MIRA INFORM REPORT

Report Date :

31.10.2014

IDENTIFICATION DETAILS

Name :	kerry oils & grains (tianjin) lTD.
Registered Office :	No. 95 Jinbin Road, Tianjin Port Free Trade Zone, Tianjin 300461 PR
Country :	China
Financials (as on) :	31.12.2013
Date of Incorporation :	06.09.2002
Com. Reg. No.:	120000400024938
Legal Form :	Wholly Foreign-Owned Enterprise
Line of Business :	Engaged in manufacturing, processing and selling various types of vegetable oils and all kinds of animal & vegetable fats products.
No. of Employees :	558

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 – June 1, 2014

Country Name	Previous Rating (31.03.2014)	Current Rating (01.06.2014)
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

kerry oils & grains (tianjin) lTD.

No. 95 jinbin Road, tianjin port Free Trade Zone, TIanjin 300461 PR CHINA

TEL: 86 (0) 22-66271646/66271288/59845170 FAX: 86 (0) 22-66271652

EXECUTIVE SUMMARY

INCORPORATION DATE : SEP. 6, 2002

REGISTRATION NO. : 120000400024938

REGISTERED LEGAL FORM : WHOLLY FOREIGN-OWNED ENTERPRISE

CHIEF EXECUTIVE : MR. MU YANKUI (CHAIRMAN)

STAFF STRENGTH : 558

REGISTERED CAPITAL : USD 31,600,000

BUSINESS LINE : MANUFACTURING, PROCESSING, TRADING

TURNOVER : CNY 6,790,490,000 (AS OF DEC. 31, 2013)

EQUITIES : CNY 1,433,120,000 (AS OF DEC. 31, 2013)

PAYMENT : AVERAGE

MARKET CONDITION : COMPETITIVE

FINANCIAL CONDITION : FAIRLY STABLE

OPERATIONAL TREND : STEADY

GENERAL REPUTATION : WELL KNOWN

EXCHANGE RATE : CNY 6.1147 = 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 Sep. 6, 2002.

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 manufacturing, processing, refining and packaging of various types of vegetable oils and all kinds of animal & vegetable fats products; manufacturing margarine, shortenings and all kinds of food and non-food industry specialty fats, manufacturing packaging materials which used for edible oils and fats; storage business and bonded warehousing business of all kinds of animal & vegetable fats; international trade; providing product distribution services for companies within the group; wholesale, commission agency (excluding auction), import and export of edible vegetable oil, grease, food and food additives, and other related business.

SC is mainly engaged in manufacturing, processing and selling various types of vegetable oils and all kinds of animal & vegetable fats products.

Mr. Mu Yankui is legal representative and chairman of SC at present.

SC is known to have approx. 558 employees at present.

SC is currently operating at the above stated address, and this address houses its operating office and factory in Tianjin Port Free Trade Zone. SC’s employee refused to release the detailed information of the premise.

SC is not known to host website of its own at present.

No significant changes were found during our checks with the local AIC.

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

Organization Code: 741376398

There is no record of litigation till now. 

MAIN SHAREHOLDERS:

Name % of Shareholding

Wilmar Trading (China) Pte. Ltd. (Singapore) 100

l Legal Representative and Chairman:

Mr. Mu Yankui, ID# 13010219600920XXXX, born in 1960, 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 Yihai Kerry (Tianjin) International Trading Co., Ltd., Yihai Kerry Foodstuffs Industries (Tianjin) Co., Ltd., Yihai Kerry Biotechnology (Tianjin) Co., Ltd., Qinhuangdao Goldensea Foodstuff Industries Co., Ltd. as legal representative.

l General Manager:

Fang Changqing is currently responsible for the daily management of SC.

Working Experience(s):

At present Working in SC as general manager.

Also working in Yihai Kerry Foodstuffs Industries (Tianjin) Co., Ltd. as general manager.

l Directors:

Fang Changqing

Hong Meiling

l Supervisor:

Li Changping

SC is mainly engaged in manufacturing, processing and selling various types of vegetable oils and all kinds of animal & vegetable fats products.

