MIRA INFORM REPORT

Report Date :

27.06.2013

IDENTIFICATION DETAILS

Name :	ACETO (SHANGHAI) LTD.
Formerly Known as:	Aceto Pharmaceutical (Shanghai) Ltd.
Registered Office :	Room 908, Jing’an China Tower, No. 1701, Beijing West Road Shanghai 200040 Pr
Country :	China
Financials (as on) :	31.12.2012
Date of Incorporation :	18.02.2003
Com. Reg. No.:	310115400117446
Legal Form :	Wholly Foreign-Owned Enterprise
Line of Business :	Exporter of chemical products include fine chemicals, pharmaceutical raw materials
No. of Employees :	25

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 :	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 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

ACETO (SHANGHAI) lTD.

room 908, JING’AN CHINA TOWER, no. 1701, beijing west road

shanghai 200040 PR CHINA

TEL: 86 (0) 21-62880099 FAX: 86 (0) 21-62884868

EXECUTIVE SUMMARY

INCORPORATION DATE : FEB. 18, 2003

REGISTRATION NO. : 310115400117446

REGISTERED LEGAL FORM : WHOLLY FOREIGN-OWNED ENTERPRISE

CHIEF EXECUTIVE : MR. GARY J. MO (CHAIRMAN)

STAFF STRENGTH : 25

REGISTERED CAPITAL : USD 400,000

BUSINESS LINE : TRADING

TURNOVER : CNY 651,350,000 (AS OF DEC. 31, 2012)

EQUITIES : CNY 135,430,000 (AS OF DEC. 31, 2012)

PAYMENT : AVERAGE

MARKET CONDITION : COMPETITIVE

FINANCIAL CONDITION : FAIRLY STABLE

OPERATIONAL TREND : STEADY

GENERAL REPUTATION : AVERAGE

EXCHANGE RATE : CNY 6.15 = 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 Feb. 18, 2003.

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 international trade; transit trade; trade with the enterprises within the free trade zone and trade agency; operating business with enterprises within free trade zone by the enterprises which have right of import & export; importing & exporting commodities and technology; simple commercial processing; commercial consulting services.

SC is mainly engaged in exporting chemical products.

Mr. Gary J. Mo is the legal representative and chairman of SC at present.

SC is known to have approx. 25 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 about 100 square meters.

http://www.aceto.com The website belongs to Aceto Corporation, and it includes the introduction about SC and its related companies. The design is professional and the content is well organized. At present it is in English version.

Email: acetosh@sh.aceto.com

Changes of its registered information:

Date of change	Item	Before the change	After the change
Unknown	Company name	Aceto Pharmaceutical (Shanghai) Ltd.	Present one

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

MAIN SHAREHOLDERS:

Name % of Shareholding

Aceto Corporation (U.S.A.) 100

Aceto Corporation, founded in 1947, is a global leader in the marketing and distribution of pharmaceutical intermediates and active ingredients, finished dosage form generics, nutraceutical products, agricultural protection products and specialty chemicals.

Phone: 516-627-6000

Website: http://www.aceto.com

E-mail: aceto@aceto.com

Legal Representative and Chairman:

Mr. Gary J. Mo, Canadian, he 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 Aceto (Shanghai) Ltd. Branch as principal

SC is mainly engaged in exporting chemical products.

SC’s products mainly include: fine chemicals, pharmaceutical raw materials.

SC sources its merchandise 100% from domestic market. SC sells 100% of its products to overseas market, mainly European and American countries.

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

*Major Customer:

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

Aceto Corporation (U.S.A.)

Note: SC refused to release its major suppliers.

According to the above website:

Aceto Fine Chem GmbH (Hamburg)

Aceto France S.A.S.

Aceto Health Ingredients GmbH (Hamburg)

Aceto Netherlands

Aceto Pharma GmbH (Hamburg)

Aceto Pharma (India) Private Limited

Branch:

Aceto (Shanghai) Ltd. Branch

……………………………………………….

Principal: Gary J. Mo

Registration No.: 310115500056932

Incorporation date: 2006-9-20

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 Merchants Bank

AC#：N/A

Relationship: Normal.

Balance Sheet

Unit: CNY’000

	As of Dec. 31, 2011	As of Dec. 31, 2012
Cash & bank	9,740	12,170
Inventory	0	0
Bills receivable	0	0
Accounts receivable	219,690	191,980
Other accounts receivable	0	0
Advances to suppliers	10	10
Other current assets	10	8,480
	------------------	------------------
Current assets	229,450	212,640
Fixed assets net value	260	430
Long-term investment	0	0
Projects under construction	0	0
Intangible and other assets	100	70
	------------------	------------------
Total assets	229,810	213,140
	=============	=============
Short loans	0	0
Accounts payable	98,350	75,330
Advance from customers	1,150	1,310
Other accounts payable	610	560
Accrued payroll	0	0
Taxes payable	690	310
Other current liabilities	250	200
	------------------	------------------
Current liabilities	101,050	77,710
Long term liabilities	0	0
Other liabilities	0	0
	------------------	------------------
Total liabilities	101,050	77,710
Equities	128,760	135,430
	------------------	------------------
Total liabilities & equities	229,810	213,140
	=============	=============

Income Statement

Unit: CNY’000

	As of Dec. 31, 2012
Turnover	651,350
Cost of goods sold	629,980
Sales expense	70
Management expense	12,010
Finance expense	360
Profit before tax	9,050
Less: profit tax	2,380
Profits	6,670

Important Ratios

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

	As of Dec. 31, 2011	As of Dec. 31, 2012
*Current ratio	2.27	2.74
*Quick ratio	2.27	2.74
*Liabilities to assets	0.44	0.36
*Net profit margin (%)	/	1.02
*Return on total assets (%)	/	3.13
*Inventory /Turnover ×365	/	/
*Accounts receivable/Turnover ×365	/	108 days
*Turnover/Total assets	/	3.06
* Cost of goods sold/Turnover	/	0.97

PROFITABILITY: AVERAGE

l The turnover of SC appears fairly good in its line in 2012.

l SC’s net profit margin is average in 2012.

l SC’s return on total assets is average in 2012.

l SC’s cost of goods sold is high, comparing with its turnover in 2012.

LIQUIDITY: AVERAGE

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

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

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

l There is no inventory and short-term loan of SC in both years.

l SC’s turnover is in a fairly good level, comparing with the size of its total assets in 2012.

LEVERAGE: FAIRLY GOOD

l The debt ratio of SC is low.

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. The large amount of accounts receivable could be a threat to SC’s financial condition.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.59.85
UK Pound	1	Rs.92.31
Euro	1	Rs.78.23

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.