MIRA INFORM REPORT

Report Date :

14.05.2012

IDENTIFICATION DETAILS

Name :	KRATON POLYMERS TRADING (SHANGHAI) co., ltd.
Registered Office :	Room 1601-1603, 16/F, Phase Ii, Henglong Plaza, No. 1366 Nanjing West Road, Shanghai, 200040 Pr
Country :	China
Financials (as on) :	31.12.2010
Date of Incorporation :	17.05.2004
Com. Reg. No.:	310115400150322
Legal Form :	Wholly Foreign-Owned Enterprise
Line of Business :	Selling imported high-performance polymers
No. of Employees :	35

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 – March 31^st, 2012

Country Name	Previous Rating (31.12.2011)	Current Rating (31.03.2012)
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 and address

KRATON POLYMERS TRADING (SHANGHAI) co., ltd.

ROOM 1601-1603, 16/F, PHASE II, HENGLONG PLAZA, NO. 1366 NANJING WEST ROAD, SHANGHAI, 200040 PR CHINA

TEL: 86 (0) 21-62896161/50464899 FAX: 86 (0) 21-62895091

EXECUTIVE SUMMARY

INCORPORATION DATE : MAY 17, 2004

REGISTRATION NO. : 310115400150322

REGISTERED LEGAL FORM : wholly foreign-owned enterprise

CHIEF EXECUTIVE : MR. STEPHEN WILLIAM DUFFY (CHAIRMAN)

STAFF STRENGTH : 35

REGISTERED CAPITAL : USD 1,400,000

BUSINESS LINE : TRADING

TURNOVER : CNY 255,120,000 (AS OF DEC. 31, 2010)

EQUITIES : CNY 22,880,000 (AS OF DEC. 31, 2010)

PAYMENT : AVERAGE

MARKET CONDITION : competitive

FINANCIAL CONDITION : FAIRLY stable

OPERATIONAL TREND : STEADY

GENERAL REPUTATION : AVERAGE

EXCHANGE RATE : CNY 6.56 = 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

Note: The given address “No. 1266 Nanjing West Road” should be “No. 1366 Nanjing West Road.”, and the telephone number “91 11 29230324/41631366”and fax number “+91 11 41631534” belongs to SC’s business contact person in India.

SC was registered as a wholly foreign-owned enterprise at local Administration for Industry & Commerce (AIC - The official body of issuing and renewing business license) on May 17, 2004.

Company Status: Wholly foreign-owned enterprise.

This form of business in PR China is defined as a legal person. It is a limited co. established within the territories of PR China with capital provided totally by the foreign investors. More than one foreign investor may jointly invest in a wholly foreign-owned enterprise. The investing party/parties solely exercise management, reap profit and bear risks and liabilities by themselves. This form of companies usually have a limited duration is extendible upon approval of Examination and Approval Authorities.

SC’s registered business scope includes international trade, entrepot trade, bonded area enterprise trade and trade agent; the polymer-based storage (except dangerous goods) business within bonded area, technical services; commercial simple processing and display of goods within bonded area; trade advisory services; rubber and its products (excluding natural rubber) wholesales, commission agency (excluding auction) and the import and export business, and providing related services. (with permit if needed)

SC is mainly engaged in selling imported high-performance polymers.

Mr. Stephen William Duffy is the legal representative and chairman of SC at present.

SC is known to have approx. 35 employees at present.

SC is currently operating at the above stated address, and this address houses its operating office in the commercial zone of Shanghai. Our checks reveal that SC rents the total premise about 600 square meters.

http://www.kratonpolymers.cn/ The website belongs to Kraton Performance Polymers Inc. and also includes SC’s contact information. The design is professional and the content is well organized. At present it is in Chinese and English versions.

