MIRA INFORM REPORT

Report Date :

11.10.2012

IDENTIFICATION DETAILS

Name :	GENCHEM (CHANGZHOU) CO., LTD.
Registered Office :	8# Binjiang 1st Road, Jiangbian Chemical Industrial Park, Xinbei District,Changzhou, Jiangsu Province, 213127 Pr
Country :	China
Financials (as on) :	31.12.2011
Date of Incorporation :	22.08.2006
Com. Reg. No.:	320400400019176
Legal Form :	Chinese-Foreign Equity Joint Venture Enterprise
Line of Business :	manufacturing and selling chemical products
No. of Employees :	160

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 :	Regular
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	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 & address

Genchem (Changzhou) co., ltd.

8# BINJIANG 1^ST ROAD, JIANGBIAN CHEMICAL INDUSTRIAL PARK, XINBEI DISTRICT,CHANGZHOU, JIANGSU PROVINCE, 213127 PR CHINA

TEL: 86 (0) 519-85095778/85720002 FAX: 86 (0) 519-85720007

EXECUTIVE SUMMARY

INCORPORATION DATE : AUG. 22, 2006

REGISTRATION NO. : 320400400019176

REGISTERED LEGAL FORM : CHINESE-FOREIGN EQUITY JOINT VENTURE ENTERPRISE

CHIEF EXECUTIVE : CHEN YANG (CHAIRMAN)

STAFF STRENGTH : 160

REGISTERED CAPITAL : CNY 50,000,000

BUSINESS LINE : MANUFACTURING & TRADING

TURNOVER : CNY 90,290,000 (AS OF DEC. 31, 2011)

EQUITIES : CNY 61,260,000 (AS OF DEC. 31, 2011)

PAYMENT : AVERAGE

MARKET CONDITION : AVERAGE

FINANCIAL CONDITION : FAIRLY STABLE

OPERATIONAL TREND : STEADY

GENERAL REPUTATION : AVERAGE

EXCHANGE RATE : CNY 6.2933 = 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

Company Status: Chinese-foreign equity joint venture enterprise

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 investing parties are free to agree on method of profit distribution and liabilities bearing according to the proportion of capital investment. Each investing parties contributes funds, tangible assets, technology & etc. The board of directors excises the high authority. 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 that have good competition position in international market may extend beyond the 50 years limit.

SC was registered as a Chinese-foreign equity joint venture enterprise at local Administration for Industry & Commerce (AIC-The official body of issuing and renewing business license) on Aug. 22, 2006.

SC’s registered business scope includes manufacturing Triethyl, triethylborane, hydrochloric acid (by-product); selling self-made products. Manufacturing tert-butoxide, sodium tert-butoxide, sodium tert-amyl alcohol, tert-butyl dicarbonate, orthopropionate, trimethyl, Triethyl orthobutyrate Trimethyl orthobutyrate, orthovalerate trimethyl orthovalerate triethyl tetraethyl orthocarbonate, 4 - chlorobutanol, p-chlorophenyl glycine, o-chlorophenyl glycine, phenoxy, phosphorus oxychloride, N, N-dimethyl amino-3 - chloro propane hydrochloride, N-hydroxy succinimide, benzyl-N-succinimidyl carbonate, 2 - chlorobenzyl yl-N-succinimidyl carbonate, 2 - bromobenzyl-N - succinimidyl carbonate, cyclopentyl-N-succinimidyl carbonate, 9 - fluorenyl-methyl-N-succinimidyl carbonate, N, N'-di-succinimidyl group carbonate, potassium chloride (by-product); selling self-made products.

SC is mainly engaged in manufacturing and selling chemical products.

Chen Yang is legal representative and chairman of SC at present.

SC is known to have approx. 160 employees at present.

SC is currently operating at the above stated address, and this address houses its operating office and factory in the industrial zone of Changzhou. Detailed premise information is not available at present.

http://www.genchem.cn/ The design is professional and the content is well organized. At present, the web is both in Chinese and English versions.

E-mail: marketing@genchem.cn ; sales@genchem.cn

Qualification:

===========

SC has obtained the ISO9001:2008 quality management system and ISO14001:2004 environmental management system certification.

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

MAIN SHAREHOLDERS:

Name % of Shareholding

Genchem China Limited (Hong Kong) 74

Yabang Investment Holding Group Co., Ltd. 26

Genchem China Limited (Hong Kong)

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

Registration no.: 0854628

Legal form: private

Incorporation date: 2003-7-25

Yabang Investment Holding Group Co., Ltd.

