MIRA INFORM REPORT

Report Date :

18.07.2013

IDENTIFICATION DETAILS

Name :	KLOECKNER PENTAPLAST (SHANGHAI) CO., LTD.
Registered Office :	Room 2505, Platinum Building, No. 233 Taicang Road, Huangpu District, Shanghai, 200021 Pr
Country :	China
Financials (as on) :	31.12.2012
Date of Incorporation :	30.07.2007
Com. Reg. No.:	310000400532786
Legal Form :	Wholly Foreign-Owned Enterprise
Line of Business :	selling of plastic film
No. of Employees :	15

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 :	Slow but Correct
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 2013

Country Name	Previous Rating (31.12.2012)	Current Rating (31.03.2013)
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

Kloeckner Pentaplast (shanghai) co., ltd.

room 2505, Platinum Building, no. 233 TaiCang Road,

HUANGPU District, shanghai, 200021 PR CHINA

TEL: 86 (0) 21-60899009/18896911069 FAX: 86 (0) 21-61350393

EXECUTIVE SUMMARY

INCORPORATION DATE : july 30, 2007

REGISTRATION NO. : 310000400532786

REGISTERED LEGAL FORM : Wholly foreign-owned enterprise

CHIEF EXECUTIVE : MR. JAMES CHRISTOPHER PARHAM FRANK (CHAIRMAN)

STAFF STRENGTH : 15

REGISTERED CAPITAL : usd 828,000

BUSINESS LINE : trading

TURNOVER : CNY 31,980,000 (AS OF DEC. 31, 2012)

EQUITIES : CNY 5,020,000 (AS OF DEC. 31, 2012)

PAYMENT : AVERAGE

MARKET CONDITION : AVERAGE

FINANCIAL CONDITION : fairLY STABLE

OPERATIONAL TREND : FAIRLY STEADY

GENERAL REPUTATION : AVERAGE

EXCHANGE RATE : CNY 6.1373 = 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 name should be the above stated one, instead of the given name –Kloeckner Pentaplast Gmbh and Company KG Shanghai Representative Office. The (Room 1307B, Shenergy International Building No. 1 Fu Xing Zhong Road 200021 Shanghai, China) and telephone numbers (+86 21 51029796 & +86 021 63919497) were SC’s former ones.

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 July 30, 2007.

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 wholesaling, importing, exporting and commission agency (excluding auction) plastic film, packaging materials and raw materials (excluding countries have special provisions), providing related adequate and systematic service and business consulting service (if the trade of the goods is governed by the quota or special rule, relevant regulations shall be followed) (with permit if needed).

SC is mainly engaged in selling plastic film.

Mr. James Christopher Parham Frank 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 the commercial zone of Shanghai. Our checks reveal that SC rents the total premise, but the gross area is unspecified.

SC also has another address located in No. 12, Xiasheng Road, Suzhou Industrial Zone, Suzhou, Jiangsu Province

http://www.kpfilms.com The website belongs to Kloeckner Pentaplast. The design is professional and the content is well organized. At present it is in English, Deutsch and other versions.

E-mail: kpinfo-CN@kpfilms.com

Changes of its registered information are as follows:

Date of change	Item	Before the change	After the change
2009-1	Chairman	Simon Martin Fuchs	Jay Jie Chen
Unknown	Legal rep.	Jay Jie Chen	Present one
	Registered capital	USD 1,840,000	Present amount
	Shareholder	Kloeckner Pentaplast Hong Kong Limited	Present one

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

MAIN SHAREHOLDERS:

Name % of Shareholding

Kloeckner Pentaplast Netherlands B.V 100

Legal Representative and Chairman:

Mr. James Christopher Parham Frank, American. He is currently responsible for the overall management of SC.

Working Experience(s):

At present Working in SC as chairman and legal representative.

SC is mainly engaged in selling plastic film.

SC’s products mainly include: plastic film.

SC sources its materials 100% from domestic market, mainly Shanghai. SC sells 100% of its products to overseas market, mainly Southeast Asian market.

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

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

According to the website: http://www.kpfilms.com

Kloeckner Pentaplast (Suzhou) Specialty Materials Co., Ltd.

