MIRA INFORM REPORT

Report Date :

01.11.2012

IDENTIFICATION DETAILS

Name :	PROTECTIVE INDUSTRIAL PRODUCTS MANUFACTORY LTD.

Registered Office :	Flats 8-11, 6/F., Kar Wah Industrial Building, 8 Leung Yip Street, Yuen Long, New Territories,

Country :	Hong Kong

Date of Incorporation :	14.04.1978

Com. Reg. No.:	05570030

Legal Form :	Private Limited Company

Line of Business :	Manufacturer, Importer and Exporter of all kinds of protective gloves, labour gloves and other industrial safety products such as aprons, rainwear, PE and PVC shoes covers, gloves, cotton gloves, leather gloves, nylon gloves, PVC gloves, goggles, masks, respirators, garden gloves, light reflecting clothes, etc.

No. of Employees :	22 employees

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 :	Good
Payment Behaviour :	No Complaints
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 – June 30^th, 2012

Country Name

Previous Rating

(31.03.2012)

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

PROTECTIVE INDUSTRIAL PRODUCTS MANUFACTORY LTD.

Company ADDRESS

Flats 8-11, 6/F., Kar Wah Industrial Building, 8 Leung Yip Street, Yuen Long, New Territories, Hong Kong.

PHONE: 2475 9228, 2477 8472

FAX: 2478 9868, 2475 8849

E-MAIL: ptao@piphkg.com.hk

grace@piphkg.com.hk

MANAGEMENT

Managing Director: Mr. Tao Ket Chan, Wellson

SUMMARY

Incorporated on: 14th April, 1978.

Organization: Private Limited Company.

Capital: Nominal: HK$1,000,000.00

Issued: HK$1,000,000.00

Business Category: Protective Glove Trader and Manufacturer.

Employees: 22.

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

Banking Relation: Good.

Company ADDRESS

Registered Head Office:-

Flats 8-11, 6/F., Kar Wah Industrial Building, 8 Leung Yip Street, Yuen Long, New Territories, Hong Kong.

Associated/Affiliated Companies:-

· Emery Enterprises Ltd., Hong Kong.

McHenry Manufacturing Inc., USA.

PIP Balkans SA, Greece.

PIP Europe S.r.l., Italy.

PIP Iberica S.L., Spain.

PIP Mexico-Productos Industriales de Proteccion S.A. de C.V., Mexico.

PPE Global Sourcing (Shanghai) Ltd., China.

PR Industries Inc., USA.

Protective Industrial Products (Australia) Pty. Ltd., Australia.

Protective Industrial Products (Latin America) S.A., Panama.

Protective Industrial Products Inc., USA.

Protective Industrial Products Worldwide Ltd., Hong Kong.

Well Gain Fine Chemicals Co. Ltd., Hong Kong.

Wellson Enterprises Ltd., Hong Kong.

BUSINESS REGISTRATION NUMBER

05570030

COMPANY FILE NUMBER

0059512

MANAGEMENT

Managing Director: Mr. Tao Ket Chan, Wellson

Director & Sales Contact: Ms. Tao Jun Ping, Grace

CAPITAL

Nominal Share Capital: HK$1,000,000.00 (Divided into 10,000 shares of HK$100.00 each)

Issued Share Capital: HK$1,000,000.00

SHAREHOLDERS

(As per registry dated 14-04-2012)

Name		No. of shares
TAO Ket Chan, Wellson		2,500
TAO TANG Yuen Yee		2,500
TAO Jun Yan, Amy		1,250
TAO Jun Ping, Grace		1,250
TAO Jun Hau, Junior		1,250
TAO Jun Hwa, Paul		1,250
		––––––
	Total:	10,000 =====

DIRECTORS

(As per registry dated 14-04-2012)

Name (Nationality)	Address
TAO Jun Hau, Junior	House 7, Ping Shan Garden, D.D. 122, Lot 1705, Yuen Long, New Territories, Hong Kong.
TAO Jun Hwa, Paul	House 7, Ping Shan Garden, D.D. 122, Lot 1705, Yuen Long, New Territories, Hong Kong.
TAO Ket Chan, Wellson	House 7, Ping Shan Garden, D.D. 122, Lot 1705, Yuen Long, New Territories, Hong Kong.
TAO Jun Yan, Amy	House 7, Ping Shan Garden, D.D. 122, Lot 1705, Yuen Long, New Territories, Hong Kong.

