MIRA INFORM REPORT

Report Date :

20.12.2012

IDENTIFICATION DETAILS

Name :	TONGTEX LTD.

Registered Office :	Room 902, 9/F., New Kowloon Plaza, 38 Tai Kok Tsui Road, Tai Kok Tsui, Kowloon

Country :	Hong Kong

Date of Incorporation :	25.01.1999

Reg. No.:	22241987

Legal Form :	Private Limited Company

Line of Business :	Importer, Exporter and Wholesaler of All kinds of fabrics, etc

No. of Employees :	12

RATING & COMMENTS

MIRA’s Rating :

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 30^th, 2012

Country Name

Previous Rating

(31.03.2011)

Current Rating

(30.06.2012)

Hong Kong

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

Hong Kong - ECONOMIC OVERVIEW

Hong Kong has a free market economy, highly dependent on international trade and finance - the value of goods and services trade, including the sizable share of re-exports, is about four times GDP. Hong Kong's open economy left it exposed to the global economic slowdown that began in 2008. Although increasing integration with China, through trade, tourism, and financial links, helped it to make an initial recovery more quickly than many observers anticipated, it again faces a possible slowdown as exports to the Euro zone and US slump. The Hong Kong government is promoting the Special Administrative Region (SAR) as the site for Chinese renminbi (RMB) internationalization. Hong Kong residents are allowed to establish RMB-denominated savings accounts; RMB-denominated corporate and Chinese government bonds have been issued in Hong Kong; and RMB trade settlement is allowed. The territory far exceeded the RMB conversion quota set by Beijing for trade settlements in 2010 due to the growth of earnings from exports to the mainland. RMB deposits grew to roughly 7.8% of total system deposits in Hong Kong by the end of 2011, an increase of over 59% since the beginning of the year. The government is pursuing efforts to introduce additional use of RMB in Hong Kong financial markets and is seeking to expand the RMB quota. The mainland has long been Hong Kong's largest trading partner, accounting for about half of Hong Kong's exports by value. Hong Kong's natural resources are limited, and food and raw materials must be imported. As a result of China's easing of travel restrictions, the number of mainland tourists to the territory has surged from 4.5 million in 2001 to 28 million in 2011, outnumbering visitors from all other countries combined. Hong Kong has also established itself as the premier stock market for Chinese firms seeking to list abroad. In 2011 mainland Chinese companies constituted about 43% of the firms listed on the Hong Kong Stock Exchange and accounted for about 56% of the Exchange's market capitalization. During the past decade, as Hong Kong's manufacturing industry moved to the mainland, its service industry has grown rapidly. Growth slowed to 5% in 2011. Credit expansion and tight housing supply conditions caused Hong Kong property prices to rise rapidly in 2010 and inflation to rise 5.3% in 2011. Lower and middle income segments of the population are increasingly unable to afford adequate housing. Hong Kong continues to link its currency closely to the US dollar, maintaining an arrangement established in 1983.

Source : CIA

Company name

TONGTEX LTD.

ADDRESS

Room 902, 9/F., New Kowloon Plaza, 38 Tai Kok Tsui Road, Tai Kok Tsui, Kowloon, Hong Kong.

PHONE: 2342 3322

FAX: 2342 2020

E-MAIL: deswell@tongtex.com.hk

MANAGEMENT

Managing Director: Mr. Tong Hing Leung, Kenneth

SUMMARY

Incorporated on: 25th January, 1999.

Organization: Private Limited Company.

Capital: Nominal: HK$10,000.00

Issued: HK$10,000.00

Business Category: Importer, Exporter and Wholesaler.

Annual Turnover: US$25-35 million.

Employees: 12.

Main Dealing Banker: DBS Bank (Hong Kong) Ltd., Hong Kong.

Banking Relation: Satisfactory.

Company name

TONGTEX LTD.

