MIRA INFORM REPORT

Report Date :

21.02.2012

IDENTIFICATION DETAILS

Name :	MG MACAO COMMERCIAL OFFSHORE LTD.

Registered Office :	Avenida de Praia Grande, n° 567, Edificio Banco Nacional Ultramarino, 13° andar, “A”

Country :	Macau

Date of Incorporation :	06.07.2004

Com. Reg. No.:	19025 (SO)

Legal Form :	Offshore Company

Line of Business :	Garment Traders

No. of Employees :	1200 (Jordache - affiliated factory)

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
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

Status :	Not Registered in Hong Kong
Payment Behaviour :	Unknown
Litigation :	---

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 – September 30^th, 2011

Country Name

Previous Rating

(30.06.2011)

Current Rating

(30.09.2011)

Hong Kong

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

Company Name

MG MACAO COMMERCIAL OFFSHORE LTD.

Company ADDRESS

Registered Head Office:-

Avenida de Praia Grande, n° 567, Edificio Banco Nacional Ultramarino, 13° andar, ‘A’, Macau.

Hong Kong Corresponding Address:-

c/o Jordache International (Hong Kong) Ltd.

Room 901, 9/F., Wing On Plaza, 62 Mody Road, Tsimshatsui East, Kowloon, Hong Kong.

[Tel: 2762 4700; Fax: 2715 5074]

Holding Company:-

MG Overseas Ltd.

P.O. Box 438, Palm Grove House, Road Town, Tortola, British Virgin Islands.

Associated Company:-

Jordache International (Hong Kong) Ltd., Hong Kong.

Note: Please be advised that the subject has not registered with the Companies Registry of Hong Kong. It is a Macao-registered firm. Located at the above-mentioned address is a firm known as Jordache International (Hong Kong) Ltd. which is an associated company of the subject.

GENERAL

MG Macao Commercial Offshore Ltd., in English, is also known as “MG Comercial Offshore De Macau Limitada” in Portuguese. It was registered in Macao on 6th July, 2004 bearing Business Registration No. 19025 (SO).

The subject is a wholly-owned subsidiary of MG Overseas Ltd. [MG Overseas] which is a BVI-registered firm. It registered address in Macao is located at Avenida de Praia Grande, n° 567, Edificio Banco Nacional Ultramarino, 13° andar, ‘A’, Macau. It is incorporated under Decree-Law No. 58/99/M [58/99/M Company] and is exempted from Macao complementary tax (Macao income tax) as long as the 58/99/M Company does not sell its products to Macao resident it satisfies a number of conditions: These include:-

· all activities shall be conducted only in non-Macao currency (other than for the purpose of paying local expenses);

· the target customers cannot be Macao residents; and

· the target markets must be outside Macao.

The subject in fact is controlled by Mr. Vincent Chan Chun Sing who is a Hong Kong merchant.

The subject has got an associated company in Hong Kong known as Jordache International (Hong Kong) Ltd. [Jordache] which is a garment trader. The subject is also a garment trader.

The parent company of Jordache is also MG Overseas. Chan Chun Sing is one of the directors of Jordache. In fact, he is administering the business of Jordache as well as the subject.

The subject and Jordache are garment traders. They are carrying the following brands: “Dittos” (Licensee), “Blue Star” (Licensee), “Fubu Ladies Collection” (Brand Owner), “Gasoline®” (Brand Owner), “KIKIT® Jeans” (Brand Owner), “Steve Madden” (Licensee), “U S Polo Assn.®” (Brand Owner), “Jordache®” (Brand Owner), “Jordache Vintage®” (Brand Owner), “Earl Jean®” (Brand Owner), “Maurice Sasson®” (Brand Owner), etc.

Currently, Jordache has got an affiliated factory in the Philippines employing about 1,200 persons.

The subject carries the same commodities as Jordache, more or less. It carries suits and jackets, blouses, jeans, dresses, etc. Most of the garments are exported to the United States and Europe.

The Jordache Group is a leader in denim garment distribution. Jordache was set up by three brothers from Israel. Arriving in New York in the early 1960’s, the Nakash brothers, Joe, Ralph, and Avi, opened their first jeans store by 1969. In a few years, they expanded their business to four stores in the United States. Throughout the early 1970’s, the Nakash brothers kept their eyes on the European jeans market. Joe, Ralph, and Avi brought that “European-look jeans” to America and made it the “Jordache look”.

The results were staggering. Sales skyrocketed from US$72 million in 1979 to US$600 million by 1986. Throughout its history, Jordache has remained to be a fashion leader.

Today, the Jordache label is popular worldwide. Over 100 licensees employ the Jordache name for their products. Items such as eyewear, luggage, bedding, footwear, cosmetics and perfume, intimate apparel, even diapers, represent a sampling of the demand for the Jordache name.

Jordache is a privately held conglomerate with an international reach. Besides its own brands, Jordache also manufactures private label denim for well-known companies, including Gap, Tommy Hilfiger, Levi’s and Abercrombie & Fitch, among others.

In addition to its apparel business, Jordache has heavily invested in worldwide residential and commercial real estate, holding a major interest in a private jet charter service and owns an award-winning olive oil company “HALUTZA®”.

Jordache’s owned production facilities are located in Jordan, Madagascar, Kenya, Marocco, Mexico and Mauritius. Each facility is fully integrated with in-house cutting, sewing, wet-processing, sand-blasting, embroidery, finishing and packing capabilities. Jordache’s two distribution centres in New Jersey and Louisiana can support large-scale replenishment programs and are available for use by the private label division.

Jordache’s private label division develops and manufactures garments for other well-known brands.

The private label division is committed in good production quality and relies on Jordache’s extensive global resources, which include its wholly-owned factories, distribution centres and strategic international alliances.

The private label division has produced a variety of apparel — men’s, women’s, girls, boys and plus size, ranging from mass to premium — for companies including Abercrombie & Fitch, American Eagle, Express, Gap, Levi’s, J.C. Pennys, Sears, Old Navy, Express, Limited Too and Tommy Hilfiger.

In addition, the subsidiary of the Private Label division is Jordache which handles products development, technical supporting, raw materials purchasing and finance supporting.

Some of Jordache’s garments are manufactured by contracted factories in Thailand, Indonesia, the Philippines, China, etc., apart from manufactured by its own factory in the Philippines. In recent years, Jordache’s garments are chiefly sourced from China and Thailand. Main products are trousers, slacks, dresses, skirts, denim products, jeans, etc.

Set up by its holding company, the subject sometimes is responsible for acquiring raw materials, receiving payments for Jordache for the evading of certain amount of taxes in Hong Kong.

Jordache is employing about 30 persons, annual turnover ranges from HK$550 to 600 million. The sales turnover of Jordache Group for fiscal year ending December 2007 was about US$190 million. Making a rather good profit in the year.

The Chairman and CEO of Jordache is Mr. Joseph Nakash who is an American residing in New York.

On the whole, since the subject has not registered in Hong Kong, consider it not suitable for any business engagements.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.49.21
UK Pound	1	Rs.77.75
Euro	1	Rs.64.58

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.