MIRA INFORM REPORT

Report Date :

02.11.2012

IDENTIFICATION DETAILS

Name :	IPROCHEM CO., LTD.

Registered Office :	35/F Guomao Business Mansion, No. 3005 Nanhu Road, Luohu Disterict, Shenzhen, Guangdong Province 518001 Pr

Country :	China

Financials (as on) :	31.12.2011

Date of Incorporation :	13.09.2004

Com. Reg. No.:	440301103492832

Legal Form :	Limited Liabilities Company

Line of Business :	Subject is engaged in exporting different sorts of pesticide

No. of Employees :	65 employees

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Satisfactory
Payment Behaviour :	Slow but 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 – June 30^th, 2012

Country Name

Previous Rating

(31.03.2012)

Current Rating

(30.06.2012)

China

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 & address

IPROCHEM CO., LTD.

35/F GUOMAO BUSINESS MANSION, NO. 3005 NANHU ROAD, LUOHU DISTERICT

SHENZHEN, GUANGDONG PROVINCE 518001 PR CHINA

TEL: 86 (0) 755-82353001

FAX: 86 (0) 755-82225900

EXECUTIVE SUMMARY

Date of Registration : SEPTEMBER 13, 2004

REGISTRATION NO. : 440301103492832

LEGAL FORM : Limited liabilities company

CHIEF EXECUTIVE : ZHU XIANDING (LEGAL REPRESENTATIVE)

REGISTERED CAPITAL : CNY 11,900,000

staff : 65

BUSINESS CATEGORY : TRADING

Revenue : CNY 395,080,000 (AS OF DEC. 31, 2011)

EQUITIES : CNY 13,520,000 (AS OF DEC. 31, 2011)

WEBSITE : www.iprochem.com

E-MAIL : iprochem@iprochem.com

PAYMENT : AVERAGE

MARKET CONDITION : COMPETITIVE

FINANCIAL CONDITION : FAIRLY STABLE

OPERATIONAL TREND : FAIRLY STEADY

GENERAL REPUTATION : AVERAGE

EXCHANGE RATE : CNY 6.24 = 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

LEGAL STATUS & HISTORY

SC was established as a limited liabilities company of PRC with State Administration of Industry & Commerce (SAIC) under registration No.: 440301103492832 on September 13, 2004.

SC’s Organization Code Certificate No.: 76638595-2

SC’s registered capital: CNY 11,900,000

SC’s paid-in capital: CNY 11,900,000

Registration Change Record:-

Date	Change of Contents	Before the change	After the change
2007-01-22	Registered Capital	CNY 1,000,000	CNY 2,500,000
2007-02-05	Registered Capital	CNY 2,500,000	CNY 4,100,000
2008-07-14	Registered Capital	CNY 4,100,000	CNY 5,600,000
2008-07-14	Registration No.	4403012153604	440301103492832
2008-08-04	Registered Capital	CNY 5,600,000	CNY 11,900,000

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

Name of Shareholder (s)	% of Shareholding
Zhu Xianding	90
He Fuying	5
Yang Zhebin	5

SC’s Chief Executives:-

Position	Name
Legal Representative, Chairman, and General Manager	Zhu Xianding
Supervisor	He Fuying

RECENT DEVELOPMENT

No recent development was found during our checks at present.

SHAREHOLDER CHART & BACKGROUND

Name % of Shareholding

Zhu Xianding 90

He Fuying 5

Yang Zhebin 5

MANAGEMENT

Zhu Xianding, Legal Representative, Chairman and General Manager

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

Ø Gender: M

Ø Age: 50

Ø Qualification: University

Ø Working experience (s):

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

He Fuying, Supervisor

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

Ø Gender: F

BUSINESS OPERATION

SC’s registered business scope includes engaging in industrial projects; selling chemicals; domestic commerce; supplying and selling of commodities (excluding the products privileged, prohibited or franchised); import & export business.

SC is mainly engaged in exporting different sorts of pesticide.

Brand: “IPROCHEM”.

SC’s products mainly include: tricyclazole, tebuconazole, propiconazole, metalaxyl, flutriafol, difenoconazole, carbendazim, diquat, glufosinate-ammonium, fungicides, insecticides, herbicide and rodenticide, etc.

SC sources its materials 100% from domestic market. SC sells 5% of its products in domestic market, and 95% to overseas market, mainly Europe, U.S.A., and Southeast Asia.

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

*Major Customers*

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

Hanseandina Limitada

Quimicos Y Lubricantoes S.A.

Hellmann Worldwide Logistics

Nederagro S.A.

*Major Suppliers*

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

Shanghai Hujiang Biochemistry Co., Ltd.

Zhejiang Jinfanda Bio-chemical Co., Ltd.

Staff & Office:

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

SC is known to have approx. 65 staff at present.

SC owns an area as its operating office & factory of approx. 1,000 sq. meters at the heading address.

