MIRA INFORM REPORT

Report Date :

24.11.2012

IDENTIFICATION DETAILS

Name :	Junan Dubang Cereals, Oils and Foodstuffs CO., LTD.

Registered Office :	West Daxihuan Road, Junan Economic Development Zone, Linyi, Shandong Province, 276600 PR

Country :	China

Financials (as on) :	31.12.2011

Date of Incorporation :	04.12.2002

Com. Reg. No.:	371327228003923

Legal Form :	Limited Liabilities Company

Line of Business :	Selling of Agricultural and Sideline Products.

No. of Employees :	15

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Status :	Moderate

Payment Behaviour :	No Complaint

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

Junan Dubang Cereals, Oils and Foodstuffs CO., LTD.

west daxihuan road, junan economic development zone, linyi, shandong province, 276600 PR CHINA

TEL: 86 (0) 539-7650738/7650739

FAX: 86 (0) 539-7650737

EXECUTIVE SUMMARY

INCORPORATION DATE : dec. 4, 2002

REGISTRATION NO. : 371327228003923

REGISTERED LEGAL FORM : Limited liabilities company

chief executive : MR. nie lansong (CHAIRMAN)

STAFF STRENGTH : 15

REGISTERED CAPITAL : CNY 3,000,000

BUSINESS LINE : TRADING

TURNOVER : CNY 66,310,000 (AS OF DEC. 31, 2011)

EQUITIES : CNY 3,260,000 (AS OF DEC. 31, 2011)

PAYMENT : AVERAGE

MARKET CONDITION : average

FINANCIAL CONDITION : Fairly stable

OPERATIONAL TREND : fairly STEADY

GENERAL REPUTATION : average

EXCHANGE RATE : CNY 6.2305 = 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

HISTORY

Note: SC’s complete name should be the heading one; and the given tel. no. (00 86 539 7288896) does not belong to SC.

SC was registered as a limited liabilities co. at local Administration for Industry & Commerce (AIC - The official body of issuing and renewing business license) on Dec. 4, 2002.

Company Status: Limited liabilities co.

This form of business in PR China is defined as a legal person. No more than fifty shareholders contribute its registered capital jointly. Shareholders bear limited liability to the extent of shareholding, and the co. is liable for its debts only to extent of its total assets. The characteristics of this form of co. are as follows:

Upon the establishment of the co., an investment certificate is issued to the each of shareholders.

The board of directors is comprised of three to thirteen members.

The minimum registered capital for a co. is CNY 30,000.

Shareholders may take their capital contributions in cash or by means of tangible assets or intangible assets such as industrial property and non-patented technology.

Cash contributed by all shareholders must account for at least 30% of the registered capital.

Existing shareholders have pre-exemption right to purchase shares of the co. offered for sale by the other shareholders and to subscribe for the newly increased registered capital of the co.

SC’s registered business scope includes screening and selling peanuts, fruits and vegetables, Chinese chestnut; selling wheat, beans, corn, melon seeds; exporting commodities and importing mechanical equipments, components, raw materials needed by themselves, excluding the goods prohibited or limited by the country.

SC is mainly engaged in selling agricultural and sideline products.

Mr. Nie Lansong is legal representative and chairman of SC at present.

SC is known to have approx. 15 employees at present.

SC is currently operating at the above stated address, and this address houses its operating office in Junan Economic Development zone of Linyi. SC’s employee refused to release the detailed information of the premise.

WEB SITE

SC is not known to host website of its own at present.

KEY EVENTS/RECENT DEVELOPMENT

No significant events or changes were found during our checks with local AIC.

OWNERSHIP/MANAGEMENT

MAIN SHAREHOLDERS:

Name % of Shareholding

Nie Lansong 83.33

Du Bingzhai 16.67

MANAGEMENT

l Legal representative and chairman:

Mr. Nie Lansong is currently responsible for the overall management of SC.

Working Experience(s):

At present Working in SC as legal representative and chairman.

BUSINESS OPERAITONS

SC is mainly engaged in selling agricultural and sideline products.

SC’s products mainly include: peanuts, fruits and vegetables, Chinese chestnut, wheat, beans, corn, melon seeds, etc.

SC sources its materials 100% from domestic market. SC sells 10% of its products in domestic market, and 90% to overseas market.

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.

Note: SC’s management refused to release its main suppliers and clients.

RELATED COMPANIES

SC is not known to have any subsidiary at present.

PAYMENT

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.

BANKING

SC declined to release its banking details.

FINANCIAL HIGHLIGHTS

Balance Sheet

Unit: CNY’000

	As of Dec. 31, 2011
Cash & bank	9,930
Inventory	3,600
Accounts receivable	4,620
Other Accounts receivable	3,210
Advances to suppliers	0
Subsidy receivable	940
Other current assets	10
	------------------
Current assets	22,310
Fixed assets net value	1,260
Long-term investment	0
Intangible assets	750
Other assets	2,010
	------------------
Total assets	26,330
	=============
Short loans	24,000
Accounts payable	0
Advance from customers	0
Other Accounts payable	230
Notes payable	0
Taxes payable	-1,170
Other current liabilities	10
	------------------
Current liabilities	23,070
Long term liabilities	0
	------------------
Total liabilities	23,070
Equities	3,260
	------------------
Total liabilities & equities	26,330
	=============

Income Statement

Unit: CNY’000

	As of Dec. 31, 2011
Turnover	66,310
Cost of goods sold	63,200
Taxes and additional of main operation	110
Sales expense	870
Management expense	760
Finance expense	1,060
Profit before tax	300
Less: profit tax	70
Profits	230

Important Ratios

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

	As of Dec. 31, 2011
*Current ratio	0.97
*Quick ratio	0.81
*Liabilities to assets	0.88
*Net profit margin (%)	0.35
*Return on total assets (%)	0.87
*Inventory /Turnover ×365	20 days
*Accounts receivable/Turnover ×365	25 days
*Turnover/Total assets	2.52
* Cost of goods sold/Turnover	0.95

FINANCIAL COMMENTS

PROFITABILITY: AVERAGE

l The turnover of SC appears average in its line.

l SC’s net profit margin is average.

l SC’s return on total assets is average.

l SC’s cost of goods sold is fairly high, comparing with its turnover.

LIQUIDITY: FAIR

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 loan appears large in 2011.

l SC’s turnover is in a fairly good level, comparing with the size of its total assets.

LEVERAGE: FAIR

l The debt ratio of SC is high.

l The risk for SC to go bankrupt is average.

Overall financial condition of the SC: Fairly stable.

REMARKS

SC is considered small-sized in its line with fairly stable financial conditions. The large amount of short loans could be a threat to SC’s financial condition.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.55.34
UK Pound	1	Rs.88.30
Euro	1	Rs.71.37

INFORMATION DETAILS

Report Prepared by :

SMN

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.