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

Yabang Investment Holding Group Co., Ltd. was formerly named as Yabang Chemical Group Co., Ltd.

Yabang Investment Holding Group Co., Ltd is one of key 100 cultivation enterprises of Jiangsu Province, high-tech enterprises in Jiangsu Province, the State Torch Program key high-tech enterprises, with a post-doctoral research station and provincial level technical center, ranked as one of the top 50 in China’s petrochemical industry. "YABANG "trademark is approved by the State Administration for Industry and Commerce Trademark Office as" China’s well-known trademarks."

Legal representative: Xu Xiaochu

Add: Niutang Town, Nanmenwai, Changzhou, Jiangsu

Tel: 086-519-88319898 86396718

E-mail: sales@yabang.com

Web: http://www.yabang.com/

Legal representative and chairman:

Chen Yang (certificate # 103291915) 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 Changzhou Genchem Co., Ltd. as legal representative.

Vice-chairman:

Mr. Xu Xiaochu, born in 1951, he is currently responsible for the daily management of SC.

Working Experience(s):

At present Working in SC as vice-chairman.

Also working in Yabang Investment Holding Group Co., Ltd. as legal representative.

Vice-chairman and general manager:

Ms. Wang Yuqin, born in 1967, she is currently responsible for the daily management of SC.

Working Experience(s):

At present Working in SC as vice-chairman and general manager.

Directors:

Liang Yushen

Zhang Dongliang

Supervisors:

Jiang Guoyuan

Xia Yong

SC is mainly engaged in manufacturing and selling chemical products.

SC’s products mainly include:

Alkali Metal Alcoholate

Ortho Ester

Amino acid Protecting Reagent

Protected Amino Acid

Fluorophenol Custom

SC sources its materials 100% from domestic market. SC sells its products 95% in domestic market, and 5% 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.

According to http://www.yabang.com/

· Jiangsu Yabang Dyestuff Co., Ltd.

· Jiangsu Yabang Coating Co., Ltd.

· Jiangsu Yabang Pigment Co., Ltd.

· Jiangsu Yabang Pharmaceutical (Group) Co., Ltd.

· Changzhou Yabang Veterinary Co., Ltd.

· Changzhou Genchem Co., Ltd.

Etc.

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 declined to release its banking details.

Balance Sheet

Unit: CNY’000

	As of Dec. 31, 2011
Cash & bank	18,440
Inventory	19,630
Bills receivable	1,050
Accounts receivable	13,390
Other Accounts receivable	5,400
Advances to suppliers	2,150
To be apportioned expense	90
Other current assets	10
	------------------
Current assets	60,160
Fixed assets net value	40,030
Projects under construction	3,420
Projects materials	390
Long-term deferred expense	870
Long-term investment	0
Intangible and other assets	35,230
	------------------
Total assets	140,100
	=============
Short loans	50,000
Accounts payable	7,530
Advance from customers	670
Other Accounts payable	5,000
Notes payable	13,610
Taxes payable	1,440
Withdraw the expenses in advance	410
Surcharge payable	170
Other current liabilities	10
	------------------
Current liabilities	78,840
Long term liabilities	0
	------------------
Total liabilities	78,840
Equities	61,260
	------------------
Total liabilities & equities	140,100
	=============

Income Statement

Unit: CNY’000

	As of Dec. 31, 2011
Turnover	90,290
Cost of goods sold	66,230
Taxes and additional of main operation	514
Sales expense	1,300
Management expense	8,230
Finance expense	3,447
Non-operating income	110
Non-operating expense	0
Profit before tax	10,630
Less: profit tax	1,400
Profits	9,230

Important Ratios

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

	As of Dec. 31, 2011
*Current ratio	0.76
*Quick ratio	0.51
*Liabilities to assets	0.56
*Net profit margin (%)	10.22
*Return on total assets (%)	6.59
*Inventory /Turnover ×365	79 days
*Accounts receivable/Turnover ×365	54 days
*Turnover/Total assets	0.64
* Cost of goods sold/Turnover	0.73

PROFITABILITY: FAIRLY GOOD

l The turnover of SC appears average in its line.

l SC’s net profit margin appears fairly good.

l SC’s return on total assets appears fairly good.

l SC’s cost of goods sold is average, 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 fair 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 The short-term loan of SC appears large in 2011.

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

LEVERAGE: AVERAGE

l The debt ratio of SC is average.

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. The large amount of short-term loan could be a threat to SC’s financial condition.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.53.04
UK Pound	1	Rs.84.83
Euro	1	Rs.68.21

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.