SC’s products mainly include: peanuts oil, sesame oil, and palm oil, etc.

SC sources its materials 60% from domestic market, and 40% from overseas market. SC sells 100% of its products in domestic market.

The buying terms of SC include Check, L/C, 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 refused to release its major clients and suppliers.

Yihai Kerry (Tianjin) International Trading Co., Ltd.

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

Registration no.: 120116400008179

Legal representative: Mu Yankui

Incorporation date: 2012-09-20

Yihai Kerry Foodstuffs Industries (Tianjin) Co., Ltd.

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

Registration no.: 120000400115303

Legal representative: Mu Yankui

Incorporation date: 2010-07-15

Yihai Kerry Biotechnology (Tianjin) Co., Ltd.

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

Registration no.: 120000400115299

Legal representative: Mu Yankui

Incorporation date: 2010-07-15

Kerry Oils and Grains (Qingdao) Co., Ltd.

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

Registration no.: 370200400016791

Legal representative: Niu Yuxin

Incorporation date: 1994-11-17

Qinhuangdao Goldensea Foodstuff Industries Co., Ltd.

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

Registration no.: 130300400001679

Legal representative: Mu Yankui

Incorporation date: 2002-3-11

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 declined to release its banking details.

Balance Sheet

Unit: CNY’000

	As of Dec. 31, 2013
Cash & bank	16,065,050
Bills receivable	130,600
Inventory	802,710
Accounts receivable	679,520
Other Accounts receivable	1,217,690
Advances to suppliers	119,960
Interest receivable	337,330
Other current assets	6,356,680
	------------------
Current assets	25,709,540
Fixed assets net value	453,310
Projects under construction	0
Long term investment	0
Intangible assets	18,970
Other assets	43,830
	------------------
Total assets	26,225,650
	=============
Short-term loans	12,129,840
Bills payable	1,535,950
Accounts payable	123,340
Advances from clients	28,690
Accrued payroll	9,740
Tax payable	-490
Other Accounts payable	115,690
Entrusted loan	9,341,290
Other current liabilities	1,163,160
	------------------
Current liabilities	24,447,210
Long term liabilities	345,320
	------------------
Total liabilities	24,792,530
Equities	1,433,120
	------------------
Total liabilities & equities	26,225,650
	=============

Income Statement

Unit: CNY’000

	As of Dec. 31, 2013
Turnover	6,790,490
Cost of goods sold	6,517,490
Taxes and additional of main operation	3,210
Sales expense	88,000
Management expense	54,450
Finance expense	93,620
Investment income	361,060
Non-operating income	24,140
Non-operating expense	1,980
Profit before tax	383,100
Less: profit tax	96,950
Profits	286,150

Important Ratios

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

	As of Dec. 31, 2013
*Current ratio	1.05
*Quick ratio	1.02
*Liabilities to assets	0.95
*Net profit margin (%)	4.21
*Return on total assets (%)	1.09
*Inventory /Turnover ×365	44 days
*Accounts receivable/Turnover ×365	37 days
*Turnover/Total assets	0.26
* Cost of goods sold/Turnover	0.96

PROFITABILITY: FAIRLY GOOD

l The turnover of SC appears good in its line.

l The investment income of SC appears fairly good.

l SC’s net profit margin remains in an average level.

l SC’s return on total assets remains in an average level.

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

LIQUIDITY: AVERAGE

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

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

l The inventory of SC appears average.

l The accounts receivable of SC appears average.

l SC’s short-term loan appears large in 2013.

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

LEVERAGE: FAIR

l The debt ratio of SC is high.

l The risk for SC to go bankrupt is average.

Overall financial condition of the SC: Fairly stable.

SC is considered medium-sized in its line with fairly stable financial conditions. The large amount of short loans could be a threat to SC’s financial condition.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.61.46
UK Pound	1	Rs.98.21
Euro	1	Rs.77.45

INFORMATION DETAILS

Analysis Done by :	DIV
Report Prepared by :	PDT

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.