MIRA INFORM REPORT

Report Date :

05.12.2012

IDENTIFICATION DETAILS

Name :	BOSTD GEOSYNTHETICS QINGDAO LTD.
Registered Office :	Qingda Industrial Zone, Chengyang District Qingdao, Shandong Province 266111 Pr
Country :	China
Financials (as on) :	31.12.2011
Date of Incorporation :	02.11.2000
Reg. No.:	370200018064262
Legal Form :	SHARES LIMITED company
Line of Business :	Manufacturing and Selling Geotechnical Synthetic Material.
No. of Employees :	150

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 – June 30^th, 2012

Country Name	Previous Rating (31.03.2011)	Current Rating (30.06.2012)
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, creation of a diversified banking system, development of stock markets, rapid growth of the private sector, 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 it considers important to "economic security," explicitly looking to foster globally competitive national champions. After keeping its currency tightly linked to the US dollar for years, in July 2005 China revalued its currency by 2.1% against the US dollar and 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. 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 2010 stood as the second-largest economy in the world after the US, having surpassed Japan in 2001. The dollar values of China's agricultural and industrial output each exceed those of the US; China is second to the US in the value of services it produces. Still, per capita income is below the world average. The Chinese government faces numerous economic challenges, including: (a) reducing its high domestic savings rate and correspondingly low domestic demand; (b) sustaining adequate job growth for tens of millions of migrants and new entrants to the work force; (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 2011 more than 250 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. In 2010-11, China faced high inflation resulting largely from its credit-fueled stimulus program. Some tightening measures appear to have controlled inflation, but GDP growth consequently slowed to near 9% for 2011. An economic slowdown in Europe is expected to further drag Chinese growth in 2012. Debt overhang from the stimulus program, particularly among local governments, and a property price bubble challenge policy makers currently. The government's 12th Five-Year Plan, adopted in March 2011, emphasizes continued economic reforms and the need to increase domestic consumption in order to make the economy less dependent on exports in the future. However, China has made only marginal progress toward these rebalancing goals.

Source : CIA

Company Name and address

BOSTD GEOSYNTHETICS QINGDAO LTD.

QINGDA INDUSTRIAL ZONE, CHENGYANG DISTRICT

QINGDAO, SHANDONG PROVINCE 266111 PR CHINA

TEL: 86 (0) 532-87807777

FAX: 86 (0) 532-87806789

EXECUTIVE SUMMARY

Date of Registration : november 2, 2000

REGISTRATION NO. : 370200018064262

LEGAL FORM : SHARES LIMITED company

CHIEF EXECUTIVE : yang baohe (LEGAL REPRESENTATIVE)

REGISTERED CAPITAL : CNY 52,000,000

staff : 150

BUSINESS CATEGORY : manufacturing

Revenue : CNY 106,150,000 (AS OF DEC. 31, 2011)

EQUITIES : CNY 107,045,000 (AS OF DEC. 31, 2011)

WEBSITE : www.bostd.com

E-MAIL : marketing@bostd.com

PAYMENT : AVERAGE

MARKET CONDITION : COMPETITIVE

FINANCIAL CONDITION : FAIRly stable

OPERATIONAL TREND : fairly STEADY

GENERAL REPUTATION : AVERAGE

EXCHANGE RATE : CNY 6.23 = USD 1

Adopted abbreviations (as follows)

SC - Subject Company (the company inquired by you)

N/A – Not available

CNY – China Yuan Ren Min Bi

OPERATIONAL TREND & GENERAL REPUTATION

This section aims at indicating the relative positions of SC in respect of its operational trend & general reputation

Operational Trend:- General Reputation:-

Upward Excellent

Steady Good

Fairly Steady Fairly Good

Ordinary Average

Fair Fair

Stagnant Detrimental

Downward Not known

Not known Not yet be determined

Not yet be determined

LEGAL STATUS & HISTORY

SC was established as a shares limited company of PRC with State Administration of Industry & Commerce (SAIC) under registration No.: 370200018064262 on November 2, 2000.

SC’s Organization Code Certificate No.: 72404668-8

SC’s Tax No.: 370214724046688

SC’s registered capital: CNY 52,000,000

SC’s paid-in capital: CNY 52,000,000

Registration Change Record:-

Date	Change of Contents	Before the change	After the change
2007-04-27	Company Name	Qingdao Etsong Geogrids Co., Ltd.	Bostd Geosynthetics Qingdao Ltd.

Current Co search indicates SC’s shareholders & chief executives are as follows:-

Name of Shareholder (s)	% of Shareholding
Beijing Orient Science & Technology Development Co., Ltd.	50.77
Qingdao Bangda Real Estate Development Co., Ltd.	13.27
Shandong Weifengda Architectural Engineering Co., Ltd.	4.42
Qingdao Xuyu Investment Management Service Co., Ltd.	4.19
Qingdao University of Science & Technology	1.73
Other 80 individuals	25.62

SC’s Chief Executives:-

Position	Name
Legal Representative, Chairman, and General Manager	Yang Baohe

RECENT DEVELOPMENT

No recent development was found during our checks at present.

