A., Costa Rica.

· BASF Dominicana S.A., Dominican Republic.

· BASF Ecuatoriana S.A., Ecuador.

· BASF Electronic Materials (Shanghai) Co. Ltd., China.

· BASF Electronic Materials Sdn. Bhd., Malaysia.

· BASF Española S.L., Spain.

· BASF FZE, UAE.

· BASF Idemitsu Co. Ltd., Japan.

· BASF India Ltd., India.

· BASF Inoac Polyurethanes Ltd., Japan.

· BASF Iran AG, Iran.

· BASF IT Services Ltd., UK.

· BASF Japan Ltd., Japan.

· BASF JCIC Neopentylglycol Co. Ltd., China.

· BASF Kanoo Gulf FZE, UAE.

· BASF Maroc S.A., Morocco.

· BASF Mexicana S.A. de C.V., Mexico.

· BASF New Zealand Ltd., New Zealand.

· BASF Pakistan (Private) Ltd., Pakistan.

· BASF Paraguaya S.A., Paraguay.

· BASF Petronas Chemicals Sdn. Bhd., Malaysia.

· BASF Philippines Inc., Philippines.

· BASF plc, UK.

· BASF Poliuretanos Ltda., Brazil.

· BASF Poliuretanos S.A., Argentina.

· BASF Polyurethane (China) Co. Ltd., China.

· BASF Polyurethanes (Malaysia) Sdn. Bhd., Malaysia.

· BASF Polyurethanes (Taiwan) Co. Ltd., Taiwan.

· BASF Polyurethanes (Thailand) Ltd., Thailand.

· BASF Quimica Colombiana S.A., Colombia.

· BASF Resins Co. Ltd., Hong Kong.

· BASF S.A., Brazil.

· BASF Services (Malaysia) Sdn. Bhd., Malaysia.

· BASF Shanghai Coatings Co. Ltd., China.

· BASF Singapore Pte. Ltd., Singapore.

· BASF South Africa (Pty.) Ltd., South Africa.

· BASF South East Asia Pte. Ltd., Singapore.

· BASF Styrenics East Asia Co. Ltd., Hong Kong.

· BASF Styrenics Private Ltd., India.

· BASF Taiwan Ltd., Taiwan.

· BASF Tunisie S.A., Tunisia.

· BASF Türk Kimya Sanayi ve Ticaret Ltd. Sti., Turkey.

· BASF Uruguaya S.A., Uruguay.

· BASF Venezolana S.A., Venezuela.

· BASF Vitamins Co. Ltd., China.

· BASF-Finlay (Private) Ltd., Sri Lanka.

· BASF-YPC Co. Ltd., China.

· ELLBA Eastern (Pte) Ltd., Singapore.

· Kartal Kimya Sanayi ve Ticaret A.S., Turkey.

· Nisso BASF Agro Co. Ltd., Japan.

· NOF (Thailand) Ltd., Thailand.

· P.T. BASF Indonesia, Indonesia.

· Santoku BASF Pte. Ltd., Singapore.

· Shanghai BASF Polyurethane Co. Ltd., China.

· Shanghai Gaoqiao BASF Dispersions Co. Ltd., China.

· Shanghai Lianheng Isocyanate Co. Ltd., China.

· Toray BASF PBT Resin Sdn. Bhd., Malaysia.

· Yangzi-BASF Styrenics Co. Ltd., China.

· Yasar BASF Automotive Coatings Co. Ltds., Turkey.

etc.

