MIRA INFORM REPORT

Report Date :

01.09..2014

IDENTIFICATION DETAILS

Name :	GENCHEM & GENPHARM (CHANGZHOU) CO., LTD
Formerly Known As :	GENCHEM (CHANGZHOU) CO., LTD.
Registered Office :	No. 658 Yulong North Road, Binjiang Economic Development Zone Xinbei District, Changzhou, Jiangsu Province 213127 Pr
Country :	China
Financials (as on) :	31.12.2013
Date of Incorporation :	22.08.2006
Com. Reg. No.:	320400400019176
Legal Form :	Chinese-Foreign Equity Joint Venture Enterprise
Line of Business :	Manufacturing Triethyl, Triethylborane, Hydrochloric Acid (By-Product); Selling Self-Made Products.
No of Employees :	170

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

sc’s INFO.

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

GENCHEM & GENPHARM (CHANGZHOU) CO., LTD.

no. 658 yulong north road, binjiang economic development zone

XINBEI DISTRICT, CHANGZHOU, JIANGSU PROVINCE 213127 PR CHINA

TEL: 86 (0) 519-85095778/85720002

FAX: 86 (0) 519-85720007

EXECUTIVE SUMMARY

Date of Registration : AUGUST 22, 2006

REGISTRATION NO. : 320400400019176

LEGAL FORM : CHINESE-FOREIGN EQUITY JOINT VENTURE ENTERPRISE

CHIEF EXECUTIVE : CHEN YANG (LEGAL REPRESENTATIVE)

REGISTERED CAPITAL : CNY 50,000,000

staff : 170

BUSINESS CATEGORY : MANUFACTURING & TRADING

Revenue : CNY 123,278,000 (AS OF DEC. 31, 2013)

EQUITIES : CNY 74,811,000 (AS OF DEC. 31, 2013)

WEBSITE : www.genchem.cn

E-MAIL : marketing@genchem.cn

PAYMENT : AVERAGE

MARKET CONDITION : COMPETITIVE

FINANCIAL CONDITION : fairly stable

OPERATIONAL TREND : fairly STEADY

GENERAL REPUTATION : AVERAGE

EXCHANGE RATE : CNY 6.14 = 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 a Chinese-foreign equity joint venture enterprise of PRC with State Administration of Industry & Commerce (SAIC) under registration No.: 320400400019176 on August 22, 2006.

SC’s Organization Code Certificate No.: 77969035-8

SC’s Tax No.: 320400779690358

SC’s registered capital: CNY 50,000,000

SC’s paid-in capital: CNY 50,000,000

Registration Change Record:-

Date	Change of Contents	Before the change	After the change
--	Company Name	Genchem (Changzhou) Co., Ltd.	Genchem Genpharm (Changzhou) Co., Ltd.

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

Name of Shareholder (s)	% of Shareholding
Genchem China Limited (Hong Kong)	74
Yabang Investment Holding Group Co., Ltd.	26

SC’s Chief Executives:-

Position	Name
Legal Representative and Chairman	Chen Yang
Vice Chairman	Xu Xiaochu
General Manager	Wang Yuqin
Director	Liang Yushen
	Zhang Dongliang
Supervisor	Jiang Guoyuan
	Xia Yong

RECENT DEVELOPMENT

No recent development was found during our checks at present.

SHAREHOLDER CHART & BACKGROUND

Name % of Shareholding

Genchem China Limited (Hong Kong) 74

Yabang Investment Holding Group Co., Ltd. 26

Genchem China Limited (Hong Kong)

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

Date of Registration: July 25, 2003

Registration No.: 0854628

Legal Form: Private

Yabang Investment Holding Group Co., Ltd.

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

Date of Registration: December 27, 1993

Registration No.: 320483000073923

Chief Executive: Xu Xiaochu

Registered Capital: CNY 100,000,000

MANAGEMENT

Chen Yang, Legal Representative and Chairman

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

Gender: M

Passport No.: 103291915

Qualification: University

Working experience (s):

At present, working in SC as legal representative and chairman, also working in Changzhou Genchem Co., Ltd. as legal representative

Xu Xiaochu , Vice Chairman

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

Gender: M

Age: 63

Qualification: University

Working experience (s):

At present, working in SC as vice-chairman, also working in Yabang Investment Holding Group Co., Ltd. as legal representative

Wang Yuqin, General Manager

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

Gender: F

Age: 47

Qualification: University

Working experience (s):

