MIRA INFORM REPORT

Report Date :

26.11.2014

IDENTIFICATION DETAILS

Name :	CHECKPOINT APPAREL LABELLING SOLUTIONS ASIA LTD.

Registered Office :	Block A, 4/F., Shatin Industrial Centre, 5-7 Yuen Shun Circuit, Siu Lek Yuen, Shatin, New Territories

Country :	Hong Kong

Date of Incorporation :	10.10.1980

Com. Reg. No.:	07132911

Legal Form :	Private Limited Company

Line of Business :	Manufacturer, Importer and Exporter Barcode, Label, Prevention Label, and Prevention System

No of Employees :	12

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 1, 2014

Country Name

Previous Rating

(31.03.2014)

Current Rating

(01.06.2014)

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 has no tariffs on imported goods, and it levies excise duties on only four commodities, whether imported or produced locally: hard alcohol, tobacco, hydrocarbon oil, and methyl alcohol. There are no quotas or dumping laws. 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, its continued reliance on foreign trade and investment leaves it vulnerable to renewed global financial market volatility or a slowdown in the global economy. 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 12% of total system deposits in Hong Kong by the end of 2013. 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 total trade 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 34.9 million in 2012, 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 2012 mainland Chinese companies constituted about 46.6% of the firms listed on the Hong Kong Stock Exchange and accounted for about 57.4% 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. Credit expansion and tight housing supply conditions have caused Hong Kong property prices to rise rapidly; consumer prices increased by more than 4% in 2013. 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. In 2013, Hong Kong and China signed new agreements under the Closer Economic Partnership Agreement, adopted in 2003 to forge closer ties between Hong Kong and the mainland. The new measures, effective from January 2014, cover services and trade facilitation, and will improve access to the mainland's service sector for Hong Kong-based companies.

Source : CIA

Company Name & address

CHECKPOINT APPAREL LABELLING SOLUTIONS ASIA LTD.

ADDRESS: Block A, 4/F., Shatin Industrial Centre, 5-7 Yuen Shun Circuit, Siu Lek Yuen, Shatin, New Territories, Hong Kong.

PHONE: 852-2527 2327

FAX: 852-2527 8408

MANAGEMENT

Managing Director: Mr. Par Harald Levin

SUMMARY

Incorporated on: 10th October, 1980.

Organization: Private Limited Company.

Issued Share Capital: HK$90,000,000.00

Business Category: Importer, Exporter and Manufacturer.

Group Net Revenues: US$689.7 million. (Year ended 29-12-2013)

Employees: 12.

Main Dealing Banker: The Hongkong & Shanghai Banking Corp. Ltd., Hong Kong.

Banking Relation: Satisfactory.

Name

CHECKPOINT APPAREL LABELLING SOLUTIONS ASIA LTD.

ADDRESS

Registered Head Office:-

Block A, 4/F., Shatin Industrial Centre, 5-7 Yuen Shun Circuit, Siu Lek Yuen, Shatin, New Territories, Hong Kong.

Holding Company:-

Checkpoint Holland Holding B.V., Netherlands.

Ultimate Holding Company:-

Checkpoint Systems, Inc., US.

Affiliated/Associated Companies:-

Actron UK Ltd., UK.

Adapt Identification (HK) Ltd., Hong Kong.

Adapt Identification India Private Ltd., India.

Adapt Identification LLC, US.

Adapt Seoul Co. Ltd., Korea.

ADS (United Kingdom) Ltd., UK.

ADS Worldwide Ltd., UK.

Asange Ltd., Hong Kong.

Ashanko Ltd., Hong Kong.

Brilliant Garment Accessories (Dongguan) Ltd., China.

Brilliant Label (Dongguan) Manufacturing Ltd., China.

Brilliant Labels International Ltd., Hong Kong.

Checkpoing Systems (ZJG) Co. Ltd., China.

Checkpoint (Jiangsu) Label Technology Co. Ltd., China.

Checkpoint Apparel Labeling Solutions India Private Ltd., India.

Checkpoint Caribbean Ltd., Cayman Islands.

Checkpoint Checknet Etiket Ltd. Sirketi, Turkey.

Checkpoint Checknet India Private Ltd., India.

Checkpoint Commercial (Shanghai) Co. Ltd., China.

Checkpoint de Mexico S.A. de C.V., Mexico.

Checkpoint do Brasil Ltda., Brazil.

Checkpoint Holland Treasury B.V., Netherlands.

Checkpoint International L.L.C., US.

Checkpoint Labelling Services Hong Kong Ltd., Hong Kong.

Checkpoint Ltd., New Zealand.

