MIRA INFORM REPORT

Report Date :

25.02.2013

IDENTIFICATION DETAILS

Name :	SUNRISE (SHENGZHOU) TEXTILES CO., LTD.

Registered Office :	No. 69, Jiajia Road, East Economy Development Area, Shengzhou, Zhejiang Province, 312400 Pr

Country :	China

Financials (as on) :	30.06.2012

Date of Incorporation :	25.05.2007

Com. Reg. No.:	330600400002357

Legal Form :	Chinese-Foreign Equity Joint Venture Enterprise

Line of Business :	Engaged in weaving, dyeing, finishing and processing of high-grade fabric; manufacturing, processing and selling clothing.

No. of Employees :	500

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)

China

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

CHINA - ECONOMIC OVERVIEW

Since the late 1970s China has moved from a closed, centrally planned system to a more market-oriented one that plays a major global role - in 2010 China became the world's largest exporter. Reforms began with the phasing out of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, creation of a diversified banking system, development of stock markets, rapid growth of the private sector, and opening to foreign trade and investment. China has implemented reforms in a gradualist fashion. In recent years, China has renewed its support for state-owned enterprises in sectors it considers important to "economic security," explicitly looking to foster globally competitive national champions. After keeping its currency tightly linked to the US dollar for years, in July 2005 China revalued its currency by 2.1% against the US dollar and moved to an exchange rate system that references a basket of currencies. From mid 2005 to late 2008 cumulative appreciation of the renminbi against the US dollar was more than 20%, but the exchange rate remained virtually pegged to the dollar from the onset of the global financial crisis until June 2010, when Beijing allowed resumption of a gradual appreciation. The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, China in 2010 stood as the second-largest economy in the world after the US, having surpassed Japan in 2001. The dollar values of China's agricultural and industrial output each exceed those of the US; China is second to the US in the value of services it produces. Still, per capita income is below the world average. The Chinese government faces numerous economic challenges, including: (a) reducing its high domestic savings rate and correspondingly low domestic demand; (b) sustaining adequate job growth for tens of millions of migrants and new entrants to the work force; (c) reducing corruption and other economic crimes; and (d) containing environmental damage and social strife related to the economy's rapid transformation. Economic development has progressed further in coastal provinces than in the interior, and by 2011 more than 250 million migrant workers and their dependents had relocated to urban areas to find work. One consequence of population control policy is that China is now one of the most rapidly aging countries in the world. Deterioration in the environment - notably air pollution, soil erosion, and the steady fall of the water table, especially in the North - is another long-term problem. China continues to lose arable land because of erosion and economic development. The Chinese government is seeking to add energy production capacity from sources other than coal and oil, focusing on nuclear and alternative energy development. In 2010-11, China faced high inflation resulting largely from its credit-fueled stimulus program. Some tightening measures appear to have controlled inflation, but GDP growth consequently slowed to near 9% for 2011. An economic slowdown in Europe is expected to further drag Chinese growth in 2012. Debt overhang from the stimulus program, particularly among local governments, and a property price bubble challenge policy makers currently. The government's 12th Five-Year Plan, adopted in March 2011, emphasizes continued economic reforms and the need to increase domestic consumption in order to make the economy less dependent on exports in the future. However, China has made only marginal progress toward these rebalancing goals.

Source : CIA

Company name and address

SUNRISE (SHENGZHOU) TEXTILES CO., LTD.

NO. 69, JIAJIA ROAD, EAST ECONOMY DEVELOPMENT AREA, SHENGZHOU, ZHEJIANG PROVINCE, 312400 PR CHINA

TEL: 86 (0) 575-83276002 FAX: 86 (0) 575-83276002

EXECUTIVE SUMMARY

INCORPORATION DATE : MAY 25, 2007

REGISTRATION NO. : 330600400002357

REGISTERED LEGAL FORM : CHINESE-FOREIGN EQUITY JOINT VENTURE ENTERPRISE

CHIEF EXECUTIVE : MR. XU LEI (CHAIRMAN)

STAFF STRENGTH : 500

REGISTERED CAPITAL : USD 57,694,444

BUSINESS LINE : MANUFACTURING, PROCESSING & TRADING

TURNOVER : CNY 1,850,155,000 (JAN. 1 TO JUN. 30, 2012)

EQUITIES : CNY 775,563,000 (AS OF JUN. 30, 2012)

PAYMENT : AVERAGE

MARKET CONDITION : COMPETITIVE

FINANCIAL CONDITION : FAIRLY STABLE

OPERATIONAL TREND : FAIRLY STEADY

GENERAL REPUTATION : AVERAGE

EXCHANGE RATE : CNY 6.2344 = USD 1

Adopted abbreviations:

ANS - amount not stated

NS - not stated

SC - subject company (the company inquired by you)

NA - not available

CNY - China Yuan RenMinBi

Note: SC is also known as Shengzhou Shengtai Colour Weaving Science and Technology Co., Ltd.

SC was registered as a Chinese-foreign equity joint venture enterprise at local Administration for Industry & Commerce (AIC-The official body of issuing and renewing business license) on May 25, 2007.

