MIRA INFORM REPORT

Report Date :

27.02.2007

IDENTIFICATION DETAILS

Name :	FOUNTAIN APPAREL LIMITED

Registered Office :	107 Felton Mathew Avenue, St Johns, Auckland

Country :	New Zealand

Date of Incorporation :	04.05.1964

Legal Form :	Limited Company

Line of Business :	Importers and wholesaler of men’s, women’s and children’s clothing.

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
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

Status :	Good

Payment Behaviour :	Usually correct

Litigation :	Clear

REGISTERED NAME:	FOUNTAIN APPAREL LIMITED

REGISTERED NUMBER:	66403

OPERATING ADDRESS:	107 Felton Mathew Avenue, St Johns, AUCKLAND

REGISTERED ADDRESS:	107 Felton Mathew Avenue, St Johns, AUCKLAND

OTHER TRADING NAMES:	Nil

TELEPHONE NUMBER:	(09) 521 6600

FAX NUMBER:	(09) 521 6608

WEB SITE ADDRESS:	www.fountain.co.nz

DATE OF INCORPORATION:	4 May 1964 – Incorporated in New Zealand.

CHANGE OF NAME:	13 June 2000 - To present name.

PAID CAPITAL:	$850,000 in $1 shares.

DIRECTORS:	WARREN HOWARD FOUNTAIN 24 Glendowie Road, AUCKLAND RONALD ANTHONY JURGELEIT 30 Goldie Street, St Heliers, AUCKLAND

SHAREHOLDERS:	Refer HISTORY

SECRETARY:	Not shown

AUDITORS:	Not shown

REGISTERED CHARGES:	Refer REGISTERED CHARGES

PAYMENTS:	Pay monthly

LEGAL ACTIONS / DEFAULTS:	Nil

EMPLOYEES:	60

PARENT COMPANY

RONARD DEVELOPMENTS LIMITED

ACTIVITIES

The subject operates as importers and wholesaler of men’s, women’s and children’s clothing.

The company imports from China and India.

Sales are to retail outlets on normal trading terms.

Operations are conducted from owned premises situated at the heading address.

The company does not have any branches.

The subject employs 60 in activities.

HISTORY

The subject was incorporated in New Zealand on 4 May 1964 as W I G Fountain Limited, adopting the present name on 13 June 2000.

Registered Number: 66403.

Paid capital $850,000 in 850,000 shares paid to $1 each.

Shares are held by:

RONARD DEVELOPMENTS LIMITED 850,000

The above information is in accordance with the last Annual Return lodged with the New Zealand Companies Office on 26 April 2006 and compiled at report date.

By virtue of the shareholding, the subject is a wholly owned subsidiary of Ronard Developments Limited of 107 Felton Mathew Avenue, St Johns, Auckland. Registered Number: 359394.

Operations of the company were commenced 40 years ago.

DIRECTORS

WARREN HOWARD FOUNTAIN was appointed to the board of directors on 20 March 1991. He is active in the day to day operations of the company.

RONALD ANTHONY JURGELEIT was appointed to the board of directors on 20 March 1991. He is also active in company operations.

BANK

WESTPAC INTERNATIONAL BANK

INTERNATIONAL BUSINESS CENTRE,

LEVELS 2 & 3,

79 QUEEN STREET,

AUCKLAND

The bank holds a Registered Charge over company assets. Please refer to the REGISTERED CHARGE section for details.

TRADING

Following are details of a trade survey undertaken in February 2007:

This is a large account, however actual trading figures were not provided. Payment is being met on a monthly basis. The account has been held prior to 2002.

This company has declined to provide references as a matter of company policy.

As the subject is an importer, the company is not a major seeker of local commercial credit.

FINANCE

The subject has not lodged financial accounts with the New Zealand Companies Office.

REGISTERED CHARGES

The following Registered Charge has been recorded over the subject’s assets:

On 15 May 2000, Charge to Westpac New Zealand Limited, charging all present and after acquired personal property.

The ‘Personal Property Securities Act 1999’ (PPSA) came into effect on 1 May 2002.

The PPSA has brought together registered charges that were historically created under several different Acts, e.g. debentures registered pursuant to the Companies Act and charges over specific assets registered pursuant to the Chattels Transfer Act 1924.

Charges registered are called Security Interests.

The PPSA is also used by suppliers to register a charge over goods which have been supplied to the subject in respect of which the supplier terms of trade may previously have contained a “reservation of title” clause.

Charges over land are not registered under the PPSA and there may be charges over land in the name of the subject.

There are also 7 Security Interests registered over goods – other and/or goods – motor vehicles.

RECORDED ACTIONS

Nothing of an adverse nature has been recorded against the subject.

INVESTIGATION

An interview was conducted with the Financial Controller in February 2007. At this time she confirmed operational and trading details and advised the following:

Annual sales of the company are in the vicinity of $20,000,000.

Premises at the heading address are owned by the parent company.

However, further financial information was declined.

Enquiries made with trade sources failed to trace any additional information in relation to the subject.

A Land Titles Search has not been undertaken to ascertain what land, if any, stands in the subject’s name. This can be undertaken on request.

CONCLUSION

The subject was incorporated in New Zealand on 4 May 1964 as W I G Fountain Limited, adopting the present name on 13 June 2000.

Paid capital $850,000 in 850,000 shares paid to $1 each.

The subject operates as importers and wholesaler of men’s, women’s and children’s clothing.

One supplier contacted has reported large monthly commitments being met on a monthly basis, the account having been known for sometime.

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	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	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
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

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