BUSINESS REGISTRATION NUMBER

00614211

COMPANY FILE NUMBER

0057377

MANAGEMENT

Executive Director: Mr. Tobias Dratt

CAPITAL

Nominal Share Capital: HK$54,000,000.00 (Divided into 54,000,000 shares of HK$1.00 each)

Issued Share Capital: HK$54,000,000.00

SHAREHOLDER

(As per registry dated 20-12-2010)

Name	No. of shares
BASF East Asia Regional Headquarters Ltd., Hong Kong.	54,000,000 ========

DIRECTORS

(As per registry dated 26-07-2011)

Name (Nationality)	Address
Saori Ulrike DUBOURG	House #8, 2 Barker Road, The Peak, Hong Kong.
Albert Gerhard HEUSER	Flat A, 49/F., The Summit, 41C Stubbs Road, Hong Kong.
Dirk Bernhard ELVERMANN	Flat B, 4/F. & 5/F., 22 Coastline Villa, Discovery Bay City, Lantau Island, Hong Kong.
Ulf Hinrich LOLEIT	Suite 3542, 35/F., Four Seasons Place, 8 Finance Street, Central, Hong Kong.

SECRETARY

(As per registry dated 20-12-2010)

Name	Address	Co. No.
Tricor Secretaries Ltd.	Level 28, Three Pacific Place, 1 Queen’s Road East, Wanchai, Hong Kong.	0014900

HISTORY

The subject was incorporated on 20th December, 1977 as a private limited liability company under the Hong Kong Companies Ordinance.

Originally the subject was registered under the name of Ciba-Geigy (Hong Kong) Ltd., name changed to Ciba Specialty Chemicals (Hong Kong) Ltd. on 15th January, 1997, to Ciba (Hong Kong) Ltd. on 26th July, 2007, and further to the present style on 28th December, 2009.

Formerly the registered head office was located at 13/F., Warwick House, Taikoo Place, 979 King’s Road, Quarry Bay, Hong Kong, moved to combine with its laboratory and godown at 61-69 Yau Ma Hom Road, Kwai Chung, New Territories, Hong Kong in August 1998. In November 2005, the registered office was relocated at Suite 1104-1106, 11/F., Tower 2, The Gateway, Harbour City, 25 Canton Road, Tsimshatsui, Kowloon, Hong Kong, and subsequently to the present address in January 2010.

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

OPERATIONS

Activities: Manufacturer, Importer, Exporter and Wholesaler.

Lines: Plastic additives, coating effects, and water & paper treatment, etc.

Company Employees: 240. (Including associates)

Group Employees: 109,140. (As at 31-12-2010)

Materials/Commodities: Imported from Europe, Israel, etc.

Markets: Hong Kong (main), China, Europe, etc.

Group Sales:-

Period	The BASF Group	Asia Pacific Region
Year ended 31-12-2006	€52,609.7 million	€ 7,450.0 million
Year ended 31-12-2007	€57,951.3 million	€ 8,785.0 million
Year ended 31-12-2008	€62,304.0 million	€ 8,664.0 million
Year ended 31-12-2009	€50,693.0 million	€ 7,997.0 million
Year ended 31-12-2010	€63,873.0 million	€11,642.0 million

Terms/Sales: On various terms.

Terms/Buying: As per contracted.

GOVERNMENT CONTRACT AWARDED SINCE 1999:

Date	GN No.	Particulars	Amount
28-05-1999	GN3001	Supply of polyelectrolyte (Type I)	HK$4,338,880 F.I.S./Hong Kong with ±20% variation (not exceeding HK$5,206,656)
26-10-2001	GN6719	Supply of anionic polymer	HK$901,120 F.I.S./Hong Kong with ±30% variation (not exceeding HK$1,171,456)
27-10-2006	GN6881	Supply of cationic polymer	US$2,565,000 (F.I.S./Hong Kong)
27-10-2006	GN6881	Supply of polyelectrolyte (Type IV)	HK$6,807,500 (F.I.S./Hong Kong)
30-09-2010	GN6287	Supply of polyelectrolyte (Type IV)	HK$7,047,000 (F.I.S./Hong Kong)

FINANCIAL INFORMATION

Nominal Share Capital: HK$54,000,000.00 (Divided into 54,000,000 shares of HK$1.00 each)

Issued Share Capital: HK$54,000,000.00

Group Operating Income:-

Period	The BASF Group	Asia Pacific Region
Year ended 31-12-2006	€6,749.9 million	€ 181.0 million
Year ended 31-12-2007	€7,316.3 million	€ 828.0 million
Year ended 31-12-2008	€6,463.0 million	€ 254.0 million
Year ended 31-12-2009	€3,677.0 million	€ 503.0 million
Year ended 31-12-2010	€7,761.0 million	€1,271.0 million

Profit or Loss: Operation is profitable.