Company Status: Chinese-foreign equity joint venture enterprise

This form of business in PR China is defined as a legal person. It is a limited co. jointly invested by one or more foreign companies and one or more PR China controlled companies within the territories of PR China according to a certain proportion of capital investment. The investing parties exercise business management, share profits and bear all risks and liabilities of the co. together. The equity joint venture law requires that foreign party contribute not less than 25% of the registered capital, with no maximum. The investing parties are free to agree on method of profit distribution and liabilities bearing according to the proportion of capital investment. Each investing parties contributes funds, tangible assets, technology & etc. The board of directors excises the high authority. The joint venture usually has a limited duration of 10 to 50 years. Enterprise with large investment, long construction periods, low investment returns, introducing of advanced technology & advanced technology products that have good competition position in international market may extend beyond the 50 years limit.

SC’s registered business scope includes weaving, dyeing & finishing and processing of high-grade fabric; manufacturing and processing clothing; and selling self-made products.

SC is mainly engaged in weaving, dyeing, finishing and processing of high-grade fabric; manufacturing, processing and selling clothing.

Mr. Xu Lei has been legal representative, chairman and general manager of SC since 2012.

SC is known to have approx. 500 employees at present.

SC is currently operating at the above stated address, and this address houses its operating office and factory in the economic development zone of Shengzhou. Detailed premise information is not available at present.

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

Changes of its registered information:

Date of change	Item	Before the change	After the change
2012	Legal representative	Li Rucheng	Present one
Unknown	Registered capital	USD 22,000,000	Present amount

MAIN SHAREHOLDERS:

Name % of Shareholding

Youngor Group Co., Ltd. 26.00

Suntex Hong Kong Limited 8.67

Beijing Aerospace Industry Investment Fund (Limited Partnership) 10.00

Itochu Textile Prominent (Asia) Limited (Hong Kong) 25.00

Ningbo Shengtai Textiles Plant (in Chinese pinyin) 30.33

Youngor Group Co., Ltd.

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

Youngor Group Company Limited listed in Shanghai Stock Exchange Market with the stock code 600177.

The Youngor Group was founded in 1979. Over the three decades’ development, the Group established businesses in sectors including property development and equity investment, in addition to its core business of branded garment manufacturing and marketing.

Garment manufacturing and marketing is the core business of the Youngor Group. After 30 years’ development, the Group has become a vertically integrated business in textile and garment manufacturing.

Registration No.: 330200000007255

Legal representative: Li Rucheng

Registered capital: CNY 2,226,611,695

Add: No. 2 West Section Yinxian Road, Yinzhou District, Ningbo, Zhejiang Province 浙江省宁波市鄞州区鄞县大道西段2号

Tel: 0574-87425136

Fax: 0574-87425390

http://www.youngor.com/

Ningbo Shengtai Textiles Plant (in Chinese pinyin)

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

Registration no.: 330212000012317

Registered capital: CNY 112,951,600

Legal representative: Xu Lei

Itochu Textile Prominent (Asia) Limited (Hong Kong)

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

Registration no.: 0120890

Legal form: private

l Legal representative, chairman and general manager:

Mr. Xu Lei , born in 1968 with MBA degree, he is currently responsible for the overall management of SC.

Working Experience(s):

From 2012 to present Working in SC as legal representative, chairman and general manager.

Also working in Ningbo Shengtai Textiles Plant (in Chinese pinyin), Sunrise (Shengzhou) Knits Co., Ltd., Smart Shirts Garments Manufacturing (Ningbo) Co., Ltd., etc. as legal representative.

l Directors:

Xu Zhe

Zou Xingbing

Xu Zhiwu

Xu Qigang

Yu Lida

Zhang Feimeng

Ye Jianzeng

l Supervisors:

Wang Mengwei

Ding Kaizheng

SC is mainly engaged in weaving, dyeing, finishing and processing of high-grade fabric; manufacturing, processing and selling clothing.

SC’s products mainly include: fabric, garments, etc.

SC sources its materials 100% from domestic market. SC sells its products 70% in domestic market, and 30% to overseas market.

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

Note: SC’s management refused to release its main suppliers and clients.

Sunrise (Shengzhou) Knits Co., Ltd.

Smart Shirts Garments Manufacturing (Ningbo) Co., Ltd.

Ningbo Youngor Sunrise Textile Dyeing & Finishing Co., Ltd.

Ningbo Youngor Garments Co., Ltd.

Ningbo Youngor Shirts Co., Ltd.

Ningbo Youngor Worsted Spinning, Weaving & Dyeing Co., Ltd.

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 did not provide any name of trade/service suppliers and we have no other sources to conduct the enquiry at present.

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.

SC declined to release its banking details.

Financial Summary

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

Unit: CNY’000

	As of Dec. 31, 2011	As of Jun. 30, 2012
Total liabilities	1,843,855	2,167,241
Equities	857,524	775,563
	--------------	--------------
Total assets	2,701,379	2,942,804
	=========	=========
Turnover	2,297,972	1,850,155
Profits	220,856	-41,826

Note: we did not find SC’s detailed financial reports.

Important Ratios

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

	As of Dec. 31, 2011	As of Jun. 30, 2012
*Liabilities to assets	0.68	0.74
*Net profit margin (%)	9.61	-2.26
*Return on total assets (%)	8.18	-1.42
*Turnover/Total assets	0.85	0.63

PROFITABILITY: FAIR

l The turnover of SC appears good in its line.

l SC’s net profit margin appears fairly good in 2011, but fair in the first half of 2012.

l SC’s return on total assets appears fairly good in 2011, but fair in the first half of 2012.

l SC’s turnover is in a fair level, 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 average.

Overall financial condition of the SC: Fairly stable

SC is considered medium-sized in its line with fairly stable financial conditions.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.54.43
UK Pound	1	Rs.83.20
Euro	1	Rs.71.91

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%)

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.