Business Credit Report 18/06/2012 Spett.le cliente alfa xxxxxxx Commercial Trading (Shanghai) Co., Ltd. GTM Reference No. G120614223 Currency in this report is Chinese Yuan unless otherwise stated. Exchange Rate: 1 USD=6.37 Chinese Yuan "--"in this report indicates "unavailable" due to insufficient information or "no comments" ORDER INFORMATION NAME ADDRESS xxxxxxxx International Holding Ltd Room 1302-546 Chang Ning Road 200042 Shanghai Notes: 1.The English name (xxxxxxx International Holding Ltd) provided in the order is the name of SBE s related company in Hong Kong. SBE s foreign business is usually done using the name Landmark International Holding Ltd. 2. Due to recent intervention of government in the AIC systems, credit report of companies in some regions could be impacted for a certain period. For companies registered in Shanghai, financial information couldn t be obtained. EXECUTIVE SUMMARY DATE OF ESTABLISHMENT Mar 17 th, 2009 AIC REGISTRATION NO. xxxxxxxxxxxx REGISTERED LEGAL FORM WHOLLY FOREIGN-OWNED ENTERPRISE REGISTERED CAPITAL USD 320,000.00 MAIN BUSINESS Wholesale of garments. TAX NO. -- EMPLOYEES 50 IMPORT AND EXPORT PERMITS YES CREDIT RATING CR4 BASE CREDIE LIMIT 150,000.00 EXCHANGE RATE 1 USD=6.37CNY (June 15 th, 2012) Registered Address RM 331, Building 5, No. 397, Jiaozhou Rd, Jing an Dist, xxxxxxxx Zip Code 200040 Business Address xxxxxxxxxxx Changning Rd, Changning Dist, Shanghai Zip Code 200042 DISCLAIMER: This report is forwarded to the subscriber in strict confidence for use by the subscriber as one factor in 1
SUBJECT: xxxxxxxx Commercial Trading (Shanghai) Co. Ltd Telephone Mobile Fax Email SIC Code (China) xxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxx cici@hklandmark.cn 6332 Wholesale of garments. REGISTRATION Name (Chinese) 纪 同 商 贸 ( 上 海 ) 有 限 公 司 Name (English) xxxxxxxx Commercial Trading (Shanghai) Co.,Ltd. Date of Establishment Mar 17 th, 2009 Registry Administration Bureau of Industry and Commerce Shanghai City Legal Representative xxxxxxxxxxx 林 ( 志 隆 ) AIC Registration Number xxxxxxxxxxx Registered Legal Form WHOLLY FOREIGN-OWNED ENTERPRISE Registered Capital USD 320,000.00 Operating Duration Mar 17 th, 2009 to Mar 16 th, 2039 Business Scope Wholesale, retail, import, export and acting as commission agent of garments, decorations, shoes, hats, bags, watches, etc; Providing related supporting service; Providing garment design consultancy service. (with license for those needed) 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. REGISTRATION INFO: AVAILABLE FINANCIAL REPORTS: AVAILABLE FIELD INVESTIGATION 1. SC s business income comes mainly from Ed Hardy Brand garments, Christian Audigier Brand garments, Tendence Brand watches, etc. Its products are mainly sold in China mainland, Macao, etc. SC s sales business is mainly developed through the brand flagship stores established in many cities. The industry of garment is an 2
SUBJECT: Jitong Commercial Trading (Shanghai) Co. Ltd industry with fierce competition. There are a lot of similar enterprises in the local place as SC s competitors. With short history, its popularity in domestic and international market is limited and its clients are mostly from high-end consumption market. Generally speaking, SC s competitiveness in the local industry is average. 2. Shanghai City, SC s location has the largest foreign trade port and industrial base in China. It is the economic, technology, industrial, financial, trade, exhibition and shipping center of China with highly developed economy. As a wholly foreign owned enterprise dealing with wholesale of garments, SC enjoys certain favorable policies provided by the local government. SHAREHOLDERS AND SHARES As indicated in the following table: (Unit: USD) Shareholder Capital Subscribed Percentage xxxxxxxxxx xxxxxxxxx HOLDING 320,000.00 100% LIMITED Total 320,000.00 100% Shareholder Way of Investment Paid-up Percentage xxxxxxxxx xxxxxxxxxx HOLDING LIMITED -- 100% Background of major shareholder Name xxxxxxxxxx INTERNATIONAL HOLDING LIMITED File No. xxxxxxxxxx Country Hong Kong Date of establishment June 24 th, 2008 Company form Private company AFFILIATE(S) Name Relationship with SC File No. Country xxxxxxxxx INTERNATIONAL HOLDING LIMITED Related company. xxxxxxxxx Hong Kong Date of Establishment May 9 th, 2008 3