SECRETARY

(As per registry dated 14-04-2012)

Name	Address	Co. No.
Busiaid Management Services Ltd.	Room 401-402, 4/F., Tung Ming Building, 40-42 Des Voeux Road Central, Hong Kong.	0033062

HISTORY

The subject was incorporated on 14th April, 1978 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: Manufacturer, Importer and Exporter.

Lines: All kinds of protective gloves, labour gloves and other industrial safety products such as aprons,

rainwear, PE and PVC shoes covers, gloves, cotton gloves, leather gloves, nylon gloves, PVC gloves, goggles, masks, respirators, garden gloves, light reflecting clothes, etc.

Employees: 22.

Raw Materials: Imported from European countries and finished products from China.

Markets: US, Canada, Europe, China, Japan, South Korea, Taiwan, Mexico and other Southeast Asian countries.

Terms/Sales: L/C, T/T and D/P.

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

FINANCIAL INFORMATION

Nominal Share Capital: HK$1,000,000.00 (Divided into 10,000 shares of HK$100.00 each)

Issued Share Capital: HK$1,000,000.00

Mortgage or Charge (since 1992): (See attachment)

Profit or Loss: Making a small profit every year.

Condition: Keeping in a satisfactory manner.

Facilities: Making active use of general banking facilities.

Payment: Met as contracted.

Commercial Morality: Satisfactory.

Bankers:-

· Bank of China (Hong Kong) Ltd., Hong Kong.

Citibank, N.A., Hong Kong.

Standing: Very Good.

GENERAL

Protective Industrial Products Manufactory Ltd. [PIPM] was incorporated in April 1978 as a private limited company wholly-owned by the members of the Tao family. Set up by a couple Mr. Wellson Tao Ket Chan and Mrs. Tao Tang Yuen Yee with an issued share capital of HK$1,000,000.00, PIPM is now under the management of their sons and daughters.

PIPM is a gloves trader. It carries all kinds of protective gloves and labour gloves. Products are principally manufactured by its affiliated manufacturers in Guangdong Province, China. Finished products are exported to the United States, Mexico, Canada, Europe and Southeast Asia. PIPM is responsible for supplying its affiliated factories in China with raw materials which are mainly imported from Europe.

The operating office of PIPM is also the Asia headquarters of the PIP Group.

Before 1994, PIPM had got quotas in garments allocated by the Hong Kong Government in exporting its products to the United States and Europe. At the end of 2001, as China joined in the World Trade Organization [WTO] and the US and European Union trade quota restrictions were abolished by 2005.

PIPM has been one of the significant glove traders in Hong Kong. Its associated company in the United States is Protective Industrial Products Inc. [PIP].

PIP is jointly owned by Joe Milot, PIP’s president, and Wellson Tao, his partner. Since 1984, PIP has operated as a supplier of work gloves which are distributed throughout the United States. In recent years, operations in Mexico, Australia, China and Panama have been developed to meet the needs of those countries. On 1st October, 2008 saw the inception of PIP Europe based Rome, Italy. This firm is also a glove distributor.

PIP is the exclusive supplier of “Marigold®” industrial gloves in the United States and Mexico. PIP is a supplier of gloves to industrial distributors throughout the United States. Over the years, PIP has grown from a specialist in inspection gloves to a full line provider of work gloves. PIP is now one of the leading companies supplying work gloves to industrial distributors nationally.

PIP is owned equally by its two shareholders, Mr. Joseph Milot and Mr. Wellson Tao. Mr. Milot is President of PIP and Mr. Tao is Managing Director and the largest shareholder of PIPM. Mr. Milot and Mr. Tao formed PIP in 1984. Over the years, PIP has grown from a specialist in inspection gloves to a provider of a full line of work gloves.

Now, PIP and PIPM are marketing the following gloves:-

New Styles

· Tomorrow’s Hand Protection Today.

Unsupported Liquid Proof Gloves

· General Purpose Unsupported Latex by “Marigold®”;

· Heavy Weight Unsupported Latex by “Marigold®”;

· Unsupported Chemical Resistant Gloves by “Marigold®”; &

· Unsupported Chemical Resistant Gloves by “TOWA®”.

Coated Gloves

· “Nitrotough™” Series Premium Nitrile Dipped;

· “ArmorCoat™” Series Nitrile Coated;

· “ActivGrip™” Coated Gloves by “TOWA®”;

· PVC Coated Gloves on Seamless Liner by “TOWA®”;

· “ProCoat™” PVC Coated Gloves;

· General Purpose Coated Gloves;

· “Excalibur™” Cut and Sewn Nitrile; &

· Latex Rubber and Neoprene Coated Gloves.