Condition: Keeping in an active manner.

Facilities: Making active use of general banking facilities.

Payment: Reliable.

Commercial Morality: Good.

Bankers:-

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

· Calyon Corporate & Investment Bank, Hong Kong Branch.

· Deutsche Bank AG, Hong Kong Branch.

Standing: Good.

GENERAL

BASF Hong Kong Ltd. [BHKL], incorporated in December 1977, was originally registered as Ciba-Geigy (Hong Kong) Ltd. [CGHK].

CGHK was a merger of Ciba and Geigy, two businesses established in Hong Kong in 1947 and 1946 respectively. In 1996, CGHK and Sandoz were merged; Ciba-Geigy’s industrial divisions spun off to form a specialty chemical firm - Ciba Specialty Chemicals. On 15th January, 1997, CGHK was renamed as Ciba Specialty Chemicals (Hong Kong) Ltd. [CSCHK].

CSCHK was a member of the Ciba Group. Ciba Holding AG [Ciba Holding] was the ultimate holding company of Group. Its shares were listed on the SIX Swiss Exchange, traded on SWX Europe, and its American Depositary Shares traded on the New York Stock Exchange until 20th July, 2007. Ciba Holding was a global leader in the discovery and manufacture of innovative specialty chemicals that provide colour, performance and care for plastics, coatings, paper and other products. Its products and services were also used to provide clean water and to treat water streams in industrial and municipal applications.

CSCHK was a specialty chemicals manufacturer and trader. Employing 200 persons and having a laboratory area of 10,000 sq.ft., CSCHK was engaged in manufacturing PC boards, multi-layer PCBs, ICs and other specialty chemicals. CSCHK also imported and wholesaled specialty chemicals such as additives, colours, consumer care and performance polymers, etc. Having a long history and getting a firm foothold in Hong Kong, CSCHK’s business had been good. On 26th July, 2007, CSCHK changed its name to Ciba (Hong Kong) Ltd. [Ciba HK].

On 15th September, 2008, BASF SE (or known as BASF Societas Europaea) [BASF] made a public tender offer to acquire all publicly held shares in Ciba Holding at a price of CHF 50 in cash per share. The offer was accepted by shareholders in November 2008, and 94.59% of the company’s shares were acquired by BASF. On 9th April, 2009, BASF completed the acquisition of Ciba Holding. The purchase price was €2,178 million.

Following the acquisition, Ciba HK became a member of the BASF Group. Subsequently, the name of Ciba HK has been changed to BHKL on 28th December, 2009.

The businesses of Ciba Holding, which was acquired on 9th April, 2009, were managed as a separate division in the Performance Products segment in the second quarter of 2009. As of the third quarter of 2009, the former Ciba businesses have been integrated into the operating divisions of Performance Products.

In order to accommodate the changes to its portfolio as a result of the acquisition of Ciba Holding, the divisions in the Performance Products segment have been restructured as of 1st April, 2009. This segment has been assigned the new Paper Chemicals Division consisting of BASF’s paper chemicals and binders business as well as the kaolin minerals business, which were previously part of the Acrylics & Dispersions Division. Ciba’s business with products for paper manufacturing was integrated into the Paper Chemicals Division in the third quarter of 2009.

Presently, BASF’s worldwide business is managed by operating divisions that are aggregated into 6 segments including Chemicals, Plastics, Performance Products, Functional Solutions, Agricultural Solutions, Oil & Gas and Other.

