MIRA INFORM REPORT

Report Date :

29.12.2012

IDENTIFICATION DETAILS

Name :	LEPACHU LTD.
Registered Office :	Unit 1-6, 6/F., Block 2, Nan Fung Industrial City, 18 Tin Hau Road, Tuen Mun, New Territories
Country :	Hong Kong
Date of Incorporation :	06.05.1986
Com. Reg. No.:	10284068
Legal Form :	Private Limited Company.
Line of Business :	Importer and Exporter of Mannequin and mannequin parts, hair care products, etc.
No. of Employees :	13

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 30^th, 2012

Country Name	Previous Rating (31.03.2011)	Current Rating (30.06.2012)
Hong Kong	A2	A2

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 and address

LEPACHU LTD.

ADDRESS: Unit 1-6, 6/F., Block 2, Nan Fung Industrial City, 18 Tin Hau Road, Tuen Mun, New Territories, Hong Kong.

PHONE: 2455 7322

FAX: 2455 7383

E-MAIL: lpcltdhk@netvigator.com

MANAGEMENT

Managing Director: Mr. Pang Kam Chiu

SUMMARY

Incorporated on: 6th May, 1986.

Organization: Private Limited Company.

Capital: Nominal: HK$200,000.00

Issued: HK$200,000.00

Business Category: Importer and Exporter.

Employees: 13.

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

Banking Relation: Satisfactory.

ADDRESS

Registered Head Office:-

Unit 1-6, 6/F., Block 2, Nan Fung Industrial City, 18 Tin Hau Road, Tuen Mun, New Territories, Hong Kong.

Associated Companies:-

Aroton Ltd., Hong Kong.

Lepachu (China) Ltd., Hong Kong.

Pivot Point International (China) Ltd., Hong Kong.

BUSINESS REGISTRATION NUMBER

10284068

COMPANY FILE NUMBER

0168839

MANAGEMENT

Managing Director: Mr. Pang Kam Chiu

CAPITAL

Nominal Share Capital: HK$200,000.00 (Divided into 20,000 shares of HK$10.00 each)

Issued Share Capital: HK$200,000.00

SHAREHOLDERS

(As per registry dated 06-05-2012)

Name		No. of shares
PANG Kam Chiu		10,001
Yeung Jiu Ltd., Hong Kong.		9,999
		––––––
	Total:	20,000 =====

DIRECTORS

(As per registry dated 06-05-2012)

Name (Nationality)	Address
PANG Kam Chiu	Flat F, 22/F., Tower 1, Sorrento, Tsimshatsui, Kowloon, Hong Kong.
PANG Ying Yeung, Alan	Flat F, 31/F., Tower 1, Sorrento, Tsimshatsui, Kowloon, Hong Kong.

SECRETARY

(As per registry dated 06-05-2012)

Name	Address	Co. No.
Harris Secretaries Ltd.	8/F., Hong Kong Trade Centre, 161-167 Des Voeux Road Central, Hong Kong.	0031138

HISTORY

The subject was incorporated on 6th May, 1986 as a private limited liability company under the Hong Kong Companies Ordinance.

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

OPERATIONS

Activities: Importer and Exporter.

Lines: Mannequin and mannequin parts, hair care products, etc.

Employees: 13.

Commodities Imported: China, etc.

Markets: Australasia, Japan, Korea, North America, Taiwan, Western Europe, etc.

Terms/Sales: L/C, T/T, etc.

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

FINANCIAL INFORMATION

Nominal Share Capital: HK$200,000.00 (Divided into 20,000 shares of HK$10.00 each)

Issued Share Capital: HK$200,000.00

Mortgage or Charge:-

Date of Deed of Indemnity,
Charges Over Deposit and Set-Off: 18‑05‑2011

Amount: All moneys in respect of general banking facilities

Property: All the Company’s estate, right, title, claim, benefit and interest to and in the Deposit (No.: 012-382-5-024248-9 and Amount: CNY13,400,000.00) and all interest from time to time payable thereon and together with all title deeds or documents relating thereto.

Mortgagee: Bank of China (Hong Kong) Ltd., Hong Kong.

Profit or Loss: Making a small profit every year.

Condition: Keeping in a satisfactory condition.

Facilities: Making rather active use of general banking facilities.

Payment: Met trade commitments as contracted.

Commercial Morality: Satisfactory.

Banker: Bank of China (Hong Kong) Ltd., Hong Kong.

Standing: Good.

GENERAL

Having issued 20,000 ordinary shares of HK$10.00 each, Lepachu Ltd. is almost equally owned by Mr. Pang Kam Chiu and Yeung Jiu Ltd. The former is a Hong Kong merchant while the latter is a Hong Kong-registered firm.

The subject is one of the comprehensive and competitive enterprises engaged in the international hair and beauty markets. It is not only manufactures, exports, imports and distributes high quality hair and beauty product, but also specialized in hair and beauty education and related services.

It is one of the largest mannequin head suppliers in the world. Its mannequins are designated by OMC for world competitions, designated by Japanese Government for national examinations, and designated by Pivot Point world‑wide member schools and colleges.

The subject has had two factories located in Guangzhou, Guangdong Province, China, and Chengdu, Sichuan Province. The Guangzhou factory was established in 1986. It is a 3-storied building with 50,000 sq.ft. and has over 1,000 workers.

The subject’s second factory is in Sichuan International Hair and Beauty Industrial Park. It was established in Chengdu, Sichuan Province in 1996. Now, it has over 1,000 employees. The factory covers an area of about 300,000 sq.ft.

Besides mannequins, the subject also manufactures and exports the following products to the world-wide hair and beauty markets:-

Electric curling irons and hair dryers, scissors, wigs, men’s toupee, hair extension (remy and non-remy hair), plastic and metal tools, salon equipment, hair care products, etc.

Besides manufacturing and exporting, the subject is also engaged in importing, distributing and selling hair and beauty products in Hong Kong and China. During the past 10 years, it has expanded its business and built up a good image in larges cities of China.

According to the subject, it is importing, distributing and selling the following products in China and Hong Kong:-

Hair care products, make up products, jessetter, education materials, beauty care products, salon equipment, professional hair dryers and curling irons, hair and beauty magazines, etc.

The subject has over 20 distribution companies and 17 Pivot Point hair and beauty schools in China. Pivot Point is the world leader in hair and beauty education. It has the most advanced education system in the world. All of Pivot Point’s educational programs are being released on the laser disc and DVD formats, and these “Laser Education Systems” are effectively used in the subject’s schools in Guangzhou and Sichuan.

Pivot Point Guangzhou was established in 1993 and it was the first Pivot Point school in China. Over 40,000 students were graduated in Pivot Point Guangzhou during the past 8 years.

Pivot Point Sichuan, now known as “Pivot Point College of Sichuan”, has got the official permission from the Education Department of Sichuan Province to offer advanced hair & beauty courses. It is also the first government approved hair & beauty college in China.

The annual sales turnover of the subject is very significant.

The history of the subject in Hong Kong is over twenty-six years.

On the whole, consider it good for normal business engagements.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.54.85
UK Pound	1	Rs.88.39
Euro	1	Rs.72.63

INFORMATION DETAILS

Report Prepared by :

PRL

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%)

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This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.