Disposable Gloves

· “Ambidex™” Disposable Vinyl Gloves;

· “Ambidex™” Disposable Nitrile, Latex and Synthetic Gloves.

Cut Resistant Gloves

· Cut Resistant Gloves and Sleeves.

String Knit Gloves

· Coated String Knit Gloves;

· Specialty Coated String Knit Gloves; &

· String Knit Gloves.

Leather Gloves

· Cowhide Drivers Gloves;

· Pigskin and Goatskin Gloves;

· Insulated Cowhide and Pigskin Drivers;

· Insulated Work Gloves;

· Leather Palms; &

· Welders and Foundry Gloves.

Ergonomic Gloves

· Maximum “Safety™” Mechanics’ and Anti-Vibration Gloves.

Cotton Gloves

· Cotton Canvas Gloves;

· Cotton Jersey and Terry Cloth Gloves.

Critical Environment Gloves

· “CleanTeam™” Cotton Inspection Gloves;

· “CleanTeam™” Low Lint Inspection Gloves;

· “CleanTeam™” Parts Handler Gloves; &

· “CleanTeam™” Critical Environment Gloves.

Parade Gloves

· “Cabaret™” Parade Gloves.

Besides gloves, PIPM also trades in the following products:-

· Protective clothing (Hi-Visi Clothing);

· Apron (Industrial) (leather included);

· Industrial rainwear;

· Shoe cover ‑ PE and PVC;

· Work gloves, gloves ‑ Industrial, Cotton;

· Gloves ‑ Industrial, Leather;

· Gloves ‑ Industrial , Nylon;

· Gloves ‑ Industrial, PVC;

· Goggles ‑ Industrial;

· Mask and Respirator ‑ Industrial;

· Gloves ‑ Garden, Transport Equipment;

· Others (Floor jack, chain block);

· Garage Equipment (Car jack);

· Industrial Chemicals (Fine chemicals); &

· Dyeing, tanning and colouring materials (Pearlescent pigments from the United States).

Now, PIPM has set up an associated company PPE Global Sourcing (Shanghai) Ltd. in Shanghai, China. This firm is responsible for sourcing all kinds of productive products in China and exports to the United States and Europe.

In March 2012, PIP Group was appointed as the newest DuPont licensee of DuPont™ Kevlar® fiber for use in gloves, sleeves and garments. Lightweight, cut resistant and durable, Kevlar® provides workers superior protection from cuts and career-ending accidents. PIP has two manufacturing facilities in the United States that produce gloves, sleeves, and garments made with Kevlar®.

In May 2012, PIP Group entered into an agreement to acquire the assets of Integrated Sourcing and Supply Innovators (ISSI), LLC., a company started in 2004 by Tim Swift and his partner. Mr. Swift will join forces with PIP to help bolster its position as the leading supplier of goggles and tight-fitting eyewear in the industry.

The business of PIPM is active and satisfactory. History in Hong Kong is over thirty-four years.

The annual sales turnover of PIPM is very significant.

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

REMARKS:

Court case:-

Action Date	Case No.	Plaintiff	Defendant	Cause	Amount
05-02-1993	S35529	Housing Management Agency Ltd.	Protective Industrial Products Manufactory Ltd.	Management Fee	Not stated
07-07-1993	S35531	Housing Management Agency Ltd.	Protective Industrial Products Manufactory Ltd.	Management Fee	Not stated

Property information of the company:-

1. Property Location: Unit 6 & 7 on 4/F., Unit 1-11 on 6/F. and Car Parking Space No. P7 & P8 on G/F., Kar Wah Industrial Building, 8 Leung Yip Street, Yuen Long, New Territories, Hong Kong.

Owner: Protective Industrial Products Manufactory Ltd.

Date of Purchase: n.a.

Purchased Price: n.a.

Incumbrances:-

Date of Mortgage	Amount Consideration	Mortgagee	Nature
16-09-1994	-	The Kwangtung Provincial Bank, Hong Kong Branch. [Merged into Bank of China (Hong Kong) Ltd.]	Collateral and further charge (jointly with Tao Tang Yuen Yee and Tao Jun Hau, Junior)

2. Property Location: Unit 17, 18 & 19 on 6/F., Kar Wah Industrial Building,
8 Leung Yip Street, Yuen Long, New Territories, Hong Kong.

Owner: Protective Industrial Products Manufactory Ltd.

Date of Purchase: n.a.

Purchased Price: n.a.