At present, working in SC as general manager

Director

----------

Liang Yushen

Zhang Dongliang

Supervisor

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

Jiang Guoyuan

Xia Yong

BUSINESS OPERATION

SC’s registered business scope includes manufacturing Triethyl, triethylborane, hydrochloric acid (by-product); selling self-made products. Manufacturing tert-butoxide, sodium tert-butoxide, sodium tert-amyl alcohol, tert-butyl dicarbonate, orthopropionate, trimethyl, Triethyl orthobutyrate Trimethyl orthobutyrate, orthovalerate trimethyl orthovalerate triethyl tetraethyl orthocarbonate, 4 - chlorobutanol, p-chlorophenyl glycine, o-chlorophenyl glycine, phenoxy, phosphorus oxychloride, N, N-dimethyl amino-3 - chloro propane hydrochloride, N-hydroxy succinimide, benzyl-N-succinimidyl carbonate, 2 - chlorobenzyl yl-N-succinimidyl carbonate, 2 - bromobenzyl-N - succinimidyl carbonate, cyclopentyl-N-succinimidyl carbonate, 9 - fluorenyl-methyl-N-succinimidyl carbonate, N, N'-di-succinimidyl group carbonate, potassium chloride (by-product); selling self-made products.

SC is mainly engaged in manufacturing and selling pharmaceutical intermediates, pesticide intermediates.

SC’s products mainly include: Alkali Metal Alcoholate, Ortho Ester, Amino acid Protecting Reagent, Protected Amino Acid, Fluorophenol Custom, etc.

SC sources its materials 100% from domestic market. SC sells its products 95% in domestic market, and 5% to overseas 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, L/C and Credit of 30-60 days.

*Major Customer:

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

Chem Imp. & Exp. International Inc.

Staff & Office:

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

SC is known to have approx. 170 staff at present.

SC owns an area as its operating office & factory of approx. 20,000 sq. meters at the heading address.

RELATED COMPANY

According to www.yabang.com

Jiangsu Yabang Dyestuff Co., Ltd.

Jiangsu Yabang Coating Co., Ltd.

Jiangsu Yabang Pigment Co., Ltd.

Jiangsu Yabang Pharmaceutical (Group) Co., Ltd.

Changzhou Yabang Veterinary Co., Ltd.

Changzhou Genchem Co., Ltd.

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, 2012	As of Dec. 31, 2013
Cash	10,610	17,130
Notes receivable	1,403	1,113
Accounts receivable	15,919	25,990
Advances to suppliers	1,459	1,083
Other receivable	2,692	452
Inventory	18,678	25,652
Non-current assets within one year	0	0
Other current assets	81	82
	------------------	------------------
Current assets	50,842	71,502
Fixed assets	49,813	55,833
Construction in progress	345	361
Intangible assets	33,649	32,595
Long-term prepaid expenses	1,656	1,756
Deferred income tax assets	0	0
Other non-current assets	85	3,250
	------------------	------------------
Total assets	136,390	165,297
	=============	=============
Short-term loans	54,000	54,000
Notes payable	1,693	12,685
Accounts payable	10,183	17,295
Wages payable	0	0
Taxes payable	813	352
Advances from clients	613	863
Other payable	2,057	4,930
Other current liabilities	495	361
	------------------	------------------
Current liabilities	69,854	90,486
Non-current liabilities	0	0
	------------------	------------------
Total liabilities	69,854	90,486
Equities	66,536	74,811
	------------------	------------------
Total liabilities & equities	136,390	165,297
	=============	=============

Income Statement

Unit: CNY’000	As of Dec. 31, 2012	As of Dec. 31, 2013
Revenue	104,092	123,278
Cost of sales	75,985	85,253
Taxes and surcharges	671	754
Sales expense	1,989	2,265
Management expense	12,770	18,104
Finance expense	3,714	4,339
Non-business income	338	383
Non-business expenditure	210	69
Profit before tax	9,090	12,876
Less: profit tax	971	2,001
Profits	8,119	10,875

Important Ratios

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

	As of Dec. 31, 2012	As of Dec. 31, 2013
*Current ratio	0.73	0.79
*Quick ratio	0.46	0.51
*Liabilities to assets	0.51	0.55
*Net profit margin (%)	7.80	8.82
*Return on total assets (%)	5.95	6.58
*Inventory / Revenue ×365	66 days	76 days
*Accounts receivable/ Revenue ×365	56 days	77 days
*Revenue/Total assets	0.76	0.75
*Cost of sales / Revenue	0.73	0.69

FINANCIAL COMMENTS

PROFITABILITY: FAIRLY GOOD

The revenue of SC appears fairly good in its line.

SC’s net profit margin is fairly good.

SC’s return on total assets is fairly good.

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

LIQUIDITY: FAIR

The current ratio of SC is maintained in a fair level.

SC’s quick ratio is maintained in a fair level.

The inventory of SC is maintained in an average level.

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

The short-term loans of SC appear large.

SC’s revenue is in a fair level, comparing with the size of its total assets.

LEVERAGE: AVERAGE

The debt ratio of SC is average.

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. The large amount of short-term loans may be a threat to SC’s financial condition. A credit line up to USD 500,000 is recommended upon a periodical review basis.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.60.47
UK Pound	1	Rs.100.35
Euro	1	Rs.79.86

INFORMATION DETAILS

Analysis Done by :	KAR
Report Prepared by :	SHG

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.