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

Add: 12 Xiasheng Road, Suzhou Industrial Park, Suzhou, Jiangsu Province

Tel: +86 (0)512-62609991

Fax: +86 (0)512-62609992

E-mail: kpinfo-CN@kpfilms.com

Argentina

Klöckner Pentaplast de Argentina S.A.

Juncal 1311 7° Piso

C1062ABO- Ciudad de Buenos Aires

Argentina

Tel: +54.11.4814.2400

Fax: +54.11.4814.1200

E-mail: argentina@kpfilms.com

Australia/New Zealand

Klöckner Pentaplast (Australia) Pty Ltd

202/35 Whitehorse Road, PO Box 429

Balwyn, VIC 3103

Australia

Tel: +61.3.9816.1000

Fax: +61.3.9816.1001

E-mail: kpinfo-AU@kpfilms.com

Brazil

Klöckner Pentaplast do Brasil, Ltda.

Rua dos Estudantes, s/n

Rodovia Raposo Tavares Km 28,3

Bairrio Moinho Velho – CEP 06707-050

Cotia – São Paulo – Brazil

Tel: +55.11.4613.9999

Fax: +55.11.4613.9990

E-mail: brazil@kpfilms.com

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.

China Construction Bank Shanghai Fuxing Road Sub-branch

AC#: N/A

Relationship: Normal.

Balance Sheet

Unit: CNY’000

	as of Dec. 31, 2011	as of Dec. 31, 2012
Cash & bank	9,500	5,910
Inventory	4,390	3,050
Accounts receivable	5,360	6,440
Advances to suppliers	1,510	3,140
Other receivables	2,030	4,170
Other current assets	0	0
	------------------	------------------
Current assets	22,790	22,710
Long-term investments	0	0
Fixed assets net value	130	100
Projects under construction	0	0
Intangible assets	30	10
Other assets	0	0
	------------------	------------------
Total assets	22,950	22,820
	=============	=============
Short loans	0	0
Accounts payable	16,990	16,460
Advances from customers	230	370
Employee pay payable	190	310
Taxes payable	-850	90
Other accounts payable	780	570
Other current liabilities	0	0
	-----------------	-----------------
Current liabilities	17,340	17,800
Long term liabilities	0	0
	------------------	------------------
Total liabilities	17,340	17,800
Shareholders equities	5,610	5,020
	------------------	------------------
Total liabilities & equities	22,950	22,820
	=============	=============

Income Statement

Unit: CNY’000

	as of Dec. 31, 2011	as of Dec. 31, 2012
Turnover	30,800	31,980
Cost of goods sold	26,630	27,510
Taxes and additional of main operation	150	100
Income from other operation	1,800	3,090
Sales expense	4,090	3,960
Management expense	1,820	3,850
Finance expense	1,360	240
Profit before tax	1,270	-590
Less: profit tax	20	0
Net profit	1,250	-590

Important Ratios

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

	As of Dec. 31, 2011	As of Dec. 31, 2012
*Current ratio	1.31	1.28
*Quick ratio	1.06	1.10
*Liabilities to assets	0.76	0.78
*Net profit margin (%)	4.06	-1.84
*Return on total assets (%)	5.45	-2.59
*Inventory /Turnover ×365	53 days	35 days
*Accounts receivable/Turnover ×365	64 days	74 days
*Turnover/Total assets	1.34	1.40
* Cost of goods sold/Turnover	0.86	0.86

PROFITABILITY: FAIR

l The turnover of SC appears average in its line in both years.

l SC’s net profit margin is average in 2011, but fair in 2012.

l SC’s return on total assets is fairly good in 2011, but fair in 2012.

l SC’s cost of goods sold is average in both years, comparing with its turnover.

LIQUIDITY: AVERAGE

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

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

l The inventory of SC appears average in both years.

l The accounts receivable of SC appears average in both years.

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

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

LEVERAGE: FAIR

l The debt ratio of SC is fairly high.

l The risk for SC to go bankrupt is average.

Overall financial condition of the SC: Fairly stable.

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

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.59.36
UK Pound	1	Rs.89.69
Euro	1	Rs.77.99

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.