ADDRESS

Registered Head Office:-

Room 902, 9/F., New Kowloon Plaza, 38 Tai Kok Tsui Road, Tai Kok Tsui, Kowloon, Hong Kong.

Associated Companies:-

Deswell Ltd., Hong Kong.

Hangzhou Huaming Textile Co. Ltd., China.

Zhejiang Tongchang Garments Co. Ltd., China.

Zhejiang Tongtex Fashion Co. Ltd., China.

BUSINESS REGISTRATION NUMBER

22241987

COMPANY FILE NUMBER

0665875

MANAGEMENT

Managing Director: Mr. Tong Hing Leung, Kenneth

CAPITAL

Nominal Share Capital: HK$10,000.00 (Divided into 10,000 shares of HK$1.00 each)

Issued Share Capital: HK$10,000.00

SHAREHOLDERS

(As per registry dated 25-01-2012)

Name		No. of shares
TONG Hing Leung		6,000
TSE Lung Tan		4,000
		–––––
	Total:	10,000 =====

DIRECTOR

(As per registry dated 25-01-2012)

Name (Nationality)	Address
TONG Hing Leung	Room 902, 9/F., New Kowloon Plaza, 38 Tai Kok Tsui Road, Kowloon, Hong Kong.

Name

(Nationality)

Address

TONG Hing Leung

Room 902, 9/F., New Kowloon Plaza, 38 Tai Kok Tsui Road, Kowloon, Hong Kong.

SECRETARY

(As per registry dated 25-01-2012)

Name	Address	Co. No.
Greenwood Secretaries Ltd.	Room 302, 3/F., Yu To Sang Building, 37 Queen’s Road Central, Hong Kong.	0802815

HISTORY

The subject was incorporated on 25th January, 1999 as a private limited liability company under the Hong Kong Companies Ordinance.

Formerly the subject was located at Unit 701-705, 7/F. Swire & Maclaine House, 19-23 Austin Avenue, Tsimshatsui, Kowloon, Hong Kong moved to present address in May 2007.

Apart from these, neither material change nor amendment has been ever traced and noted.

OPERATIONS

Activities: Importer, Exporter and Wholesaler.

Lines: All kinds of fabrics, etc.

Brand Name: AESOMINO.

Employees: 12.

Commodities Imported: China, other Asian countries, etc.

Markets: Middle East, North America, Southeast Asia, Other Asian countries, etc.

Annual Turnover: US$25-35 million.

Terms/Sales: L/C or as per contracted.

Terms/Buying: L/C, T/T, D/P, etc.

FINANCIAL INFORMATION

Nominal Share Capital: HK$10,000.00 (Divided into 10,000 shares of HK$1.00 each)

Issued Share Capital: HK$10,000.00

Mortgage or Charge (since 2004): (See attachment)

Profit or Loss: Making a small profit every year.

Condition: Keeping in a satisfactory manner.

Facilities: Making rather active use of general banking facilities.

Payment: Met trade commitments as required.

Commercial Morality: Satisfactory.

Bankers:-

DBS Bank (Hong Kong) Ltd., Hong Kong.

Citibank N.A., Hong Kong Branch.

Citigroup Technology Infrastructure (Hong Kong) Ltd., Hong Kong.

Standing: Normal.

GENERAL

Having issued 10,000 ordinary shares of HK$1.00 each, Tongtex Ltd. is jointly owned Mr. Tong Hing Leung, holding 60% interests, and Mr. Tse Lung Tan, holding 40%. Tong is also the only director of the subject.

The subject is a fabric trader. It is trading in the following commodities:-

Corduroy, Velvet, Moleskin, Boucle/Tweeds, Flannel;
Cotton, Linen, TR, C/N, Viscose, Wool, Model, Tencel;
Poplin, Voile, Gauze, Crinkle, Chambray, Oxford, Seersucker;
Silky finish, Wrinkle resistant, Soil resistant, Teflon, Nano, Carbon peaching, Aero finish, Coating;
Stretched, Embroidery, Textures/Dobbies, Jacquard, Burn-out;
Twill, Canvas, Herringbone, Satin, Ristop, Ottoman, Bedford; &
Yarn Dyed, Solid Dyed, Print.

