MIRA INFORM REPORT

Report Date :

21.09.2012

IDENTIFICATION DETAILS

Name :	FUYANG BEST FLAVOUR PERFUMERY CO., LTD.

Registered Office :	Yingzhou Industrial Park, Fuyang, Anhui Province 236033 Pr

Country :	China

Financials (as on) :	31.12.2011

Date of Incorporation :	19.01.2007

Com. Reg. No.:	341200000025854

Legal Form :	Limited Liabilities Company

Line of Business :	manufacturing and selling spices

No. of Employees :	80 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 :	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

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

Fuyang Best Flavour Perfumery Co., Ltd.

YINGZHOU INDUSTRIAL PARK, FUYANG, ANHUI PROVINCE 236033 PR CHINA

TEL: 86 (0) 558-2115088/2115188

FAX: 86 (0) 558-2115188/2115199

EXECUTIVE SUMMARY

Date of Registration : JANUARY 19, 2007

REGISTRATION NO. : 341200000025854

LEGAL FORM : Limited liabilities company

CHIEF EXECUTIVE : ZHANG YONG (LEGAL REPRESENTATIVE)

REGISTERED CAPITAL : CNY 50,600,000

staff : 80

BUSINESS CATEGORY : manufacturing

Revenue : CNY 226,200,000 (AS OF DEC. 31, 2011)

EQUITIES : CNY 106,210,000 (AS OF DEC. 31, 2011)

WEBSITE : N/A

E-MAIL : N/A

PAYMENT : AVERAGE

MARKET CONDITION : COMPETITIVE

FINANCIAL CONDITION : stable

OPERATIONAL TREND : FAIRLY STEADY

GENERAL REPUTATION : AVERAGE

EXCHANGE RATE : CNY 6.33 = 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 One-Person Limited Liability Company of PRC on January 19, 2007. However, SC changed to present legal form, and was registered as Limited Liabilities Company of PRC with State Administration of Industry & Commerce (SAIC) under registration No.: 341200000025854 in January 2010.

SC’s Organization Code Certificate No.: 79643506-8

SC’s registered capital: CNY 50,600,000

SC’s paid-in capital: CNY 50,600,000

Registration Change Record:-

Date	Change of Contents	Before the change	After the change
2010-1	Registered Capital	CNY 2,000,000	CNY 26,900,000
	Shareholder (s) (% of Shareholding)	Zhang Yong 100%	Zhang Yong 89.2%; Yang Lifang 10.8%
	Registered legal form	One-person limited liability company	Limited liability company
--	Registered Capital	CNY 26,900,000	CNY 50,600,000

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

Name of Shareholder (s)

% of Shareholding

Zhang Yong

89.2

Yang Lifang

10.8

SC’s Chief Executives:-

Position	Name
Legal Representative, Chairman, and General Manager	Zhang Yong
Supervisor	Yang Lifang

RECENT DEVELOPMENT

No recent development was found during our checks at present.

SHAREHOLDER CHART & BACKGROUND

Name % of Shareholding

Zhang Yong 89.2

Yang Lifang 10.8

MANAGEMENT

Zhang Yong, Legal Representative, Chairman and General Manager

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

Ø Gender: M

Ø Age: 46

Ø Qualification: University

Ø Working experience (s):

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

Also working in Shanghai Green Leaf Perfumery Co., Ltd. as legal representative

Yang Lifang, Supervisor

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

Ø Gender: F

Ø Qualification: University

Ø Working experience (s):

Also working in Shanghai Lingfeng International Trade Co., Ltd. as legal representative

BUSINESS OPERATION

***Note: SC started its normal operation in October of 2009.

SC’s registered business scope includes manufacturing and selling natural spices and synthetic spices; purchasing and selling agricultural products.

SC is mainly engaged in manufacturing and selling spices.

SC’s products mainly include:

Natural Menthol Crystal

Peppermint Oil

Mint Terpenes

Menthone

Other products

Synthetic Camphor Powder

Eucalyptus Oil Ex. Globulous

Methyl Salicylate

Lavender Oil

Borneol Flakes

Vanillin

Ethyl Vanillin

Sandalwood

Etc.

SC sources its materials 10% from domestic market, and 90% from overseas market. SC sells 70% of its products in domestic market, and 30% to the overseas markets.

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

*Major Customers:

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

A To Z Nutrition International Inc.

Boody Menthol International Inc.

*Major Supplier:

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

Shanghai Lingfeng International Trade Co., Ltd.

Staff & Office:

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

SC is known to have approx. 80 staff at present.

SC owns an area as its operating office and factory, but the detailed information is unknown.

RELATED COMPANY

n Shanghai Green Leaf Perfumery Co., Ltd.

