MIRA INFORM REPORT

Report Date :

13.12.2014

IDENTIFICATION DETAILS

Name :	Lianyungang Debang Fine Chemical Co., Ltd.
Registered Office :	No. 180 Xinhai Road, Haizhou District, Lianyungang Jiangsu Province 222023 Pr
Country :	China
Financials (as on) :	31.12.2013
Date of Incorporation :	09.03.1998
Com. Reg. No.:	320700000003759
Legal Form :	One-Person Limited Liability Company
Line of Business :	Manufacturing and Selling of Fine Chemicals.
No. of Employees :	286

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 – September 30, 2014

Country Name	Previous Rating (30.06.2014)	Current Rating (30.09.2014)
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, growth of the private sector, development of stock markets and a modern banking system, 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 considered important to "economic security," explicitly looking to foster globally competitive industries. After keeping its currency tightly linked to the US dollar for years, in July 2005 China 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 and expanded the daily trading band within which the RMB is permitted to fluctuate. 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. Several factors are converging to slow China's growth, including debt overhang from its credit-fueled stimulus program, industrial overcapacity, inefficient allocation of capital by state-owned banks, and the slow recovery of China's trading partners. The government's 12th Five-Year Plan, adopted in March 2011 and reiterated at the Communist Party's "Third Plenum" meeting in November 2013, emphasizes continued economic reforms and the need to increase domestic consumption in order to make the economy less dependent in the future on fixed investments, exports, and heavy industry. 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

Lianyungang Debang Fine Chemical Co., Ltd.

NO. 180 XINHAI ROAD, HAIZHOU DISTRICT, LIANYUNGANG

JIANGSU PROVINCE 222023 PR CHINA

TEL: 86 (0) 518-85253811/85255020

FAX: 86 (0) 518-85250728

EXECUTIVE SUMMARY

Date of Registration : march 9, 1998

REGISTRATION NO. : 320700000003759

LEGAL FORM : One-person Limited Liability Company

CHIEF EXECUTIVE : zhao xianghai (LEGAL REPRESENTATIVE)

REGISTERED CAPITAL : CNY 10,000,000

staff : 286

BUSINESS CATEGORY : MANUFACTURING & TRADING

Revenue : CNY 227,120,000 (AS OF DEC. 31, 2013)

EQUITIES : CNY 43,330,000 (AS OF DEC. 31, 2013)

WEBSITE : www.dbfine.com.cn

E-MAIL : dbfine@dbfine.com.cn

PAYMENT : AVERAGE

MARKET CONDITION : COMPETITIVE

FINANCIAL CONDITION : fairly stable

OPERATIONAL TREND : fairly STEADY

GENERAL REPUTATION : AVERAGE

EXCHANGE RATE : CNY 6.15 = USD 1

Adopted abbreviations (as follows)

SC - Subject Company (the company inquired by you)

N/A – Not available

CNY – China Yuan Ren Min Bi

OPERATIONAL TREND & GENERAL REPUTATION

This section aims at indicating the relative positions of SC in respect of its operational trend & general reputation

Operational Trend:- General Reputation:-

Upward Excellent

Steady Good

Fairly Steady Fairly Good

Ordinary Average

Fair Fair

Stagnant Detrimental

Downward Not known

Not known Not yet be determined

Not yet be determined

LEGAL STATUS & HISTORY

SC was established as one-person limited liabilities company of PRC with State Administration of Industry & Commerce (SAIC) under registration No.: 320700000003759.

SC’s Organization Code Certificate No.: 13896963-1

SC’s Tax No.: 320706138969631

SC’s registered capital: CNY 10,000,000

SC’s paid-in capital: CNY 10,000,000

Registration Change Record:-

No significant changes of SC have been noted in SAIC since its incorporation.

Current Co search indicates SC’s shareholders & chief executives are as follows:-

Name of Shareholder (s)	% of Shareholding
Jiangsu Debang Chemical Industry Group Co., Ltd.	100

SC’s Chief Executives:-

Position	Name
Legal Representative and Chairman	Zhao Xianghai
General Manager	Wei Dong
Supervisor	Shan Baoxia

RECENT DEVELOPMENT

No recent development was found during our checks at present.

