MIRA INFORM REPORT

Report Date :

13.12.2014

IDENTIFICATION DETAILS

Name :	WUHAN JADECHEM CHEMICALS CO., LTD.

Registered Office :	No. 8, Jiangda Road, Jianghan Economic Development Zone, Wuhan, Hubei Province 430023 PR

Country :	China

Financials (as on) :	31.12.2013

Date of Incorporation :	25.08.2005

Com. Reg. No.:	420100400006575

Legal Form :	Shares Limited Co.

Line of Business :	Subject includes researching, developing and selling fine chemical materials and electroplating intermediates; providing related service

No. of Employees :	52

RATING & COMMENTS

MIRA’s Rating :

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

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

WUHAN JADECHEM CHEMICALS CO., LTD.

NO. 8, jiangda road, jianghan economic development zone, wuhan, hubei PROVINCE 430023 PR CHINA

TEL: 86 (0) 27-83552071

FAX: 86 (0) 27-83551196

EXECUTIVE SUMMARY

INCORPORATION DATE : AUG. 25, 2005

REGISTRATION NO. : 420100400006575

REGISTERED LEGAL FORM : Shares limited co.

CHIEF EXECUTIVE : MR. SONG WENCHAO (CHAIRMAN)

STAFF STRENGTH : 52

REGISTERED CAPITAL : CNY 43,000,000

BUSINESS LINE : MANUFACTURING & TRADING

TURNOVER : CNY 28,680,000 (AS OF DEC. 31, 2013)

EQUITIES : CNY 14,870,000 (AS OF DEC. 31, 2013)

PAYMENT : AVERAGE

MARKET CONDITION : AVERAGE

FINANCIAL CONDITION : FAIRLY STABLE

OPERATIONAL TREND : FAIRLY STEADY

GENERAL REPUTATION : AVERAGE

EXCHANGE RATE : CNY 6.1925 = 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: The is SC’s registered address and the operation address should be the heading one.

SC was registered as a Shares limited co. at local Administration for Industry & Commerce (AIC - The official body of issuing and renewing business license).

Company Status: Shares limited co.

This form of business in PR China is defined as a legal person. Its registered capital is divided into shares of equal par value and the co. raises capital by issuing share certificates by promotion or by public offer. Shareholders bear limited liability to the extent of shareholding, and the co. is liable for its debts only to the extent of its total assets. The co has independent property of legal person and enjoys property rights of legal person. The characteristics of the shares limited co. are as follows:

The establishment of the co. requires at least two promoters and no more than 200, half of whom shall be domiciled in China.. Natural person are allowed to serve as promoters.

The minimum registered capital of a co. is CNY 5M. while that of the co. with foreign investment is CNY 5M. The total capital of a co. which propose to apply for publicly listed must be no less than CNY 30M.

The board of directors must consist of five to nineteen directors.

If the co. raises capital by public offer, the promoters must not subscribe less than 35% of the total shares. the promoters’ shares are restricted to transfer- within one year of the offer.

A state-owned enterprise that is restructured into a shares limited co. must comply with the conditions & requirements specified under the law & administrative rule.

SC’s registered business scope includes researching, developing and selling fine chemical materials and electroplating intermediates; providing related service. (with permit if needed).

SC is mainly engaged in manufacturing and selling chemical products.

Mr. Song Wenchao is legal representative and chairman of SC at present.

SC is known to have approx. 52 employees at present.

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

http://www.jadechem.com/ It includes the information on SC and its related companies. The design is professional and the content is well organized. At present the web site is in Chinese and English versions.

E-mail: webmaster@jadechem.com

Changes of its registered information are as follows:

Date of change	Item	Before the change	After the change
2014-6-3	Legal form	Limited liabilities co.	One-person limited liability co.
2014-8-1	Legal form	One-person limited liability co.	Limited liabilities co.
2014-9-11	Legal form	Limited liabilities co.	Present one
2014-9-11	Chinese Company name	武汉吉和昌化工科技有限公司	Present one

Organization code: 778161016

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

MAIN SHAREHOLDERS:

Name % of Shareholding

Shenzhen Jixiangdao Investment Co., Ltd. (in Chinese Pinyin) 20

Wuhan Jadechem Investment Consulting Co., Ltd. 80

Shenzhen Jixiangdao Investment Co., Ltd.

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

Registered no.: 440301109607578

Legal representative: Zhang Pingji

Wuhan Jadechem Investment Consulting Co., Ltd.

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

Registered no.: 420103000253892

Legal representative: Song Wenchao

Registered capital: CNY 1,000,000

Legal representative and chairman:

Mr. Song Wenchao 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 Wuhan Jadechem Investment Consulting Co., Ltd., Wuhan Jadechem Fine Chemical Co., Ltd. as legal representative.

Supervisors:

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

Zhang Jinfeng

Xiong Zhilan

Directors:

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

Chen Yajuan

Zhou Ziqiang

Hu Zhe

SC is mainly engaged in manufacturing and selling chemical products.

SC’s products mainly include electroplating intermediates, fine chemicals, etc.

SC sources its materials 100% from domestic market. SC sells 100% of its products in domestic market.

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

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

Trademark & Patents

No record

Wuhan Jadechem International Trade Co., Ltd.

Wuhan Jadechem Fine Chemical Co., Ltd.

Shenzhen Jadechem Chemical Co., Ltd.

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.

SC’s accountant refused to release the bank details.

Balance Sheet

Unit: CNY’000

	As of Dec. 31, 2013
Cash & bank	9,960
Inventory	1,190
Accounts receivable	10,260
Other receivables	5,000
Other current assets	360
	------------------
Current assets	26,770
Fixed assets net value	330
Long term investment	1,000
Projects under construction	60
Intangible and other assets	0
	------------------
Total assets	28,160
	===========
Short loan	5,000
Accounts payable	7,950
Advances from clients	0
Taxes payable	310
Other Accounts payable	30
Other current liabilities	0
	------------------
Current liabilities	13,290
Long term liabilities	0
	------------------
Total liabilities	13,290
Equities	14,870
	------------------
Total liabilities & equities	28,160
	===========

Income Statement

Unit: CNY’000

	As of Dec. 31, 2013
Turnover	28,680
Cost of goods sold	23,040
Sales expense	2,260
Management expense	2,430
Finance expense	0
Profit before tax	790
Less: profit tax	250
Profits	540

Important Ratios

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

	As of Dec. 31, 2013
*Current ratio	2.01
*Quick ratio	1.92
*Liabilities to assets	0.47
*Net profit margin (%)	1.88
*Return on total assets (%)	1.92
*Inventory /Turnover ×365	16 days
*Accounts receivable/Turnover ×365	131 days
*Turnover/Total assets	1.02
* Cost of goods sold/Turnover	0.80

PROFITABILITY: AVERAGE

The turnover of SC appears average.

SC’s net profit margin is average.

SC’s return on total assets is average.

SC’s cost of goods sold is average, comparing with its turnover.

LIQUIDITY: AVERAGE

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

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

The inventory of SC appears average.

The accounts receivable of SC appears fairly large.

The short-term loan of SC appears average.

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

LEVERAGE: AVERAGE

The debt ratio of SC is low.

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.62.44
UK Pound	1	Rs.98.15
Euro	1	Rs.77.38

INFORMATION DETAILS

Analysis Done by :	SUB

Report Prepared by :	NIS

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.