MIRA INFORM REPORT

Report No. :	350152
Report Date :	17.11.2015

IDENTIFICATION DETAILS

Name :	KPIC DAWN POLYMER (SHANGHAI) CO., LTD.
Registered Office :	No. 568, Yungong Road, Fengxian District, Chemical Industry Park, Shanghai, 201424 Pr
Country :	China
Financials (as on) :	31.12.2014
Date of Incorporation :	23.12.2011
Com. Reg. No.:	310000400670994
Legal Form :	Chinese-Foreign Equity Joint Venture Enterprise
Line of Business :	Wholesale, import and export of plastic products, machinery equipment and spare parts, chemical raw materials and auxiliary materials
No. of Employees :	100

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 :	Slow but correct
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 – March 31, 2015

Country Name	Previous Rating (31.12.2014)	Current Rating (31.03.2015)
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. 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 2014 stood as the largest economy in the world, surpassing the US for the first time in modern history. Still, China's per capita income is below the world average.

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. In 2014 the People’s Bank of China (PBOC) doubled the daily trading band within which the RMB is permitted to fluctuate.

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 2014 more than 274 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. In 2014 China agreed to begin limiting carbon dioxide emissions by 2030. China also implemented several economic reforms in 2014, including passing legislation to allow local governments to issue bonds, opening several state-owned enterprises to further private investment, loosening the one-child policy, passing harsher pollution fines, and cutting administrative red tape.

Source : CIA

Company name and address

KPIC DAWN POLYMER (SHANGHAI) CO., LTD.

NO. 568, YUNGONG ROAD, FENGXIAN DISTRICT, CHEMICAL INDUSTRY PARK, SHANGHAI, 201424 PR CHINA

TEL: 86 (0) 21-37586633 FAX: 86 (0) 21-37586622

EXECUTIVE SUMMARY

INCORPORATION DATE : DEC. 23, 2011

REGISTRATION NO. : 310000400670994

REGISTERED LEGAL FORM : CHINESE-FOREIGN EQUITY JOINT VENTURE ENTERPRISE

CHIEF EXECUTIVE : MR. YU XIAONING (CHAIRMAN)

STAFF STRENGTH : 100

REGISTERED CAPITAL : USD 12,000,000

BUSINESS LINE : TRADING

TURNOVER : CNY 58,110,000 (AS OF DEC. 31, 2014)

EQUITIES : CNY 62,220,000 (AS OF DEC. 31, 2014)

PAYMENT : AVERAGE

MARKET CONDITION : AVERAGE

FINANCIAL CONDITION : FAIRLY STABLE

OPERATIONAL TREND : FAIRLY STEADY

GENERAL REPUTATION : AVERAGE

EXCHANGE RATE : CNY 6.3701= 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 Chinese-foreign equity joint venture enterprise at local Administration for Industry & Commerce (AIC - The official body of issuing and renewing business license) on Dec. 23, 2011.

Company Status: Chinese-foreign equity joint venture enterprise

This form of business in PR China is defined as a legal person. It is a limited co. jointly invested by one or more foreign companies and one or more PR China controlled companies within the territories of PR China according to a certain proportion of capital investment. The investing parties exercise business management, share profits and bear all risks and liabilities of the co. together. The equity joint venture law requires that foreign party contribute not less than 25% of the registered capital, with no maximum. The investing parties are free to agree on method of profit distribution and liabilities bearing according to the proportion of capital investment. Each investing parties contributes funds, tangible assets, technology. The board of directors excises the high authority. The joint venture usually has a limited duration of 10 to 50 years. Enterprise with large investment, long construction periods, low investment returns, introducing of advanced technology & advanced technology products that have good competition position in international market may extend beyond the 50 years limit.

SC’s registered business scope includes: wholesale, import and export of plastic products, machinery equipment and spare parts, chemical raw materials and auxiliary materials (except dangerous poisonous and explosive chemicals), and provide related technical consulting services (excluding the state-run goods, commodities involving quota and license administration, shall be dealt with in accordance with the relevant provisions) (With permit if needed)

SC is mainly engaged in trading of plastic products.

Mr. Yu Xiaoning is legal representative and chairman of SC at present.

SC is known to have approx. 100 employees at present.

SC is currently operating at the above stated address, and this address houses its operating office in the industrial park of Shanghai. SC’s accountant refused to release the detailed information of the premise.

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

E-mail: N/A

See below for SC as executive party (defendant).

Executed Party	SC
Court	Shanghai Fengxian People's Court
Date of Case	2015-05-04
Case Number	(2015) 02500
Claim Amount	RMB 90,000

Remark: Due to the lack of information, we are unable to provide the cause of action, judgment or other information.

There is no record about changes of registered information.