SHAREHOLDER CHART & BACKGROUND

Name % of Shareholding

Beijing Orient Science & Technology Development Co., Ltd. 50.77

Qingdao Bangda Real Estate Development Co., Ltd. 13.27

Shandong Weifengda Architectural Engineering Co., Ltd. 4.42

Qingdao Xuyu Investment Management Service Co., Ltd. 4.19

Qingdao University of Science & Technology 1.73

Other 80 individuals 25.62

Beijing Orient Science & Technology Development Co., Ltd.

-------------------------------------------------------------------------------

Registration No.: 110105001632810

Date of Registration: August 21, 2000

Legal Form: Limited Liabilities Company

Registered Capital: CNY 16,000,000

Legal Representative: Yang Baohe

Qingdao Bangda Real Estate Development Co., Ltd.

--------------------------------------------------------------------

Registration No.: 370211228006177

Date of Registration: March 5, 1998

Legal Form: Limited Liabilities Company

Registered Capital: CNY 100,000,000

Legal Representative: Zhang Yuning

Shandong Weifengda Architectural Engineering Co., Ltd.

--------------------------------------------------------------------------

Registration No.: 370000228022056

Qingdao Xuyu Investment Management Service Co., Ltd.

--------------------------------------------------------------------------

Registration No.: 370214230024696

Legal Form: Limited Liabilities Company

Registered Capital: CNY 2,464,000

Legal Representative: Xia Fei

MANAGEMENT

Yang Baohe , Legal Representative, Chairman, and General Manager

----------------------------------------------------------------------------------------------------

Gender: M

Qualification: University

Working experience (s):

At present, working in SC as legal representative, chairman, and general manager

Also working in Beijing Orient Science & Technology Development Co., Ltd. as legal representative

BUSINESS OPERATION

SC’s registered business scope includes manufacturing and selling geotechnical synthetic material; selling building materials, plastic raw materials; importing and exporting goods and technology.

SC is mainly engaged in manufacturing and selling geotechnical synthetic material.

Brand:

SC’s products mainly include: biaxial e’grid products, uniaxial e’grid products

SC sources its materials 100% from domestic market. SC sells 75% of its products in domestic market, and 25% to overseas market.

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

*Major Customer:

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

Hanes Converting Co.

Staff & Office:

--------------------------

SC is known to have approx. 150 staff at present.

SC owns an area as its operating office & factory of approx. 20,000 sq. meters at the heading address.

RELATED COMPANY

SC is not known to have any subsidiary at present.

PAYMENT

Overall payment appraisal:

( ) Excellent ( ) Good (X) Average ( ) Fair ( ) Poor ( ) Not yet be 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.

BANKING

Basic Bank:

China Construction Bank Qingdao Branch Licang Sub-branch

AC#: 37101986510050227032

FINANCIALS

Balance Sheet

Unit: CNY’000	As of Dec. 31, 2011
Cash	34,129
Notes receivable	800
Accounts receivable	65,523
Advances to suppliers	10,347
Other receivable	4,636
Inventory	55,802
Non-current assets within one year	0
Other current assets	0
	------------------
Current assets	171,237
Fixed assets	55,368
Construction in progress	115
Intangible assets	2,123
Long-term prepaid expenses	0
Deferred income tax assets	0
Other non-current assets	0
	------------------
Total assets	228,843
	=============
Short-term loans	83,000
Notes payable	22,054
Accounts payable	4,768
Wages payable	0
Taxes payable	2,709
Advances from clients	0
Other payable	1,955
Other current liabilities	39
	------------------
Current liabilities	114,525
Non-current liabilities	7,273
	------------------
Total liabilities	121,798
Equities	107,045
	------------------
Total liabilities & equities	228,843
	=============

Income Statement

Unit: CNY’000	As of Dec. 31, 2011
Revenue	106,150
Cost of sales	62,540
Sales expense	7,730
Management expense	10,500
Finance expense	4,460
Profit before tax	20,490
Less: profit tax	3,070
Profits	17,420

Important Ratios

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

	As of Dec. 31, 2011
*Current ratio	1.50
*Quick ratio	1.01
*Liabilities to assets	0.53
*Net profit margin (%)	16.41
*Return on total assets (%)	7.61
*Inventory / Revenue ×365	192 days
*Accounts receivable/ Revenue ×365	226 days
* Revenue/Total assets	0.46
* Cost of sales / Revenue	0.59

FINANCIAL COMMENTS

PROFITABILITY: FAIRLY GOOD

The revenue of SC appears fairly good in its line.

SC’s net profit margin is good.

SC’s return on total assets is fairly good.

SC’s cost of sales is low, comparing with its revenue.

LIQUIDITY: FAIR

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

SC’s quick ratio is maintained in a fairly good level.

The inventory of SC appears large.

The accounts receivable of SC appears large.

The short-term loans of SC appear large.

SC’s revenue is in a fair 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.

CONCLUSIONS

SC is considered medium-sized in its line with fairly stable financial conditions. The large amount of inventory, accounts receivable and short-term loans may be a threat to SC’s financial condition.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.54.94
UK Pound	1	Rs.88.42
Euro	1	Rs.71.71

INFORMATION DETAILS

Report Prepared by :

SDA

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.