MIRA INFORM REPORT

Report Date :

29.03.2012

IDENTIFICATION DETAILS

Name :	VF APPAREL (SHENZHEN) LIMITED

Registered Office :	No. 1325 Huishang Center, Jiahui New City, Fuhua Road, Futian District, Shenzhen, Guangdong Province, 518033 Pr

Country :	China

Financials (as on) :	31.12.2010

Date of Incorporation :	08.02.2007

Com. Reg. No.:	440301503307814

Legal Form :	Wholly Foreign Owned Enterprise

Line of Business :	Selling Garments

No. of Employees :	380 (Including Its Branches)

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	usd 1,000,000

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 – September 30^th, 2011

Country Name

Previous Rating

(30.06.2011)

Current Rating

(30.09.2011)

China

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

Company name & address

VF APPAREL (SHENZHEN) LIMITED

NO. 1325 HUISHANG CENTER, JIAHUI NEW CITY, FUHUA ROAD, FUTIAN DISTRICT,

SHENZHEN, GUANGDONG PROVINCE, 518033 PR CHINA

TEL: 86 (0) 755-83649200

FAX: 86 (0) 755-83649201

EXECUTIVE SUMMARY

INCORPORATION DATE : FEB. 8, 2007

REGISTRATION NO. : 440301503307814

REGISTERED LEGAL FORM : WHOLLY FOREIGN OWNED ENTERPRISE

CHIEF EXECUTIVE : MR. RYAN KIRK SMITH (CHAIRMAN)

STAFF STRENGTH : 380 (INCLUDING ITS BRANCHES)

REGISTERED CAPITAL : CNY 10,000,000

BUSINESS LINE : TRADING

TURNOVER : cny 639,540,000 (AS OF DEC. 31, 2010)

EQUITIES : cny 162,320,000 (AS OF DEC. 31, 2010)

PAYMENT : AVERAGE

RECOMM. CREDIT RANGE : up to usd 1,000,000

MARKET CONDITION : COMPETITIVE

FINANCIAL CONDITION : STABLE

OPERATIONAL TREND : steady

GENERAL REPUTATION : AVERAGE

EXCHANGE RATE : CNY 6.29= USD1

Adopted abbreviations

ANS - amount not stated

NS - not stated

SC - subject company (the company inquired by you)

NA - not available

CNY - China Yuan Ren Min Bi

SC was registered as a wholly foreign owned enterprise at local Administration for Industry & Commerce (AIC - The official body of issuing and renewing business license) on Feb. 8, 2007.

Company Status: Wholly foreign-owned enterprise

This form of business in PR China is defined as a legal person. It is a limited co. established within the territories of PR China with capital provided totally by the foreign investors. More than one foreign investor may jointly invest in a wholly foreign-owned enterprise. The investing party/parties solely exercise management, reap profit and bear risks and liabilities by themselves. This form of companies usually have a limited duration is extendible upon approval of Examination and Approval Authorities.

SC’s registered business scope includes wholesaling, retailing importing and exporting garments, fashion, shoes, hats, cases and sports products; providing related supporting business.

SC is mainly engaged in selling garments.

Mr. Ryan Kirk Smith has been the legal representative and chairman of SC since 2011.

SC is known to have approx. 380 employees at present, including the ones of its branches.

SC is currently operating at the above stated address, and this address houses its operating office in the commercial zone of Shenzhen. Our checks reveal that SC rents the total premise about 300 square meters.

SC is not known to host website of its own at present.

Changes of its registered information are as follows:

Date of change	Item	Before the change	After the change
2008-5-16	Registration No.	320926	Present one
2008-12-26	Registered capital	CNY 4,000,000	Present amount
2011-4-18	Legal representative	David Lee Reklau	Present one

MAIN SHAREHOLDERS:

Name % of Shareholding

VF Investments SARL (Luxembourg) 100

l Legal representative and Chairman:

Mr. Ryan Kirk Smith, American, he is currently responsible for the overall management of SC.

Working Experience(s):

From 2011 to present Working in SC as legal representative and chairman

l General Manager:

Ms. Chen Juny is currently responsible for the daily management of SC.

Working Experience(s):

At present Working in SC as general manager

Directors:

…………..

Patrick Joseph Guido

Robert Marcel Wolff

Supervisor:

…………..

Liang Wanya

SC is mainly engaged in selling garments.

SC’s products mainly include: denim casual wear, outdoor sports clothing, work clothes, knitwear, children's clothing, backpack and swimsuit, etc.

Main brand: “The North Face”.

SC sources its materials 30% from domestic market, and 70% from the overseas market, mainly USA. SC sells 100% of its products in domestic market.

The buying terms of SC include Check, T/T, L/C and Credit of 30-60 days. The payment terms of SC include Check, T/T and Credit of 30-60 days.

Note: SC’s management declined to release its major clients and suppliers.

SC is known to have the following branches:

Beijing Branch

===========

Add: Room 708 North Building, Zhuangsheng Square, No. 6 Xuanwumen Wai Street, Xuanwu District, Beijing

Tel: 86 10-63107198

Guangzhou Branch

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

Add: Unit 2203 No. 236 Zhongshan 6 Road, Yuexiu District, Guangzhou

Tel: 86 20-81133100

Shanghai Branch

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

Add: 11/F, Donghai Square, No. 299 Tongren Road, Shanghai

Tel: 86 21-61705600

Etc.

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 refused to release any information of its suppliers and the trade reference was not available.

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.

China Merchants Bank Shenzhen Branch

AC#：8139232383231210001

Relationship: Normal.

Financial Summary

Unit: CNY’000

	as of Dec. 31, 2009	as of Dec. 31, 2010
Total Liabilities	171,920	314,610
Shareholders equities	70,500	162,320
Total Assets	242,420	476,930

Turnover	408,370	639,540
Profit before tax	54,560	120,210
Less: profit tax	12,360	28,390
Net profit	42,200	91,820

Note: we did not find SC’s detailed financial reports for Yr2009 & Yr2010.

Important Ratios

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

	as of Dec. 31, 2009	as of Dec. 31, 2010
*Liabilities to assets	0.71	0.66
*Net profit margin (%)	10.33	14.36
*Return on total assets (%)	17.41	19.25
*Turnover/Total assets	1.68	1.34

PROFITABILITY: FAIRLY GOOD

l The turnover of SC appears fairly good in its line, and it increased in 2010.

l SC’s net profit margin is fairly good in both years.

l SC’s return on total assets is good in both years.

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

LEVERAGE: AVERAGE

l The debt ratio of SC is average.

l The risk for SC to go bankrupt is low.

Overall financial condition of the SC: Stable.

SC is considered medium-sized in its line with stable financial conditions. A credit line up to USD 1,000,000 would appear to be within SC’s capacities

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.50.92
UK Pound	1	Rs.81.21
Euro	1	Rs.67.85

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.