Checkpoint Manufacturing Japan Co. Ltd., Japan.

Checkpoint Portugal Sistemas Anti-Furto S.A., Portugal.

Checkpoint Solutions GmbH, Germany.

Checkpoint Systems (Aust.) Pty. Ltd., Australia.

Checkpoint Systems (CEE) Spolka z.o.o., Poland.

Checkpoint Systems (M) Sdn. Bhd., Malaysia.

Checkpoint Systems (UK) Ltd., UK.

Checkpoint Systems AG, Switzerland.

Checkpoint Systems Bangladesh Ltd., Bangladesh.

Checkpoint Systems Benelux B.V., Netherlands.

Checkpoint Systems Canada ULC, Canada.

Checkpoint Systems Danmark A/S, Denmark.

Checkpoint Systems Espana S.L.U., Spain.

Checkpoint Systems Finland Oy, Finland.

Checkpoint Systems France S.A.S., France.

Checkpoint Systems FZE, UAE.

Checkpoint Systems GmbH, Germany.

Checkpoint Systems Holding GmbH, Germany.

Checkpoint Systems Holding Inc., US.

Checkpoint Systems Hong Kong Ltd., Hong Kong.

Checkpoint Systems India Private Ltd., India.

Checkpoint Systems International GmbH, Germany.

Checkpoint Systems Italia S.p.A., Italy.

Checkpoint Systems Japan Co. Ltd., Japan.

Checkpoint Systems S.A., Argentina.

Checkpoint Systems Sales (M) Sdn. Bhd., Malaysia.

Checkpoint Systems Software Development & Maintenance (Philippines) Inc., Philippines.

Checkpoint Systems Sverige AB, Sweden.

Checkpoint Systems Technology Singapore Pte. Ltd., Singapore.

CP International Systems C.V., Netherlands.

Cybsa Adapt SA de CV, El Salvador.

Evagard Ltd., UK.

Guangdong Checkpoint Brilliant Label & Sign Ltd., China.

J&F International USA Inc., US.

Kimball Systems B.V., Netherlands.

Meto Australia Pty. Ltd., Australia.

Meto UK Ltd., UK.

OAT Systems Inc., US.

OATSystems Software India Private Ltd., India.

Shanghai Asialco Electronics Co. Ltd., China.

Shore to Shore (Far East) Ltd., Hong Kong.

Shore to Shore Centroamerica S.A., Guatemala.

Shore to Shore Lacar Ltda., Guatemala.

Sidep Electronics (Shanghai) Co. Ltd., China.

Turn-O-Matic International AB, Sweden.

W Print Europe Ltd., UK.

BUSINESS REGISTRATION NUMBER

07132911

COMPANY FILE NUMBER

0087741

MANAGEMENT

Managing Director: Mr. Par Harald Levin

ISSUED SHARE CAPITAL

HK$90,000,000.00

SHAREHOLDER

(As per registry dated 10-10-2014)

Name

No. of shares

Checkpoint Holland Holding B.V.

Coltbaan 21, 3439 NG Nieuwegein, Netherlands.

90,000,000

========

DIRECTORS

(As per registry dated 10-10-2014)

Name (Nationality)	Address
Par Harald LEVIN	Calle Ega 4, 28002 Madrid, Spain.
Stephen James WRIGLEY	White Lodge, Critter Lane Ranmore, Surrey, RH5 6ST, United Kingdom.
Nicolas BROUCHON	16 Quai General Sarrail Lyon, 69006, France.

SECRETARY

(As per registry dated 10-10-2014)

Name	Address	Co. No.
FK & C Corporate Services Ltd.	Suite 3104-3106, 31/F., Central Plaza, 18 Harbour Road, Wanchai, Hong Kong.	0512176

HISTORY

The subject was incorporated on 10th October, 1980 as a private limited liability company under the Hong Kong Companies Ordinance.

Originally the subject was registered under the name of Manfit Trading Co. Ltd., name changed to Brilliant Prawn Chip Ltd. on 29th June, 1984, changed to Brilliant Label Manufacturing Ltd. on 1st August, 1986 and further to the present style on 7th November, 2012.

Apart from these, neither material change nor amendment has been ever traced and noted.

OPERATIONS

Activities: Importer, Exporter and Manufacturer.

Lines: Barcode, Label, Prevention Label, and Prevention System.

Employees: 12.

Commodities Imported: China, other Asian countries.

Markets: Asian countries, Europe, North America.

