MIRA INFORM REPORT

Report Date :

13.04.2013

IDENTIFICATION DETAILS

Name :	AKZO NOBEL CAR REFINISHES (SUZHOU) CO., LTD.
Registered Office :	No. 125, Xiangyang Road, Suzhou New Area, Suzhou, Jiangsu Province, 215011 Pr
Country :	China
Financials (as on) :	31.12.2011
Date of Incorporation :	07.09.1999
Com. Reg. No.:	320500400006195
Legal Form :	Wholly Foreign-Owned Enterprise
Line of Business :	Manufacturing and selling automobile refinishes paint.
No. of Employees :	378

RATING & COMMENTS

MIRA’s Rating :

B

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

Status :	Moderate
Payment Behaviour :	Unknown
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 (31.03.2011)	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 and address

Akzo Nobel Car Refinishes (Suzhou) Co., Ltd.

No. 125, xiangyang road, suzhou new area,

suzhou, jiangsu PROVINCE, 215011 PR CHINA

TEL: 86 (0) 512-68073236/68257828 FAX: 86 (0) 512-68258708

EXECUTIVE SUMMARY

INCORPORATION DATE : SEPTEMBER 7, 1999

REGISTRATION NO. : 320500400006195

REGISTERED LEGAL FORM : WHOLLY FOREIGN-OWNED enterprise

CHIEF EXECUTIVE : MR. xu zhaoming (CHAIRMAN)

STAFF STRENGTH : 378

REGISTERED CAPITAL : usd 12,000,000

BUSINESS LINE : MANUFACTURe & trade

TURNOVER : CNY 615,760,000 (AS OF DEC. 31, 2011)

EQUITIES : CNY 141,140,000 (AS OF DEC. 31, 2011)

PAYMENT : AVERAGE

MARKET CONDITION : competitive

FINANCIAL CONDITION : FAIR

OPERATIONAL TREND : FAIRLY STEADY

GENERAL REPUTATION : well-known

EXCHANGE RATE : CNY 6.19 = 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

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 Sep. 7, 1999.

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 researching, developing, manufacturing and selling inorganic powder fillings, commercialization pigment processing technology, industrial coatings, paint-coat and related products; providing after-sale services, including technology consultation; wholesaling, importing and exporting the above commodities of the same classification and commission agent.

SC is mainly engaged in manufacturing and selling automobile refinishes paint.

Mr. Xu Zhaoming has been legal representative and chairman of SC since 2001.

SC is known to have approx. 378 employees at present.

SC is currently operating at the above stated address, and this address houses its operating office and factory in new area of Suzhou. Our checks reveal that SC owns the total premise, but the gross area of the premise is unspecific.

http://www.sikkens.com.cn/ It includes the information on SC and its related companies. The design is professional and the content is well organized. At present the web site is in Chinese, English and other versions.

Email: sunny.leng@akzonobel.com

Changes of its registered information:

Date of change	Item	Before the change	After the change
2000-5-8	Registered capital	USD 1,050,000	The present amount
2001-9-17	Legal representative	Yu Guo	The present one
Unspecified	Registration No.	008482	The present one

For the past two years there is no record of litigation.

MAIN SHAREHOLDER:

Name % of Shareholding

Akzo Nobel China Coatings Co., Ltd. (Holland) (Literal Translation) 100

l Chairman & Legal representative:

Mr. Xu Zhaoming (in Chinese Pinyin) , Passport # 131234656, born in 1954 with university education. He is currently responsible for the overall management of SC.

Working Experience(s):

From 2001 to present Working in SC as chairman and legal representative.

Also working in Akzo Nobel Car Refinishes (Suzhou) Co., Ltd. Changzhou Branch as principal.

*Officials:

========

Name Title

Ng Yaing Joo Director

Keith Power Director

Roelen Rogier Marinus Gerardus Supervisor

Note: The given contact person Sunny Leng is SC’s employee.

SC is mainly engaged in manufacturing and selling automobile refinishes paint.

SC’s products mainly include automobile refinishes paint.

SC sources its materials 80% from domestic market, and 20% from overseas market. SC sells 70% of its products in domestic market, and 30% to overseas 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, L/C and Credit of 30-60 days.

Note: SC declined to release its major suppliers and clients.

Akzo Nobel International Paint (Suzhou) Co., Ltd.

Tianjin Akzo Nobel Peroxides Co., Ltd.

Registered no.: 120000400000733

Legal representative: Jan Allan Lennart Svard

Establishment date: 1995-2-17

Akzo Nobel Ethylene Amines (Ningbo) Co., Ltd.

Registered no.: 330200400034755

Legal representative: Mr. Steven Lance Hunt

Establishment date: 2008-12-3

Etc.

SC is known to have the following branches:

Akzo Nobel Car Refinishes (Suzhou) Co., Ltd. Changzhou Branch

Principal: Xu Zhaoming

Akzo Nobel Car Refinishes (Suzhou) Co., Ltd. Shanghai Branch

Registered no.: 310000500185472

Principal: Wu Weiguang

Establishment date: 2006-12-13

Akzo Nobel Car Refinishes (Suzhou) Co., Ltd. Shanghai Anting Branch

Registered no.: 012758

Principal: Wu Weiguang

Establishment date: 2007-5-24

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.

Shanghai Pudong Development Bank Suzhou Branch

AC#：37301441351000862

Relationship: Normal

Balance Sheet

Unit: CNY’000

	As of Dec. 31, 2011
Cash & bank	67,320
Inventory	46,820
Accounts receivable	123,950
Other receivables	4,130
Other current assets	20,170
	------------------
Current assets	262,390
Fixed assets net value	24,150
Projects under construction	2,250
Intangible and other assets	229,700
	------------------
Total assets	518,490
	===========
Short loan	139,000
Accounts payable	132,020
Advances from clients	3,540
Taxes payable	5,890
Other Accounts payable	80
Withdraw the expenses in advance	42,800
Other current liabilities	20
	------------------
Current liabilities	323,350
Long term liabilities	54,000
	------------------
Total liabilities	377,350
Equities	141,140
	------------------
Total liabilities & equities	518,490
	===========

Income Statement

Unit: CNY’000

	As of Dec. 31, 2011
Turnover	615,760
Cost of goods sold	390,810
Sales expense	118,560
Management expense	104,520
Finance expense	7,850
Profit before tax	-9,450
Less: profit tax	130
Profits	-9,580

Important Ratios

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

	As of Dec. 31, 2011
*Current ratio	0.81
*Quick ratio	0.67
*Liabilities to assets	0.73
*Net profit margin (%)	-1.56
*Return on total assets (%)	-1.85
*Inventory /Turnover ×365	28 days
*Accounts receivable/Turnover ×365	74 days
*Turnover/Total assets	1.19
* Cost of goods sold/Turnover	0.63

PROFITABILITY: FAIR

l The turnover of SC appears fairly good.

l SC’s net profit margin is fair.

l SC’s return on total assets is fair.

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 appears average.

l The accounts receivable of SC appears fairly large.

l The short-term loan of SC appears fairly large.

l SC’s turnover is in an average 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: Fair.

SC is considered medium-sized in its line with fair financial conditions. The large amount of accounts receivable and short-term loan could be a threat to SC’s financial condition.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.54.44
UK Pound	1	Rs.83.77
Euro	1	Rs.71.33

INFORMATION DETAILS

Report Prepared by :

PRL

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.