Organization Code: 586832727

MAIN SHAREHOLDERS:

Name % of Shareholding

Shandong Dawn Polymer Co., Ltd. 50

Korea Petrochemical Ind. Co., Ltd. 50

Shandong Dawn Polymer Co., Ltd.

Registered No.: 370681228007455

Incorporation date: 2002-12-06

Legal representative: Mr. Yu Xiaoning

Web: http://www.dawnprene.com/

Korea Petrochemical Ind. Co., LTD.

CEO: Yong Tae Jeong / Vice-President

Founded: 1970. 6. 2

Web: http://www.kpic.co.kr

Legal representative and Chairman:

Mr. Yu Xiaoning, born in 1967, with MBA degree, 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 Shandong Dawn Polymer Co., Ltd., Dawn Group Co., Ltd. and Shandong Dawn International Trading Co., Ltd.. as legal representative.

Directors:

Choi Seoung Jun

Hao Wenpeng

Ha Hyun Soo

Liu Yongbo

Supervisor:

Lim Chungkyu

SC is mainly engaged in trading of plastic products.

SC’s products mainly include: polypropylene, polyethylene, ABS, polyformaldehyde, PBT, polycarbonate, nylon, bioplastics and elastomer material.

SC sources its merchandise 50% from domestic market and 50% from overseas market. SC sells 70% of its products in domestic market, and 30% 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 Check, T/T, L/C and Credit of 30-60 days.

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

TRADEMARKS & PATENTS:

Registration No. 14774724 14774779

Registration Date 2015-7-7 2015-7-7

Trademark Design

Dawn Group Co., Ltd.

Registration no.: 370681228014411

Legal representative: Yu Xiaoning

DAWN Group Co., Ltd. has set up several principal industries: plastic industry, materials circulation industry, building materials industry and travel service industry. Recent years, it has passed ISO -9000:2000 authentication and listed as “Innovation Enterprise”, “Advanced Non-governmental Enterprise in Shandong”, “Shandong High-tech Enterprise”.

Tel: 0535-8861488/8867481

Web: http://www.chinadawn.cn/

Shandong Dawn International Trading Co., Ltd.

Incorporation Date : Sep. 9, 2010

Registration No. : 370681200011460

Legal representative : Mr. Yu Xiaoning

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 management declined to release its bank information.

Balance Sheet

Unit: CNY’000	as of Dec. 31, 2014
Cash & bank	4,890
Inventory	19,750
Accounts receivable	14,100
Advances to suppliers	4,230
Other Accounts receivable	760
Notes receivable	5,220
	------------------
Current assets	48,950
Fixed assets net value	18,090
Projects under construction	41,960
Long-term deferred expenses	280
Other assets	21,230
	------------------
Total assets	130,510
	=============
Short loans	36,240
Accounts payable	1,830
Advances from clients	960
Taxes payable	-5,740
Other Accounts payable	10
Accrued payroll	580
Deferred expenses	4,420
	------------------
Current liabilities	38,300
Long term liabilities	29,990
	------------------
Total liabilities	68,290
Equities	62,220
	------------------
Total liabilities & equities	130,510
	=============

Income Statement

Unit: CNY’000	as of Dec. 31, 2014
Turnover	58,110
Cost of goods sold	56,440
Tax and additional of main operation	0
Sales expense	1,610
Management expense	5,520
Finance expense	1,930
Non-operating income	190
Non-operating expense	20
Profit before tax	-7,220
Less: profit tax	0
Profits	-7,220

Important Ratios

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

	As of Dec. 31, 2014
*Current ratio	1.28
*Quick ratio	0.76
*Liabilities to assets	0.52
*Net profit margin (%)	-12.42
*Return on total assets (%)	-5.53
*Inventory /Turnover ×365	124 days
*Accounts receivable/Turnover ×365	89 days
*Turnover/Total assets	0.45
* Cost of goods sold/Turnover	0.97

PROFITABILITY: FAIR

The turnover of SC appears average in its line.

SC’s net profit margin is poor in 2014.

SC’s return on total assets is fair in 2014.

SC’s cost of goods sold is fairly high in 2014, comparing with its turnover.

LIQUIDITY: AVERAGE

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

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

The inventory of SC appears fairly large.

The accounts receivable of SC appears average.

SC’s short-term loan is fairly large in 2014.

SC’s turnover is in a poor level in 2014, comparing with the size of its total assets.

LEVERAGE: AVERAGE

The debt ratio of SC is average in 2014.

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 inventory and short-term loan could be a threat to SC’s financial condition.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.66.17
UK Pound	1	Rs.100.66
Euro	1	Rs.70.97

INFORMATION DETAILS

Analysis Done by :	HEE
Report Prepared by :	TRU

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.