MIRA INFORM REPORT

Report Date :

04.04.2014

IDENTIFICATION DETAILS

Name :	HENGLI PETROCHEMICAL (DALIAN) CO., LTD.
Registered Office :	No. 299 Changsong Road, Harbor Industrial Zone, Changxing Island, Dalian City, Liaoning Province, 116318 PR
Country :	China
Date of Incorporation :	17.03.2010
Com. Reg. No.:	210244000000468
Legal Form :	Limited Liabilities Co.
Line of Business :	Subject is engaged in manufacturing and trading of chemicals. Products mainly include: PTA, benzoic acid, and isophthalic acid
No. of Employees :	2,300

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 – 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 2013 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 consumption; (b) facilitating higher-wage job opportunities for the aspiring middle class, including rural migrants and increasing numbers of college graduates; (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. Debt overhang from its credit-fueled stimulus program in 2008-10, particularly among local governments, and soaring property prices challenge policy makers currently. Their efforts to cool a red-hot property market in 2011 appear to have curbed inflation, but contributed to slower GDP growth in 2012 and 2013. Slow recovery in Europe and other key export markets have also retarded growth. 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 fixed investments and exports in the future. However, China has made only marginal progress toward these rebalancing goals. The new government of President XI Jinping has signaled a greater willingness to undertake reforms that focus on China's long-term economic health, including giving the market a more decisive role in allocating resources.

Source : CIA

Company name and address

Hengli Petrochemical (Dalian) Co., Ltd.

No. 299 changsong road, Harbor Industrial Zone, Changxing Island, dalian city, liaoning PROVINCE, 116318 PR CHINA

TEL: 86 (0) 411-66522008/85281833

FAX: n/a

EXECUTIVE SUMMARY

INCORPORATION DATE : march 17, 2010

REGISTRATION NO. : 210244000000468

REGISTERED LEGAL FORM : Limited liabilities co.

CHIEF EXECUTIVE : Mr. Chen qi (legal representative)

STAFF STRENGTH : 2,300

REGISTERED CAPITAL : CNY 3,890,000,000

BUSINESS LINE : manufacturing and TRADING

TURNOVER : N/A

EQUITIES : N/A

PAYMENT : AVERAGE

MARKET CONDITION : AVERAGE

FINANCIAL CONDITION : N/A

OPERATIONAL TREND : FAIRLY steady

GENERAL REPUTATION : AVERAGE

EXCHANGE RATE : CNY 6.2072 = 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 limited liabilities company at local Administration for Industry & Commerce (AIC - The official body of issuing and renewing business license) on March 17, 2010.

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 manufacture, sales, research and development of PTA, benzoic acid, isophthalic acid and 1,2,4-benzenetricarboxylic acid; sales of steam, nitrogen, p-xylene, ethylene glycol; sales of ash and gypsum (excluding those with special approval); service for ships; cargo handling services (only the probation period); thermal power generation (with permit); general goods storage; general cargo; import and export of goods and technology (excluding those prohibited by the law’ if needed with permit).

SC is mainly engaged in manufacturing and trading of chemicals.

Mr. Chen Qi is legal representative of SC at present.

SC is known to have approx. 2,300 employees at present.

SC is currently operating at the above stated address, and this address houses its operating office and factory in the industrial zone of Dalian. Detailed premise information is not available at present.

http://www.henglipc.com/index.asp The design is professional and the content is well organized. At present it is in English and Chinese versions.

Email: hengli-pta@hengli.com

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

No significant changes were found during our checks with the local Administration for Industry and Commerce.

Subject passed the annual inspection of 2012 with Administration for Industry & Commerce.

Organization Code: 550622058

MAIN SHAREHOLDERS:

Name Amount (CNY) % of Shareholding

Hengli Investment (Dalian) Co., Ltd. (In Chinese Pinyin) 3,880,000,000 99.74

Dalian Henghan Investment Co., Ltd. (In Chinese Pinyin) 10,000,000 0.26

Hengli Investment (Dalian) Co., Ltd.

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

Incorporation Date: 2010-03-12

Registration No.: 210244000000214

Registered Legal Form: Limited Liabilities Co.

Legal Representative: Chen Jianhua

Dalian Henghan Investment Co., Ltd.

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

Incorporation Date: 2010-02-01

Registration No.: 210244000005099

Registered Legal Form: Limited Liabilities Co.

Legal Representative: Chen Jianguo

Legal Representative:

Mr. Chen Qi is currently responsible for the overall management of SC.

Working Experience(s):

At present Working in SC as legal representative.

Supervisor:

Chen Jianguo

SC is mainly engaged in manufacturing and trading of chemicals.

SC’s products mainly include: PTA, benzoic acid, and isophthalic acid

SC sources its materials 50% from domestic market, and 50% from overseas market. SC sells 60% of its products in domestic market, and 40% 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 T/T, L/C and Credit of 30-60 days.

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

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

Jiangsu Hengli Chemical Fiber Co., Ltd.

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

Incorporation Date: 2002-11-08

Registration No.: 320000400002494

Legal Representative: Chen Jianhua

Website: http://www.hengli.com/hlcf/intro.asp

Tel: 86-512-63837111

Wujiang Chemical Fiber Weaving Factory Co., Ltd.

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

Incorporation Date: 2008-03-31

Registration No.: 320584000181836

Legal Representative: Chen Jianhua

Website: http://www.hengli.com/wjcf/branch-nanyang.html

Tel: 86-512-63838688

Jiangsu Deshun Textiles Co., Ltd.

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

Incorporation Date: 2007-04-30

Registration No.: 321300400001834

Legal Representative: Shen Xiaochun

Website: http://www.hengli.com/deshun/

Tel: 86-512-63057350

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 bank details are not available at present.

SC’s accountant refused to release the financial information.

SC is considered large-sized in its line with a development history of 4 years.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.60.12
UK Pound	1	Rs.100.07
Euro	1	Rs.82.74

INFORMATION DETAILS

Analysis Done by :	SUM
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.