MIRA INFORM REPORT

Report Date :

09.01.2012

IDENTIFICATION DETAILS

Name :	QINGDAO BEAUTOP INDUSTRY CO. LTD
Registered Office :	No.9, Longjiang Rd, Tieshan Industrial Park, Jiaonan, Qingdao City, Shandong Province
Country :	China
Financials (as on) :	31.12.2010
Date of Incorporation :	17.07.2009
Com. Reg. No.:	370284410000369
Legal Form :	Sino-Foreign Joint Venture
Line of Business :	Manufacture and sales of hairdressing and beauty products
No. of Employees :	80

RATING & COMMENTS

MIRA’s Rating :

Ca

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	100,000.00 Chinese Yuan
Status :	Moderate
Payment Behaviour :	Unknown
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^th, 2011

Country Name	Previous Rating (30.06.2011)	Current Rating (30.09.2011)
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

Qingdao Beautop Industry Co. Ltd
No.9, Longjiang Rd, Tieshan Industrial Park, Jiaonan, Qingdao City, Shandong Province
266400
Tel :	86 532 82125686 / 82125158
Fax:	86 532 82120607
E-mail:	--
Website:	--

Currency in this report is Chinese Yuan unless otherwise stated.

Exchange Rate: 1 USD=6.31 Chinese Yuan

"--"in this report indicates "unavailable" due to insufficient information or "no comments"

Notes：

The given credit limit of USD 1,500,000 (DA) is much too high. We recommend a credit limit of 100,000 CNY on subject.

EXECUTIVE SUMMARY

DATE OF establishment	JULY.17^th, 2009
Aic Registration No.	370284410000369
REGISTERED LEGAL FORM	sino-foreign joint venture
REGISTERED CAPITAL	12,000,000.00
main BUSINESS	Manufacture and sales of hairdressing and beauty products
SIC Code (China)	4219 manufacture of other arts crafts
employees	80
import and export permits	yes
business scale	Medium
operation trend	Average
TURNOVER	8,168,000.00 (As of Dec.31^st, 2010)
net profit	-963,000.00 (As of Dec.31^st, 2010)
total assets	14,030,000.00 (As of Dec.31^st, 2010)
net worth	11,027,000.00 (As of Dec.31^st, 2010)
base Credie limit	100,000.00
EXCHANGE RATE	1 Usd=6.31CNY (Jan.9^th, 2012)

REGISTRATION

Name	Qingdao Beautop Industry Co. Ltd
AIC Registration Number	370284410000369
Registered address	No.9, Longjiang Rd, Tieshan Industrial Park, Jiaonan, Qingdao City, Shandong Province
Operation address	No.9, Longjiang Rd, Tieshan Industrial Park, Jiaonan, Qingdao City, Shandong Province
Date of Establishment	July.17^th, 2009
Registry	Administration Bureau of Industry and Commerce – Jiaonan, Qingdao
Legal Representative	CHUL SOO KIM
Registered Legal Form	sino-foreign joint venture
Registered Capital	12,000,000.00
Operating Duration	From July.17^th, 2009 to July.17^th, 2029
Changes in Registration	1. Sep.20^th, 2010 Subject company's Legal representative was changed from Jae Hee Kang to CHUL SOO KIM. 2. Sep.20^th, 2010 Subject’s shareholders were changed to QINGDAO MEIERSI TRADING CO. LTD and CHUL SOO KIM From QINGDAO MEIERSI TRADING CO. LTD and Jae Hee Kang.

Sino-foreign joint venture

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 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 which have good competition position in international market may extend beyond the 50 years limit.

REGISTRATION INFO: AVAILABLE

FINANCIAL REPORTS: AVAILABLE

SHAREHOLDERS AND SHARES

As indicated in the following table:

Shareholder	Capital Subscribed	Percentage
CHUL SOO KIM	4,000,000.00	33.33%
QINGDAO MEIERSI TRADING CO. LTD (transliteration)	8,000,000.00	66.67%
Total	12,000,000.00	100%

Shareholder	Way of Investment	Paid-up Percentage
CHUL SOO KIM	--	100%
QINGDAO MEIERSI TRADING CO. LTD (transliteration)	--	100%

Background of major shareholder

Name	QINGDAO MEIERSI TRADING CO. LTD
Address	RM706, No.49, Qutangxia Road, Shinan District, Qingdao City, Shandong Province
Main business	Wholesale of hairdressing and beauty products
Name	CHUL SOO KIM
Gender	Male
Country	South Korea
Certificate No.	GK1755537

AFFILIATE(S)

No affiliate of subject is found after checking.

MANAGEMENT

Name	CHUL SOO KIM
Gender	Male
Title	Chairman
Country	South Korea
Certificate No.	GK1755537
Name	Wang Fuzeng
Gender	Male
Title	Vice chairman
Date of birth	July.11^th, 1968
National ID No.	411002196807110516
Name	Liu Ning
Gender	Female
Title	Director; general manager
Date of birth	May.25^th, 1970
National ID No.	370303197005253148
Name	Qiao Yong
Gender	Male
Title	Supervisor
Date of birth	Mar.3^rd, 1966
National ID No.	370303196603031735

BANKERS INFORMATION

Bank name	Agricultural Bank of China – Jiaonan Sub-branch (Qingdao)
Account No. (CNY)	--
Source of information	Subject’s staff

OFFICE FACILITIES

Geographic Location	No.9, Longjiang Rd, Tieshan Industrial Park, Jiaonan, Qingdao City, Shandong Province
Area	5,000 square meters
Environment and traffic	Average
Property Ownership	Rented

TRADEMARKS AND PATENTS

After checking with the Trademark Office of Chinese Administration Bureau of Industry and Commerce and the State Intellectual Office, no trademarks or patents of SC were found.