SHAREHOLDER CHART & BACKGROUND

Name % of Shareholding

Jiangsu Debang Chemical Industry Group Co., Ltd. 100

-----------------------------------------

Date of Registration: September 26, 1989

Registration No.: 320700400003886

Chief Executive: Zhao Xianghai

Registered Capital: CNY 113,054,032

Web: www.jsdebang.com

MANAGEMENT

Zhao Xianghai, Legal Representative, Chairman and General Manager

-------------------------------------------------------------------------------------------------------

Ø Gender: M

Ø Age: 60

Ø Qualification: University

Ø Working experience (s):

At present, working in SC as legal representative, chairman and general manager, also working in Jiangsu Debang Chemical Industry Group Co., Ltd., Jiangsu Debang Xinghua Chemical Industry Co., Ltd. and Lianji Chemical Industry Co., Ltd. as legal representative

Wei Dong, General Manager

----------------------------------------------

Ø Gender: M

Ø Qualification: University

Ø Working experience (s):

At present, working in SC as general manager

Supervisor

--------------

Shan Baoxia

BUSINESS OPERATION

SC’s registered business scope includes manufacturing food additives, industrial orthophosphate, calcium hydrogen phosphate; manufacturing phosphate, propionic acid ester, citric acid, citrate series and related products; operating and acting as an agent of importing and exporting various kinds of commodities and technology, excluding the goods forbidden by the government.

SC is mainly engaged in manufacturing and selling fine chemicals.

Brand: DUOLING

SC’s products mainly include:

Dicalcium Phosphate

Tricalcium Phosphate

Calcium Carbonate

Potassium Chloride

Etc.

SC sources its materials 100% from domestic market, mainly Jiangsu. SC sells 70% of its products in domestic market, and 30% to overseas market, mainly U.S.A., Europe, Mid East, Southeast Asia, etc.

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

*Major Customers*

-----------------------

Glanbia Nutritionals Na, Inc.

Jgb SA

Kraft Chemical Co.

Staff & Office:

--------------------------

SC is known to have approx. 286 staff at present.

SC owns an area as its operating office and factory, but the detailed information is unknown.

RELATED COMPANY

Jiangsu Debang Xinghua Chemical Industry Co., Ltd.

------------------------------------------

Date of Registration: April 26, 2002

Registration No.: 320000000017341

Chief Executive: Zhao Xianghai

Registered Capital: CNY 87,640,000

Lianji Chemical Industry Co., Ltd.

------------------------------

Date of Registration: January 14, 1994

Registration No.: 320700400000402

Chief Executive: Zhao Xianghai

Registered Capital: CNY 76,700,000

Etc.

PAYMENT

Overall payment appraisal:

( ) Excellent ( ) Good (X) Average ( ) Fair ( ) Poor ( ) Not yet be 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.

BANKING

The bank information of SC is not filed in SAIC.

FINANCIALS

Balance Sheet

Unit: CNY’000	As of Dec. 31, 2013
Cash	28,340
Notes receivable	0
Accounts receivable	32,370
Advances to suppliers	3,130
Other receivable	410
Inventory	38,820
Non-current assets within one year	0
Other current assets	9,010
	------------------
Current assets	112,080
Fixed assets	39,070
Long-term prepaid expenses	0
Deferred income tax assets	0
Other non-current assets	21,660
	------------------
Total assets	172,810
	=============
Short-term loans	45,000
Notes payable	0
Accounts payable	32,500
Advances from clients	0
Other payable	6,620
Other current liabilities	44,220
	------------------
Current liabilities	128,340
Non-current liabilities	1,140
	------------------
Total liabilities	129,480
Equities	43,330
	------------------
Total liabilities & equities	172,810
	=============

Income Statement

Unit: CNY’000	As of Dec. 31, 2013
Revenue	227,120
Cost of sales	185,220
Sales expense	13,990
Management expense	15,410
Finance expense	4,740
Profit before tax	6,780
Less: profit tax	1,020
Profits	5,760

Important Ratios

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

	As of Dec. 31, 2013
*Current ratio	0.87
*Quick ratio	0.57
*Liabilities to assets	0.75
*Net profit margin (%)	2.54
*Return on total assets (%)	3.33
*Inventory / Revenue ×365	63 days
*Accounts receivable/ Revenue ×365	53 days
*Revenue/Total assets	1.31
*Cost of sales / Revenue	0.82

FINANCIAL COMMENTS

PROFITABILITY: AVERAGE

l The revenue of SC appears fairly good in its line.

l SC’s net profit margin is average.

l SC’s return on total assets is average.

l SC’s cost of sales is average, comparing with its revenue.

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 is maintained in an average level.

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

l SC’s short-term loans are in an average level.

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

LEVERAGE: AVERAGE

l The debt ratio of SC is average.

l The risk for SC to go bankrupt is average.

Overall financial condition of the SC: Fairly Stable.

CONCLUSIONS

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

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.62.44
UK Pound	1	Rs.98.15
Euro	1	Rs.77.38

INFORMATION DETAILS

Analysis Done by :	SUB
Report Prepared by :	NIT

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.