Email: Sales.Inquiry-China@Kraton.com

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

MAIN SHAREHOLDERS:

Name % of Shareholding

Kraton Polymers Holdings B.V. (Netherlands) 100

Commerce Number: 27182100

Add.: 601,Vondelingenweg,Vondelingenplaat Rt, 3196KK

l Legal representative and chairman:

Mr. Stephen William Duffy, American, earned a B.A. degree from Duke University and J.D. degree from Southern Methodist University, 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 Kraton Performance Polymers Inc. as Vice President, General Counsel and Secretary

SC is mainly engaged in selling imported high-performance polymers.

SC’s products mainly include: Kraton D (SBS), Kraton D (SIS), Kraton G (SEBS, SEPS), Kraton FG, Kraton IR, Kraton IR Latex, Nexar Polymers, etc.

Brand: Kraton®

SC sources its materials 100% from overseas market, mainly Southeast Asia and America. SC sells 100% of its products in domestic market.

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 and Credit of 30-60 days.

SC’s management declined to release its major suppliers and clients.

Related company (according to the above website):

Kraton Polymers U.S. LLC

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

15710 John F. Kennedy Blvd. Suite 300 Houston, TX 77032

Tel: +1-800-4-Kraton

+1-800-457-2866

+1-281-504-4950

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.

SC’s management declined to release its bank details.

Balance Sheet

Unit: CNY’000

	as of Dec. 31, 2009	as of Dec. 31, 2010
Cash & bank	5,110	8,460
Inventory	50,860	38,420
Accounts receivable	19,650	37,170
Advances to suppliers	30	0
Notes receivable	0	0
Other receivables	3,660	1,660
Other current assets	620	310
	------------------	------------------
Current assets	79,930	86,020
Fixed assets	4,690	8,380
Projects under construction	0	0
Long term investment	0	0
Other assets	190	130
	------------------	------------------
Total assets	84,810	94,530
	=============	=============
Short loans	0	0
Accounts payable	68,590	65,810
Advances from clients	810	0
Notes payable	0	0
Other payable	2,620	3,800
Salaries and welfare payable	0	0
Taxes payable	580	2,040
Other current liabilities	0	0
	------------------	------------------
Current liabilities	72,600	71,650
Long term liabilities	0	0
	------------------	------------------
Total liabilities	72,600	71,650
Equities	12,210	22,880
	------------------	-----------------
Total liabilities & equities	84,810	94,530
	=============	=============

Income Statement

Unit: CNY’000

	as of Dec. 31, 2010
Turnover	255,120
Cost of goods sold	195,490
Sales expense	6,860
Management expense	12,230
Finance expense	-1,430
Profit before tax	11,400
Less: profit tax	730
Profits	10,670

Important Ratios

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

	as of Dec. 31, 2009	as of Dec. 31, 2010
*Current ratio	1.10	1.20
*Quick ratio	0.40	0.66
*Liabilities to assets	0.86	0.76
*Net profit margin (%)	/	4.18
*Return on total assets (%)	/	11.29
*Inventory /Turnover ×365	/	55 days
*Accounts receivable/Turnover ×365	/	53 days
*Turnover/Total assets	/	2.70
* Cost of goods sold/Turnover	/	0.77

PROFITABILITY: FAIRLY GOOD

l The turnover of SC appears fairly good in its line in 2010.

l SC’s net profit margin is average in 2010.

l SC’s return on total assets is fairly good in 2010.

l SC’s cost of goods sold is average in 2010, comparing with its turnover.

LIQUIDITY: AVERAGE

l The current ratio of SC is maintained in a normal level in both 2 years.

l SC’s quick ratio is maintained in a fair level in both 2 years.

l The inventory of SC appears fairly large in both 2 years.

l The accounts receivable of SC appears average.

l There is no short-term loan of SC in both 2 years.

l SC’s turnover is in an average level in 2010, comparing with the size of its total assets.

LEVERAGE: AVERAGE

l The debt ratio of SC is fairly high.

l The risk for SC to go bankrupt is average.

Overall financial condition of the SC: Fairly Stable.

SC is considered medium-sized in its line with fairly stable financial conditions.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.53.64
UK Pound	1	Rs.86.42
Euro	1	Rs.69.29

INFORMATION DETAILS

Report Prepared by :

MNL

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.