Group Net Revenues: US$758.4 million (Year ended 25-12-2011)

US$689.9 million (Year ended 30-12-2012)

US$689.7 million (Year ended 29-12-2013)

Net Revenues of Apparel Labelling Solutions:-

US$200.0 million (Year ended 25-12-2011)

US$187.4 million (Year ended 30-12-2012)

US$182.3 million (Year ended 29-12-2013)

Terms/Sales: L/C or as per contracted.

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

FINANCIAL INFORMATION

Issued Share Capital: HK$90,000,000.00

Group Net Loss : (US$ 83.5) million (Year ended 25-12-2011)

(US$146.5) million (Year ended 30-12-2012)

(US$ 18.9) million (Year ended 29-12-2013)

Gross Profit of Apparel Labelling Solutions:-

US$56.7 million (Year ended 25-12-2011)

US$47.1 million (Year ended 30-12-2012)

US$54.7 million (Year ended 29-12-2013)

Profit or Loss: Group suffered from losses in past three years.

Condition: Keeping in a fair manner.

Facilities: Making rather active use of general banking facilities.

Payment: Met trade commitments as required.

Commercial Morality: Satisfactory.

Banker: The Hongkong & Shanghai Banking Corp. Ltd., Hong Kong.

Standing: Small.

GENERAL

Checkpoint Apparel Labelling Solutions Asia Ltd. is a wholly-owned subsidiary of Checkpoint Systems, Inc. [Checkpoint System/Group] which is a US-based company.

Checkpoint Systems is a global leader in merchandise availability solutions for the retail industry, encompassing loss prevention and merchandise visibility.

Checkpoint provides end-to-end solutions enabling retailers to achieve accurate real-time inventory, accelerate the replenishment cycle, prevent out-of-stocks and reduce theft, thus improving merchandise availability and the shopper’s experience.

Checkpoint’s solutions are built upon 45 years of radio frequency technology expertise, innovative high-theft and loss-prevention solutions, market-leading RFID hardware, software, and comprehensive labelling capabilities, to brand, secure and track merchandise from source to shelf.

Its customers benefit from increased sales and profits by implementing merchandise availability solutions, to ensure the right merchandise is available at the right place and time when consumers are ready to buy.

It has been listed on the NYSE (NYSE: CKP).

Checkpoint operates in every major geographic market and employs 4,700 people worldwide.

In August 2009, Checkpoint acquired Brilliant Labelling Solutions Asia Ltd., a China-based manufacturer of paper, fabric and woven tags and labels. Through its facilities in Hong Kong and China, Brilliant Label added capacity to Checkpoint’s apparel labelling business and expanded our manufacturing footprint.

In 2012, Checkpoint refined its business strategy to transition from a product protection business to a provider of inventory management solutions that give retailers ready insight into the on-shelf availability of merchandise in their stores. In support of this strategy, Checkpoint continues to provide to retailers, manufacturers and distributors its EAS systems and consumables, Alpha® high-theft solutions, and Merchandise Visibility™ (RFID) products and services. In apparel labelling, Checkpoint is focusing on those products that support its refined strategy and leveraging its competitive advantage in the transfer and printing of variable data onto apparel labels. It will also consider acquisitions that are aligned with its strategic plan. It will continue to consider divesting certain businesses and product lines that are not advantageous to its refined strategy.

Historically, Checkpoint has set up three segments: Shrink Management Solutions (SMS), Apparel Labelling Solutions (ALS), and Retail Merchandising Solutions (RMS). During the third quarter of 2013, we adjusted the product allocation between our SMS and ALS segments, renamed the SMS segment Merchandise Availability Solutions (MAS) and began reporting its segments as: Merchandise Availability Solutions, Apparel Labelling Solutions, and Retail Merchandising Solutions.

The Group suffered from losses in past three years. However, its Apparel Labelling Solutions Segment was profitable.

Apparel Labelling Solutions (ALS) is the Group’s second largest segment. ALS revenues represented 26%, 27%, and 26% of our total revenues for 2013, 2012, and 2011, respectively. Checkpoint provides apparel retailers, brand owners, and manufacturers with a single source for their apparel labelling requirements. ALS also includes its web-based data management service and network of 20 service bureaus strategically located in 17 countries close to where apparel is manufactured. Our data management service offers order entry, logistics, and data management capabilities. It facilitates on-demand printing of variable information onto apparel tags and labels.

The subject’s business is fully supported by Checkpoint. History in Hong Kong is over 34 years.

Since Checkpoint has been suffering from losses, on the whole, consider the subject good for normal business engagements in small credit amounts.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.61.92
UK Pound	1	Rs.97.12
Euro	1	Rs.76.93

INFORMATION DETAILS

Analysis Done by :	KAR

Report Prepared by :	TPT

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.