MIRA INFORM REPORT

Report Date :

19.06.2013

IDENTIFICATION DETAILS

Name :	BESTSELLER FASHION GROUP (TIANJIN) CO., LTD.
Registered Office :	Economic Development Zone, Wuqing District, Tianjin City 301700 Pr China
Country :	China
Financials (as on) :	31.12.2012
Date of Incorporation :	28.02.1997
Com. Reg. No.:	120000400028652
Legal Form :	Wholly Foreign-Owned Enterprise
Line of Business :	manufacturing and selling of garments
No. of Employees :	3,500 (Including Branches)

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
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

Status :	Good
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 – March 31^st 2013

Country Name	Previous Rating (31.12.2012)	Current Rating (31.03.2013)
China	A2	A2

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 2012 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 under 8% for 2012. An economic slowdown in Europe contributed to China's, and is expected to further drag Chinese growth in 2013. 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 & address

BestSeller Fashion Group (Tianjin) Co., Ltd.

ECONOMIC DEVELOPMENT ZONE, WUQING DISTRICT,

TIANJIN CITY 301700 PR CHINA

TEL: 86 (0) 22-59693318 FAX: 86 (0) 22-59693339

EXECUTIVE SUMMARY

INCORPORATION DATE : FEB. 28, 1997

REGISTRATION NO. : 120000400028652

REGISTERED LEGAL FORM : WHOLLY FOREIGN-OWNED ENTERPRISE

CHIEF EXECUTIVE : MR. WANG PEIDE (CHAIRMAN)

STAFF STRENGTH : 3,500 (INCLUDING BRANCHES)

REGISTERED CAPITAL : USD 81,800,000

BUSINESS LINE : MANUFACTURING

TURNOVER : CNY 13,993,850,000 (AS OF DEC. 31, 2012)

EQUITIES : CNY 873,210,000 (AS OF DEC. 31, 2012)

PAYMENT : AVERAGE

MARKET CONDITION : COMPETITIVE

FINANCIAL CONDITION : STRONG

OPERATIONAL TREND : STEADY

GENERAL REPUTATION : WELL-KNOWN

EXCHANGE RATE : CNY 6.13 = 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 Ren Min Bi

Note: SC’s correct name should be the heading one, instead of the given one “Besteller Fashion Group (Tianjin) Co., Ltd.”

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. 28, 1997.

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 manufacturing, processing and selling garments, handbags, shoes, hats, leather belts, glasses, bracelets, necklaces, earrings, watches, display models, decorative materials, furniture, kitchen and bathroom appliances, and groceries, cosmetics and hygiene products, office supplies, sporting goods, jewelry, handicrafts, hardware, electrical products, electronic products, communications equipment, computers and software, and ancillary equipment and wholesale, retail, import and export and related ancillary businesses of their own brand-related products (above quota license management, special regulation management should in accordance with relevant regulations). (with permit if needed).

SC is mainly engaged in manufacturing and selling garments.

Mr. Wang Peide is legal representative and chairman of SC at present.

SC is known to have approx. 3,500 employees at present, including the ones in its branches.

SC is currently operating at the above stated address, and this address houses its operating office and factory in the development zone of Tianjin. The detailed information of the area is unspecified.

SC’s head office is located in “15/F, Tower D, The Place Boulevard, No. 9, Guanghua Road, Chaoyang District, Beijing”

Tel: 010-65873388

Fax: 010-65873100

http://www.bestseller.com.cn/ The design is professional and the content is well organized. At present it is in Chinese version.

E-mail: bestseller@bestseller.com.cn

SC’s former registration no. was 010749.

See below for SC as executive party (defendant).

Executed Party	SC
Court	Guangzhou City Huadu District People's Court
Date of Case	2008-11-06
Case Number	(2008) 02791
Claim Amount	RMB 9,769,558
Case Status	Completed

Executed Party	SC
Court	Tianjin City Wuqing District People's Court
Date of Case	2008-05-12
Case Number	(2008) 00973
Claim Amount	RMB 2,543,141.5
Case Status	Completed

Remark: Due to the lack of information, we are unable to provide the cause of action, judgment or other information.