Incumbrances:-

Date of Mortgage	Amount Consideration	Mortgagee	Nature
18-06-2010	-	Bank of China (Hong Kong) Ltd., Hong Kong.	Mortgage to secure general banking facilities

3. Property Location: House 7 including Garage on Lower G/F., Turfing Garden, Terrace on G/F. & Roof immediately thereover 1/F., Ping Shan Gardens, Yuen Long, New Territories, Hong Kong.

Owner: Protective Industrial Products Manufactory Ltd.

Date of Purchase: 05-05-1989

Purchased Price: HK$2,000,000

Incumbrances:-

Date of Mortgage	Amount Consideration	Mortgagee	Nature
05-05-1989	-	Overseas Trust Bank Ltd., Hong Kong. [Merged into DBS Bank (Hong Kong) Ltd.]	Mortgage to secure general banking facilities

MORTGAGE OR CHARGE

(Since 1992)

Date	Particulars	Amount
16-09-1994	Instrument: Collateral and Further Charge (Jointly with Tao Tang Yuen Yee and Tao Jun Hau, Junior) Property: 1) 12,879/200,000th parts or shares of and in Yuen Long Town Lot No. 356 (Unit 6 & 7 on 4/F., Unit 1-11 on 6/F. and Car Parking Space No. P7 & P8 on G/F. of Kar Wah Industrial Building, 8 Leung Yip Street, Yuen Long, New Territories, Hong Kong.) 2) 3,107/200,000th parts or shares of and in Yuen Long Town Lot No. 356 (Unit 1 & 2 on 8/F. and Portions of Main Roof of Kar Wah Industrial Building, 8 Leung Yip Street, Yuen Long, New Territories, Hong Kong.) [Released on 07-06-2010] Mortgagee: The Kwangtung Provincial Bank, Hong Kong Branch. [Merged into Bank of China (Hong Kong) Ltd.]	To secure banking facilities
12-01-2010	Instrument: Deposit Deed Property: By way of a first fixed charge and as a continuing security for the Obligations, the Company charges and assigns absolutely all its rights, title to and interest in the Accounts and all Deposits from time to time in the Accounts Mortgagee: Citibank N.A., Hong Kong Branch.	All moneys
18-06-2010	Instrument: Mortgage Property: 2,745/200,000th parts or shares of and in Yuen Long Town Lot No. 356 (Unit 17, 18 & 19 on 6/F. of Kar Wah Industrial Building, 8 Leung Yip Street, Yuen Long, New Territories, Hong Kong.) Mortgagee: Bank of China (Hong Kong) Ltd., Hong Kong.	General banking facilities to the extent of all sums of money and interest thereon
03-04-2012	Instrument: Trade Finance Security Assignment Property: The Borrows as beneficial owner:- (A) assigns and agrees to assign absolutely to the Bank all the present and future rights, title, interests and benefits of the Borrower in and to the following assets: 1) Export Credit; 2) Export Collection Bills; 3) Sales Contracts; 4) Invoice Receivables; 5) Insurances; 6) Trade Documents; and 7) All claims, remedies and proceeds in connection with any of the foregoing; and (B) Charges and agrees to charge to the Bank by way of first fixed charge all the present and future right, title, interests and benefits of the Borrower in and to the following assets:- 1) The Goods together with their proceeds; and 2) The Deposit; and (C) Pledges and agrees to pledge to the Bank the Pledged Goods and the Trade Documents which are now or may in the future be in the Bank’s possession Mortgagee: CITIC Bank International Ltd., Hong Kong.	As security for the payment of all secured liabilities
03-04-2012	Instrument: Charge on Cash Deposit(s) Property: The Chargor, as beneficial owner, charges and agrees to charge to the Bank by way of first fixed charge:- (a) The Chargor’s entire right, title and interest (both presend and future) in and to the Deposit; and (b) All rights and benefits accruing to or arising in connection with the Deposit Mortgagee: CITIC Bank International Ltd., Hong Kong.	As a continuing security for the secured liabilities
27-07-2012	Instrument: Charge on Cash Deposit(s) to secure Liabilities of the Depositor(s) Property: 1) By way of first fixed charge and agreement to charge:- The Deposit and all right, title and interest of the Company whatsoever, present and future, thereto and therein, together with any certificates of deposit or other instruments or securities evidencing title, or otherwise relating, thereto and any account to which the same is credited 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.54.12
UK Pound	1	Rs.87.08
Euro	1	Rs.70.15

INFORMATION DETAILS

Report Prepared by :

MNL

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.