The Chemicals Division supplies products to customers in the chemical, electronics, construction, textile, automotive, pharmaceutical and agricultural industries as well as many others. It ensures that other BASF segments are supplied with chemicals for the production of higher value products. Its portfolio ranges from basic chemicals, glues and electronic chemicals for the semiconductor and solar cell industries, to solvents and plasticizers, as well as starting materials for products such as detergents, plastics, textile fibres, paints and coatings and pharmaceuticals.

The Plastics Division includes a broad range of products, system solutions and services. It offers a number of engineering plastics for the automotive and electrical industries as well as use in household appliances and sports and leisure products.

The Performance Chemicals Division helps its customers to improve their products and processes. It gives special characteristics to countless every products from diapers, paper, vitamins for food supplements or UV filters for sunscreen to products for the oil, automotive and coatings industries as well as for the production of textiles and leather. The acquisition of Ciba strengthens the existing businesses and extends the portfolio to include plastic additives and products for water treatment and mining applications.

The portfolio of Functional Solutions Division comprises automotive and industrial catalysts, automotive and industrial coatings, as well as concrete admixtures and construction systems such as tile adhesives and architectural coatings.

Agricultural Solutions Division contains crop protection products guard against fungal diseases, insects and weeds and it increases quality and secures crop yields.

Oil & Gas Division focuses its exploration and production on oil and gas-rich regions in Europe, North Africa, South America, Russia and the Caspian Sea region. Together with its Russian partner Gazprom, it is active in the trading, transport and storage of natural gas in Europe.

Activities not allocated to a particular division are reported under Other and include, among other things, Styrenics as well as our fertilizer activities. In addition, the sale of raw materials, engineering and other services, rental income and leases are reported under Other.

The integration of Ciba, acquired in April 2009, was fully completed in the first quarter of 2010. Together with former Ciba’s business, BASF is becoming a leading supplier of paper chemicals. BASF also became the world’s second-largest provider of raw materials for the coatings and paints industry. Ciba’s plastic additives business extended BASF’s portfolio to cover important product segments such as UV stabilizers and antioxidants, making BASF the world leader in plastic additives.

There are four former Ciba sites in Greater China, with 1,100 employees, in Qingdao, Shandong, Zhejiang, Jiangsu, Shanghai as well as Kaohsiung, Taiwan. These sites are now all integrated into the BASF Greater China organization.

Currently, BASF is expanding its Pudong site in Shanghai, China. In December 2010, ground was broken on a new Innovation Campus for the Asia Pacific region which will open in 2012. Moreover, the BASF Greater China head office will be relocated to the Pudong site from downtown Shanghai.

In order to serve the growing market of western China, BASF will build a large MDI plant in Chongqing. The plant will have an annual production capacity of 400,000 tons. The project broke ground in April 2011, and commercial operation is scheduled for 2014.

Since 1999, BASF has increased its sales by an average of around 20% per year in China (Greater China: Mainland China, Hong Kong and Taiwan). In 2010, it achieved sales of more than €5.8 billion with about 6,980 employees in the Greater China. This means China is currently BASF’s third largest market after Germany and the United States.

BASF currently operates 26 wholly owned subsidiaries and 14 joint ventures in Greater China and maintains a number of sales offices, for example in Hong Kong (the subject BHKL), Beijing, Shanghai, Guangzhou, Nanjing, Qingdao and Taipei. BASF’s business in Greater China includes products such as petrochemicals, inorganics, polymer dispersions, polyurethanes, engineering plastics, coatings, finishing products for the textile and leather industries, electronic materials, intermediates, catalysts, construction chemicals, paper chemicals and care chemicals.

For the year ended 31st December, 2010, the sales of the Group amounted to €63,873.0 million, grew by 26.0% as compared with €50,693.0 million in FY 2009; income from operation was €7,761.0 million, grew by 111.1% as compared with €3,677.0 million in FY 2009.

On the whole, in view of the parentage of BHKL, consider it good for normal business engagements.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.47.10
UK Pound	1	Rs.74.64
Euro	1	Rs.64.42

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%)

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