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

Date of Registration: March 24, 2004

Registration No.: 310105000252405

Legal Form: Limited Liabilities Company

Chief Executive: Zhang Yong

Registered Capital: CNY 1,000,000

n Shanghai Lingfeng International Trade Co., Ltd.

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

Date of Registration: November 30, 2005

Registration No.: 310115000926118

Legal Form: Limited Liabilities Company

Chief Executive: Yang Lifang

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: SC’s suppliers declined to make any comments.

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

AC#: 54789828091001

FINANCIALS

Balance Sheet

Unit: CNY’000	As of Dec. 31, 2008	As of Dec. 31, 2009
Cash	30	1,160
Accounts receivable	0	3,210
Advances to suppliers	0	0
Other receivable	0	80
Inventory	0	6,150
Other current assets	10	20
	------------------	------------------
Current assets	40	10,620
Fixed assets	30	22,620
Construction in progress	22,290	0
Long-term prepaid expenses	0	0
Deferred income tax assets	720	4,010
Other non-current assets	0	0
	------------------	------------------
Total assets	23,080	37,250
	=============	=============
Short-term loans	0	3,000
Accounts payable	0	320
Wages payable	0	10
Tax payable	0	-700
Other payable	21,080	27,070
Other current liabilities	0	640
	------------------	------------------
Current liabilities	21,080	30,340
Non-current liabilities	0	5,000
	------------------	------------------
Total liabilities	21,080	35,340
Equities	2,000	1,910
	------------------	------------------
Total liabilities & equities	23,080	37,250
	=============	=============

Income Statement

Unit: CNY’000	As of Dec. 31, 2009
Revenue	15,330
Cost of sales	14,730
Sales expense	180
Management expense	320
Finance expense	120
Other expense	70
Profit before tax	-90
Less: profit tax	0
Profits	-90

Financial Summary

Unit: CNY’000	As of Dec. 31, 2010
Long term investment	0
Total assets	80,239
	-------------
Long term liabilities	5,000
Total liabilities	33,537
Equities	46,702
	-------------
Revenue	54,381
Profit before tax	-4,026
Less: profit tax	0
Profits	-4,026

Note: The detailed financials for Y2010 are not filed in SAIC.

Balance Sheet

Unit: CNY’000	As of Dec. 31, 2011
Cash	4,260
Notes receivable	0
Accounts receivable	22,310
Advances to suppliers	7,350
Other receivable	5,170
Inventory	19,340
Non-current assets within one year	0
Other current assets	1,290
	------------------
Current assets	59,720
Fixed assets	48,390
Construction in progress	24,950
Deferred income tax assets	0
Other non-current assets	16,720
	------------------
Total assets	149,780
	=============
Short-term loans	0
Notes payable	0
Accounts payable	2,110
Advances from clients	5,130
Other payable	34,160
Other current liabilities	2,170
	------------------
Current liabilities	43,570
Non-current liabilities	0
	------------------
Total liabilities	43,570
Equities	106,210
	------------------
Total liabilities & equities	149,780
	=============

Income Statement

Unit: CNY’000	As of Dec. 31, 2011
Revenue	226,200
Cost of sales	204,340
Sales expense	3,580
Management expense	2,990
Finance expense	12,580
Profit before tax	12,690
Less: profit tax	10
Profits	12,680

Important Ratios

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

	2008	2009	2010	2011
*Current ratio	0.01	0.35	--	1.37
*Quick ratio	0.01	0.15	--	0.93
*Liabilities to assets	0.91	0.95	0.42	0.29
*Net profit margin (%)	--	-0.59	-7.40	5.61
*Return on total assets (%)	--	-0.24	-5.02	8.47
*Inventory / Revenue ×365	--	147 days	--	32 days
*Accounts receivable/ Revenue ×365	--	77 days	--	36 days
* Revenue/Total assets	--	0.41	0.68	1.51
* Cost of sales / Revenue	--	0.96	--	0.90

FINANCIAL COMMENTS

PROFITABILITY: AVEARGE

l The revenue of SC appears average in 2010, and it was rising significantly in 2011.

l SC’s net profit margin is fair in 2009 and 2010 and fairly good in 2011.

l SC’s return on total assets is fair in 2009 and 2010 and fairly good in 2011.

l SC’s cost of goods sold is high, comparing with its revenue in 2011.

LIQUIDITY: AVERAGE

l The current ratio of SC is maintained in a normal level in 2011.

l SC’s quick ratio is maintained in a normal level in 2011.

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 has no short-term loans in 2011.

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

LEVERAGE: AVERAGE

l The debt ratio of SC is low in 2011.

l The risk for SC to go bankrupt is average.

Overall financial condition of the SC: Stable.

CONCLUSIONS

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

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.54.34
UK Pound	1	Rs.87.91
Euro	1	Rs.70.57

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.