MIRA INFORM REPORT

Report Date :

13.05.2008

IDENTIFICATION DETAILS

Name :	ANHUI GARMENTS SHOES & CAPS INDUSTRIAL (GROUP) CO.
Registered Office :	NO. 112, Lujiang Road, Hefei, Anhui Province, 230061 Pr
Country :	China
Financials (as on) :	31.12.2007
Date of Incorporation :	02.06. 1992
Com. Reg. No.:	3400001002082
Legal Form :	State-Owned Enterprise
Line of Business :	Selling Different Sorts of Garments, Shoes and Caps.

RATING & COMMENTS

MIRA’s Rating :

B

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average.	Small

Maximum Credit Limit :	USD 70,000
Status :	Small Company
Payment Behaviour :	No Complaints
Litigation :	Clear

name & address

ANHUI GARMENTS SHOES & CAPS INDUSTRIAL (GROUP) CO.

NO. 112, LUJIANG ROAD, HEFEI, ANHUI PROVINCE, 230061 PR CHINA

112

TEL: 86 (0) 551-2644642 FAX: 86 (0) 551-2642174

EXECUTIVE SUMMARY

INCORPORATION DATE : JUNE 2, 1992

REGISTRATION NO. : 3400001002082

REGISTERED LEGAL FORM : STATE-OWNED ENTERPRISE

CHIEF EXECUTIVE : MS. WANG NING (CHAIRMAN)

STAFF STRENGTH : 60

REGISTERED CAPITAL : CNY 11,560,000

BUSINESS LINE : TRADING

TURNOVER : CNY 172,340,000 (AS OF DEC. 31, 2007)

EQUITIES : CNY 6,320,000 (AS OF DEC. 31, 2007)

PAYMENT : AVERAGE

RECOMM. CREDIT RANGE : UP TO USD 70,000

MARKET CONDITION : AVERAGE

FINANCIAL CONDITION : fairly STABLE

OPERATIONAL TREND : fairly STEADY

GENERAL REPUTATION : AVERAGE

EXCHANGE RATE : CNY 6.99 = 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 state-owned enterprise at local Administration for Industry & Commerce (AIC - The official body of issuing and renewing business license) on June 2, 1992.

Company Status: State-owned enterprise

This form of business in PR China is defined as a commodity production or operational units of a socialist character which in accordance with the law, has autonomy in management, takes full responsibility for its profits and losses and practices independent business accounting. It is a legal person established directly by central / local government or enterprise owned by central or local government. In theory, the liabilities of this form of enterprise are ultimately borne by the government, since the adoption of company law in mid-1994, the Chinese government has planned to separate the ownership from management and liabilities bearing.

SC’s registered business scope includes designing, manufacturing, selling and exporting garments, shoes & caps, gloves, toys, garments, bedding series products; importing and selling raw materials, machinery, meters and parts needed in produce and research; designing, manufacturing and selling textiles, technical consulting services; selling building materials, hardware, general merchandise; house leasing.

SC is mainly engaged in selling different sorts of garments, shoes & caps.

Ms. Wang Ning has been legal representative and chairman of SC since 1995.

SC is known to have approx. 60 employees at present.

SC is currently operating at the above stated address, and this address houses its operating office and factory in the industrial zone of Hefei. Our checks reveal that SC owns the total premise about 500 square meters.

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

Email: AHGIGC@ahgigc.com

No significant events or changes were found during our checks with the local Administration for Industry and Commerce.

MAIN SHAREHOLDERS:

Name % of Shareholding

State-owned Assets Supervision and Administration Commission of Anhui Provincial Government

100

l Legal representative and chairman:

Ms. Wang Ning , 51 years old with university education. She is currently responsible for the overall management of SC.

Working Experience(s):

From 1995 to present Working in SC as chairman and legal representative.

SC is mainly engaged in selling different sorts of garments, shoes & caps.

SC’s products mainly include garments, bags and presents, etc.

SC sources its materials 100% from domestic market. SC sells 10% of its products in domestic market, and 90% to overseas market, mainly U.S.A., Europe and Southeast Asian 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.

SC is known to have the following subsidiaries:

Anhui Garments Shoes & Caps Industrial (Group) Co. Equipment Sales Branch Company.

Anhui Textile Garments Research Institute.

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.

Bank of China Anhui Province Branch

AC#489900489808091001

Relationship: Normal.

Balance Sheet (as of Dec. 31, 2007)

Unit: CNY’000

Cash & bank	11,450
Inventory	2,200
Accounts receivable	820
Advances to suppliers	24,810
Other receivables	870
A receivable tax rebate of export	1,650
Other current assets	60
	------------------
Current assets	41,860
Fixed assets	14,330
Fixed assets net value	9,160
Projects under construction	0
Long term investment	2,580
Other assets	0
	------------------
Total assets	53,600
	=============
Short loans	8,200
Accounts payable	4,430
Other payable	10,710
Note payable	5,460
Welfare expenses payable	-30
Advances from clients	18,300
Taxes payable	-470
Accrued expenses	570
Other current liabilities	110
	------------------
Current liabilities	47,280
Long term liabilities	0
	------------------
Total liabilities	47,280
Equities	6,320
	------------------
Total liabilities & equities	53,600
	=============

Income Statement (as of Dec. 31, 2007)

Unit: CNY’000

Turnover	172,340
Cost of goods sold	157,320
Add: Income from other operations	1,670
Sales expense	12,500
Management expense	4,020
Finance expense	510
Non-operating income	1,120
Non-operating expense	310
Profit before tax	380
Less: profit tax	120
Profits	260

Important Ratios

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

	as of Dec. 31, 2007
*Current ratio	0.89
*Quick ratio	0.84
*Liabilities to assets	0.88
*Net profit margin (%)	0.15
*Return on total assets (%)	0.49
*Inventory /Turnover ×365	5 days
*Accounts receivable/Turnover ×365	2 days
*Turnover/Total assets	3.22
* Cost of goods sold/Turnover	0.91

PROFITABILITY: AVERAGE

l The turnover of SC appears fairly good in its line.

l SC’s net profit margin is average.

l SC’s return on total assets is average.

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

LIQUIDITY: AVERAGE

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

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

l The inventory of SC is maintained in a fairly good level.

l The accounts receivable of SC is maintained in a fairly good level.

l SC’s short-term loan appears fairly large.

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

LEVERAGE: AVERAGE

l The debt ratio of SC is fairly high.

l The risk for SC to go bankrupt is low.

Overall financial condition of the SC: Fairly Stable.

SC is considered medium-sized in its line with fairly stable financial conditions. A credit line up to USD 70,000 appears to be within SC’s capacities.

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.	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