MIRA INFORM REPORT

Report Date :

31.12.2013

IDENTIFICATION DETAILS

Name :	NINGBO SINCERE PET PRODUCTS (HOLDING) CO., LTD.
Registered Office :	6/f, Kaifeng Building, No. 762, Zhongxing Road, Jiangdong District, Ningbo, Zhejiang Province, 315041 PR
Country :	China
Financials (as on) :	31.12.2012
Date of Incorporation :	26.12.2003
Com. Reg. No.:	330212000084446
Legal Form :	Limited Liabilities Company
Line of Business :	Subject is engaged in import and export of pet products. Products mainly include: pet products, pet toys and beach products
No. of Employees :	70

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 :	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 – September 30, 2013

Country Name	Previous Rating (30.06.2013)	Current Rating (30.09.2013)
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 2012 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 under 8% for 2012. An economic slowdown in Europe contributed to China's, and is expected to further drag Chinese growth in 2013. 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

NINGBO SINCERE PET PRODUCTS (HOLDING) Co., Ltd.

6/f, kaifeng building, no. 762, zhongxing road, jiangdong district, ningbo, zhejiang PROVINCE, 315041 PR CHINA

TEL: 86 (0) 574-87850216/87850201

FAX: 86 (0) 574-87899721

EXECUTIVE SUMMARY

INCORPORATION DATE : dec. 26, 2003

REGISTRATION NO. : 330212000084446

REGISTERED LEGAL FORM : LIMITED LIABILITIES COMPANY

CHIEF EXECUTIVE : MR. lu wenguang (CHAIRMAN)

STAFF STRENGTH : 70

REGISTERED CAPITAL : CNY 40,000,000

BUSINESS LINE : TRADING

TURNOVER : CNY 181,770,000 (AS OF DEC. 31, 2012)

EQUITIES : CNY 35,670,000 (AS OF DEC. 31, 2012)

PAYMENT : AVERAGE

MARKET CONDITION : average

FINANCIAL CONDITION : stable

OPERATIONAL TREND : STEADY

GENERAL REPUTATION : AVERAGE

EXCHANGE RATE : CNY 6.06 = 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

Note: SC’s correct company name should be the heading one.

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. 26, 2003.

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 industrial investment; manufacturing, processing and selling fishing gear, textiles, hardware and plastics; manufacturing and researching electronics and appliance; enterprise management consulting; leasing its houses; selling flowers, birds, fish and insects, pet feed, fruit and primary agricultural products; import and export of various goods and technologies, but excluding the goods forbidden by the government.

SC is mainly engaged in import and export of pet products.

Mr. Lu Wenguang is legal representative and chairman of SC at present.

SC is known to have approx. 70 employees at present.

SC is currently operating at the above stated address, and this address houses its operating office in the commercial zone of Ningbo. The detailed information of the premise is unspecified.

http://www.sincerepet.com The website is unable to be landed at present for the technical reason.

Changes of its registered information are as follows:

Date of change	Item	Before the change	After the change
2012-3	Company name	Ningbo Sincere Pet Products Co., Ltd.	Present one
	Registered capital	CNY 8,000,000	CNY 30,000,000
2013-1	Registered capital	CNY 30,000,000	Present amount

Tax Registration Certificate No.: 330227756284090

Organization Code: 756284090

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

MAIN SHAREHOLDERS:

Name % of Shareholding

Lu Wenguang 90

Lu Yongan 10

Legal representative and Chairman:

Mr. Lu Wenguang 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 Ningbo Sincere Leisure Products Co., Ltd. as legal representative

SC is mainly engaged in import and export of pet products.

SC’s products mainly include: pet products, pet toys and beach products

SC sources its materials 90% from domestic market, and 10% from overseas market. SC sells 40% of its products in domestic market, and 60% 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’s management declined to release its customer and supplier details.

SC is said to have subsidiaries, but the detail is unspecified.

Related company:

Ningbo Sincere Leisure Products Co., Ltd.

Registered no.: 330200400029364

Legal representative: Lu Wenguang

Date of incorporation: 1998-08-18

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’s management declined to release its bank details.

Balance Sheet

Unit: CNY’000

	as of Dec. 31, 2011	as of Dec. 31, 2012
Cash & bank	9,500	11,640
Inventory	1,120	0
Accounts receivable	3,490	10,040
Advances to suppliers	150	200
Other receivables	0	120
Subsidies receivable	5,340	6,150
Other current assets	0	0
	------------------	------------------
Current assets	19,600	28,150
Fixed assets net value	7,310	7,650
Projects under construction	0	0
Long term investment	1,270	14,680
Other assets	0	0
	------------------	------------------
Total assets	28,180	50,480
	=============	=============
Short loans	0	0
Accounts payable	6,090	14,650
Other payable	140	20
Taxes payable	-90	80
Advances from clients	9,970	0
Dividends payable	3,190	0
Other current liabilities	0	60
	------------------	------------------
Current liabilities	19,300	14,810
Long term liabilities	0	0
	------------------	------------------
Total liabilities	19,300	14,810
Equities	8,880	35,670
	------------------	------------------
Total liabilities & equities	28,180	50,480
	=============	=============

Income Statement

Unit: CNY’000

	as of Dec. 31, 2012
Turnover	181,770
Cost of goods sold	168,590
Sales expense	8,520
Management expense	2,930
Finance expense	290
Investment income	3,300
Profit before tax	5,310
Less: profit tax	520
Profits	4,790

Important Ratios

	as of Dec. 31, 2011	as of Dec. 31, 2012
*Current ratio	1.02	1.90
*Quick ratio	0.96	1.90
*Liabilities to assets	0.68	0.29
*Net profit margin (%)	/	2.64
*Return on total assets (%)	/	9.49
*Inventory /Turnover ×365	/	/
*Accounts receivable/Turnover ×365	/	21 days
*Turnover/Total assets	/	3.60
* Cost of goods sold/Turnover	/	0.93

PROFITABILITY: AVERAGE

· The turnover of SC appears fairly good in its line.

· SC’s net profit margin is average.

· SC’s return on total assets is fairly good.

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

LIQUIDITY: AVERAGE

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

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

· SC has no inventory in 2012.

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

· SC has no short-term loan in both years.

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

LEVERAGE: FAIRLY GOOD

· The debt ratio of SC is low in 2012.

· The risk for SC to go bankrupt is average.

Overall financial condition of the SC: stable.

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

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.62.00
UK Pound	1	Rs.102.17
Euro	1	Rs.85.19

INFORMATION DETAILS

Report Prepared by :

NNA

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.