RELATED COMPANY

n Tianmen Iprochem Agrochemical Co., Ltd.

According to the above mentioned website, SC has branches in Shanghai, Guangzhou, Hainan, Hong Kong, etc.

SC is known to invested in the following company

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

n Shanghai Bofeng International Trade Co., Ltd.

Date of Registration: July 17, 2007

Registration No.: 310115001024081

Legal Form: Limited Liabilities Company

Chief Executive: Ding Jining

Registered Capital: CNY 1,000,000

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: A trade enquiry currently conducted with SC's supplier(s) reveal the following:

Supplier A

Products sold: glyphosate

Date account opened: Since 2005 to present

Line of credit: N/A

Terms: T/T, 30-60 days

Average monthly sales: N/A

Current balance: N/A

Rating Key : 3

Payment record keys:

1 = Prompt: Payment made before the credit period expires

2 = As agreed terms: Payment made upon due date

3 = Slightly slow but acceptable: Payment made 5 to 20 days beyond agreed terms

4 = Slow: Payment made 16 to 45 days beyond agreed terms

5 = Poor: Payment made over 45 days beyond agreed terms

6 = No comment: Account is newly opened & record is not yet established

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:

Bank of China Shenzhen Dongmen Sub-branch

AC#：810406937008091001

FINANCIALS

Balance Sheet

Unit: CNY’000	As of Dec. 31, 2009	As of Dec. 31, 2010	As of Dec. 31, 2011
Cash	9,300	11,190	7,960
Notes receivable	0	0	0
Accounts receivable	6,030	11,130	3,450
Advances to suppliers	77,680	55,830	62,190
Other receivable	21,220	46,810	27,010
Inventory	16,930	20,310	14,740
Non-current assets within one year	0	0	0
Other current assets	10	0	0
	------------------	------------------	------------------
Current assets	131,170	145,270	115,350
Long-term investments	6,740	6,740	7,450
Fixed assets	15,130	14,280	13,510
Construction in progress	0	0	0
Intangible assets	0	0	0
Long-term prepaid expenses	0	0	0
Deferred income tax assets	0	0	0
Other non-current assets	0	0	0
	------------------	------------------	------------------
Total assets	153,040	166,290	136,310
	=============	=============	=============
Short-term loans	900	10,000	6,080
Notes payable	21,090	48,570	36,280
Accounts payable	9,930	2,150	2,150
Wages payable	110	60	470
Taxes payable	-2,000	-2,530	-1,470
Advances from clients	78,130	59,490	42,850
Other payable	29,070	34,550	36,430
Other current liabilities	0	0	0
	------------------	------------------	------------------
Current liabilities	137,230	152,290	122,790
Non-current liabilities	0	0	0
	------------------	------------------	------------------
Total liabilities	137,230	152,290	122,790
Equities	15,810	14,000	13,520
	------------------	------------------	------------------
Total liabilities & equities	153,040	166,290	136,310
	=============	=============	=============

Income Statement

Unit: CNY’000	As of Dec. 31, 2009	As of Dec. 31, 2010	As of Dec. 31, 2011
Revenue	389,700	518,020	395,080
Cost of sales	359,700	479,020	365,830
Taxes and surcharges	10	10	180
Sales expense	24,820	32,200	24,520
Management expense	1,690	2,130	2,240
Finance expense	2,450	2,570	1,330
Profit before tax	1,040	2,080	1,060
Less: profit tax	210	570	250
Profits	830	1,510	810

Important Ratios

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

	As of Dec. 31, 2009	As of Dec. 31, 2010	As of Dec. 31, 2011
*Current ratio	0.96	0.95	0.94
*Quick ratio	0.83	0.82	0.82
*Liabilities to assets	0.90	0.92	0.90
*Net profit margin (%)	0.21	0.29	0.21
*Return on total assets (%)	0.54	0.91	0.59
*Inventory / Revenue ×365	16 days	15 days	14 days
*Accounts receivable/ Revenue ×365	6 days	8 days	4 days
* Revenue/Total assets	2.55	3.12	2.90
* Cost of sales / Revenue	0.92	0.92	0.93

FINANCIAL COMMENTS

PROFITABILITY: AVERAGE

l The revenue of SC appears fairly good in its line.

l SC’s net profit margin is average in three years.

l SC’s return on total assets is average in three years.

l SC’s cost of sales is fairly high, comparing with its revenue.

LIQUIDITY: AVERAGE

l The current ratio of SC is maintained in a fair level.

l SC’s quick ratio is maintained in a normal level.

l The inventory of SC is maintained in an average level.

l The accounts receivable of SC is maintained in an average level.

l SC’s short-term loans are in an average level.

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

LEVERAGE: FAIR

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.

CONCLUSIONS

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

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.53.79
UK Pound	1	Rs.86.77
Euro	1	Rs.69.71

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.