The subject is specialized in woven fabrics. Linen accounts for one-third of all business in a production that includes pure linen and blends with cotton, rayon, silk and spandex, as well as ramie, flax and hemp.

The subject sells one million yards each of dyed and yarn-dyed linen and 500,000 yards of printed linen every two months for the spring and summer fashion seasons.

According to the subject, its products have been exported to Asian countries, which account for 5% market share; 15% for the European market while 80% for the US market. Prices vary according to product and quantity, and minimum orders are 3,000 yards per pattern per colour for yarn-dyed linen, 3,000 yards per colour for piece-dyed and 8,000 yards per design for printed linen.

The subject has had three associated firms in China while all are in Zhejiang Province. One of the associated firms is known as Hangzhou Huaming Textile Co. Ltd. The other main one is Zhejiang Tongtex Fashion Co. Ltd., China. This firm engaged in manufacturing garments as well as fabrics.

The subject has registered its trade mark Aesomino both in Hong Kong and China.

The following firms are some of the customers of the subject:-

Target, Gap, Macys, Sears/Kmart, Charming Shoppe, Kohis, VF, Mervyns, Liz Ciaiborne, Kellwood (Koret), Chaps, Jones, New Times, Nordstrom, Marks & Spencer, Kaphal Levis, H & M, Polo (Europe), Calvin Klein Jeans, etc.

The annual sales turnover of the subject ranges from US$25 to 35 million. Making a small profit every year. Overall business is active.

As the history of the subject is over 13 years and ten months in Hong Kong, on the whole, consider it good for normal business engagements.

MORTGAGE OR CHARGE

(Since 2004)

Date	Particulars	Amount
19-10-2004	Instrument: Deposit Deed Property: By way of a first fixed charge & as a continuing security for the obligations, the company charges all the company’s right, title to and interest in all the company’s accounts (including any renewal, rollover or redesignation of the accounts) maintained with any branch of Citibank N.A. and all credit balance from time to time in such accounts Mortgagee: Citibank N.A., Hong Kong Branch. Citicorp Commercial Finance (H.K.) Ltd., Hong Kong. [Now known as Citigroup Technology Infrastructure (Hong Kong) Ltd.]	All moneys now or at any time in the future owing by the Company and Deswell Ltd. to Citibank N.A. and Citicorp Commercial Finance (H.K.) Ltd., under any banking, derivative, foreign exchange, trade, margin, guarantee or other facility or facilities or any account and all other liabilities
19-11-2009	Instrument: Deposit Deed Property: By way of a first fixed chargee and as a continuing security for the Obligations, the company chargee and assigns absolutely all its rights, title to and interest in the accounts and all deposits from time to time in the Accounts and comprising the Accounts maintained with Citibank, N.A., Hong Kong Branch and Citibank (Hong Kong) Ltd. Mortgagee: Citibank N.A., Hong Kong Branch.	All moneys now or at any time in the future owing by the company under any banking, derivative, foreign exchange, trade, margin, guarantee or other facility or facilities or any account and all other liabilities, including, any and all the obligations of the company and the Principal under any facilities pre-existing prior to the date of execution of this Deed
12-07-2010	Instrument: Charge on Cash Deposit to secure Liabilities Property: 1) By way of first fixed charge and agreement to charge: the Deposit and all right, title and interest of the Company 2) By way of set-off: any sum standing to the credit of any one or more of the accounts of the Company with the Bank Mortgagee: DBS Bank (Hong Kong) Ltd., Hong Kong.	All sums of money and liabilities whether actual or contingent

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.54.73
UK Pound	1	Rs.89.02
Euro	1	Rs.72.48

INFORMATION DETAILS

Report Prepared by :

SDA

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.