MAIN PRODUCTS & SERVICES

Main business	Manufacture and sales of hairdressing and beauty products
Products and services	Subject’s products include wigs, wig caps, toupee and wig supporting parts etc. Its products are mainly exported to USA.
Annual production capacity	wig caps: 60,000; wig stripe: 300,000; toupee: 20,000
Certificates	--

SALES INFORMATION

Export	100%
Regions	USA etc.
Major overseas clients	Amekor Industries Inc.
Payment terms	L/C, T/T
SC’s products are all exported. Its customers are fixed and the sales network needs to be further developed.
The above information was confirmed by SC’s employee

PURCHASE INFORMATION

Main Commodities Purchased	Human hair, chemical fiber filament
Region	Local: 40% Import: 60% (Japan)
Number of Major Suppliers	More than 3
Major suppliers	--
Main Terms of Payment	Local: Prompt payment; on credit Import: L/C, T/T
SC’s major raw material is Kanekalon. It is all imported from Japan in order to ensure the product quality.
The above information was confirmed by SC’s employee.

CREDIT

Subject’s staff was cautious about its purchasing information and refused to disclose its supplier name. Hence no payment comment from the supplier can be provided in this report.

LITIGATION RECORDS

After checking with China Court organization, the local court website and other major searching websites, no litigation record related to subject company in the latest three years is found.

FINANCE

Balance Sheet (Unit: 1,000 Chinese Yuan):

	Dec. 31^st, 2009	Dec. 31^st, 2010
Current assets
Money capital	4,900	1,728
Short-term investment
Notes receivable
Net ball of Account Receivable		3,805
Payment in advance	4,585	323
Subsidy Receivable
Other Account Receivable	1,425	446
Inventory		99
Expenses to be deferred	1	6
Other current assets
Export rebates receivable
Total current Assets	10,911	6,407
Long-term investment
Long-term investment
Original value of fixed assets
Accumulated depreciation
Net fixed assets	390	5,253
Fixed assets depreciation reserve
Net Value of Fixed Assets	390	5,253
Fixed assets in liquidation
Projects being constructed	587
Fixed assets losses in suspense
Total fixed assets	977	5,253
Intangible assets and deferred assets
Intangible assets		2,181
Deferred assets
Total intangible and deferred assets	-	2,181
Other long-term assets
Other long-term assets	295	189
Total assets	12,183	14,030
Current liabilities
Short-term loans
Notes payable
Account payable	230	3,458
Deposit received
Other accounts payable		8
Wages payable		80
Welfare payable
Tax unpaid	-47	-543
Unpaid profit
Accrued expenses
L/T debt due in 1 year
Other current liabilities
Total current liabilities	183	3,003
L/T liabilities
L/T loans
Bonds payable
L/T account payable
Total L/T liabilities	0	0
Deferred tax
Deferred tax
Total liabilities	183	3,003
Owner’s interest
Paid-up capital	12,000	12,000
Contributed surplus
Surplus reserves
Unconfirmed investment loss
Undistributed profits		-973
Minority interest
Total owner’s interest	12,000	11,027
Liabilities and owner’s interest	12,183	14,030

Income Statement (Unit: 1,000 Chinese Yuan):

	Dec. 31^st, 2009	Dec. 31^st, 2010
Main business income		8,168
Main business cost		7,944
Tax and associate charge
Main business profit		224
Other business profit
Operation expenses		38
- management expenses		1,064
Financial expenses		85
Operation profit		-963
Investment profit
Subsidy income
Non business income
- non business expenses
Prior year income adjustment
Total profit		-963
- income tax		0
Minority stock holder’s interest
Net profit		-963

Important Ratios:

	2009	2010
Return on net assets (%)		-8.73
Return on total assets (%)		-6.86
Net profit margin (%)		-11.79
Turnover of total assets		0.58
Turnover of current assets		1.27
Turnover of account receivable		2.15
Inventory turnover		80.24
Asset liability ratio (%)		21.40
Current ratio		2.13
Quick ratio		2.10

Major Financial Information (Unit: 1,000 Chinese Yuan):

	2009	2010
Main business income		8,168
Total profit		-963
Net profit		-963
Total assets	12,183	14,030
Total liabilities	183	3,003
Total owner’s interest	12,000	11,027
Source from	government	government
Whether audited or not	Yes	Yes

Analysis of financial indicator

Long-term solvency: good

Short-term solvency: good

Asset security: good

Inventory status: good

Capital turnover: average

Debt recovery status: poor

Profitability: poor

Return on assets (ROA): poor

Enterprise background: average

Payment records: --

BASE CREDIT LIMIT

100,000.00 Chinese Yuan

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.52.78
UK Pound	1	Rs.81.79
Euro	1	Rs.67.46

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.