MAIN SHAREHOLDERS:

Name % of Shareholding

(Hong Kong) Bestseller Fashion Group China Limited 100

CR No.: 0591514

Date of Incorporation: 17-JAN-1997

Company Status: Private

Active Status: Live

Legal Representative and Chairman:

Mr. Wang Peide, English name: Warburg Allan, with university education. He is currently responsible for the overall management of SC.

Working Experience(s):

At present Working in SC as chairman and legal representative.

Also working in Bestseller Fashion Group (Tianjin) Co., Ltd. Baodi Branch, Bestseller Fashion Group (Tianjin) Co., Ltd. Baodi Second Branch, Bestseller Fashion Group (Tianjin) Co., Ltd. Binhai High-tech Zone Branch, Bestseller Fashion Group (Tianjin) Co., Ltd. Binhai New Zone Branch, Bestseller Fashion Group (Tianjin) Co., Ltd. Shenzhen Branch and etc. as principal.

SC is mainly engaged in manufacturing and selling garments.

SC’s products mainly include: various kinds of garments, handbags, shoes, hats, leather belts, glasses, bracelets, necklaces, earrings, and watches, etc.

Brands: ONLY, JACK & JONES, VERO MODA, SELECTED

SC sources its materials 80% from domestic market, and 20% from overseas market. SC sells 80% of its products in domestic market, and 20% to overseas 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, L/C and Credit of 30-60 days.

Note: SC refused to release its major customers and suppliers.

SC has many branches, sales departments and offices in Beijing, Shanghai, Hangzhou, Shenzhen, Guangzhou, Chengdu, Chongqing, Dalian, and the following are the major ones:

· Bestseller Fashion Group (Tianjin) Co., Ltd. Baodi Branch

· Bestseller Fashion Group (Tianjin) Co., Ltd. Baodi Second Branch

· Bestseller Fashion Group (Tianjin) Co., Ltd. Binhai High-tech Zone Branch

· Bestseller Fashion Group (Tianjin) Co., Ltd. Binhai New Zone Branch

· Bestseller Fashion Group (Tianjin) Co., Ltd. Tongzhou Sales Department

· Bestseller Fashion Group (Tianjin) Co., Ltd. Beijing Changping Beiqing Road Sales Department

· Bestseller Fashion Group (Tianjin) Co., Ltd. Beijing Changping Sales Department

· Bestseller Fashion Group (Tianjin) Co., Ltd. Beijing Chaoyang North Road Sales Department

· Bestseller Fashion Group (Tianjin) Co., Ltd. Shanghai Baoshan Sales Department

· Bestseller Fashion Group (Tianjin) Co., Ltd. Shanghai Changning Sales Department

· Bestseller Fashion Group (Tianjin) Co., Ltd. Beijing Chaoyang Park Road Sales Department

· Bestseller Fashion Group (Tianjin) Co., Ltd. Beijing Chaoyang Jiuxianqiao Branch

· Bestseller Fashion Group (Tianjin) Co., Ltd. Shenzhen Branch

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 bank details.

Financial Summary

Unit: CNY’000

	As of Dec. 31, 2011	As of Dec. 31, 2012
Total liabilities	169,730	239,190
Equities	654,060	873,210
	--------------------	--------------------
Total assets	823,790	1,112,400
	=============	=============
Turnover	11,679,850	13,993,850
Profit before tax	401,030	361,610
Profits	372,990	345,470

Note: SC’s management refused to release the detailed financial reports for Yr2011 and Yr2012.

Important Ratios

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

	as of Dec. 31, 2011	as of Dec. 31, 2012
*Liabilities to assets	0.21	0.22
*Net profit margin (%)	3.19	2.47
*Return on total assets (%)	45.28	31.06
*Turnover/Total assets	14.18	12.58

PROFITABILITY: FAIRLY GOOD

l The turnover of SC appears good in its line in both years.

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

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

l SC’s turnover is in a good level, comparing with the size of its total assets.

LEVERAGE: FAIRLY GOOD

l The debt ratio of SC is low.

l The risk for SC to go bankrupt is low.

Overall financial condition of the SC: Strong.

SC is considered large-sized in its line with strong financial conditions. Over the past 16 years, SC has made a stable growth with acceptable profit.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.58.45
UK Pound	1	Rs.91.60
Euro	1	Rs.77.91

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.