SUBJECT: xxxxxxx Commercial Trading (Shanghai) Co. Ltd Company form Private company MANAGEMENT Name xxxxxxx ( 林 志 隆 ) Gender Male Title Legal Representative Working experience Over 5 years working experience and over 5 years management experience. NUMBER OF EMPLOYEES Employees: 50 Management Staff: 10 Recent recruitment: Yes Job-hunting websites Job title Number http://search.51job.com/list/co,c,23926 Graphic designer Several. http://search.51job.com/list/co,c,23926 Visual Merchandiser Several. http://search.51job.com/list/co,c,23926 Regional Operation Manager 1 http://search.51job.com/list/co,c,23926 Public Relations Manager 1 http://search.51job.com/list/co,c,23926 Receptionist 1 http://search.51job.com/list/co,c,23926 System administrator. Several. http://search.51job.com/list/co,c,23926 HR manager. 1 BANKERS INFORMATION Bank name Account No. (CNY) Industrial and Commercial Bank of China Nanjing West Rd (Shanghai) Sub-branch xxxxxxxxxxx 4
SUBJECT: Jitong Commercial Trading (Shanghai) Co. Ltd Tel. 86 21 62675521 Comment The investigated person confirmed SC opened an account in the bank and the above account information is correct. Also, SC has opened an foreign currency account in the bank, but hasn t been normally operated so far. OFFICE FACILITIES Geographic Location RM 1302, No.546, Changning Rd, Changning Dist, xxxxx Area 200 square meters Environment Business district. Traffic condition Convenient (surrounded by Kaixuan Rd, Yan an West Rd and closed to Subway 11 and Subway 2. Purpose Office. Property Ownership Rented Other address -- WEBSITE N/A TRADEMARKS Total trademark 2 Registration No. 10088561 Registration date Oct 20 th, 2011 Image Registration No. 10088528 Registration date Oct 20 th, 2011 Image PATENTS After checking with the State Intellectual Office, no patents of SC was found. 5
SUBJECT: xxxxxxxxx Commercial Trading (Shanghai) Co. Ltd MAIN PRODUCTS & SERVICES Main business Products and services cities. Picture of specific products -- Annual production capacity -- Plants and equipments -- Awards & Honors -- Certificates / licenses -- Wholesale of garments. SC mainly deals with sales, wholesale and retails of foreign luxurybranded garments. Its affiliated garment brands include Ed Hardy, christian Audigier, giuliano Fujiwara, etc. It also deals with Tendence Brand watches, etc. SC has established brand flagship stores in many SALES INFORMATION Domestic sales 90% Regions All over China Major domestic clients Brand flagship stores. Competitors XIAMEN DIANZHONG COMMERCIAL TRADE CO. LTD; HANGZHOU FENGYUAN TRADE CO. LTD; SHENZHEN OULIMEI GARMENTS CO. LTD; SHENZHEN LANCAOXUAN GARMENTS CO. LTD, etc. Payment terms Prompt payment; on credit Export 10% Regions Macao, Asia, etc. Major overseas clients Brand flagship stores. Payment terms L/C, T/T SC s products are mainly sold through the brand flagship stores it established in many cities. The above information was confirmed by SC s employee on June 15 th, 2012. PURCHASE INFORMATION Main Commodities Purchased Garments, watches, offices supplies, etc. Number of Major Suppliers About 5 Region 采 购 地 区 Domestic:5 % Major suppliers Import: 95% Ed Hardy limited; TENDENCE SA; SHANGHAI XINHAO INTELLECTUAL PROPERTY AGENCY CO. LTD, etc. Main Terms of Payment Local: Prompt payment; on credit 6
SUBJECT: Jitong Commercial Trading (Shanghai) Co. Ltd Import: L/C, T/T SC mainly deals with sales, wholesale and retail of overseas luxury brands of garments and watches including Ed Hardy, christian Audigier, giuliano Fujiwara, Tendence, etc. Its products are mainly imported from USA, Hong Kong, Italy, Switzerland, etc. Its domestic suppliers are mainly companies which provide office supplies. The above information was confirmed by SC s employee on June 15 th, 2012. CREDIT RECORDS Name of supplier Main commodities and service SHANGHAI XINHAO INTELLECTUAL PROPERTY AGENCY CO. LTD Trademark agent service. supplied Interviewee Ms Hua of Registration Department. Telephone of Interviewee 86 21 68750788 Payment comment The investigated person confirmed that SC is one of their clients and SC s credit status is good. Date of interview June 15 th, 2012 LITIGATION RECORDS After checking with China Court organization, the local court website and other major searching websites, no litigation record related to SC in the latest three years is found. OTHER ADVERSE MEDIA INFORMATION Date Source Content Feb 5 th, 2012 http://www.hjbh.org/huanjingp Disqualification of SC s garments. uguang/2012/0205/2015.html 2011 http://www.khmcc.com/2012/0 605/1935.html Disqualification of SC s Ladies T-Shirt Logo. FINANCE According to SC s Manager Huang, SC mainly deals with sales of overseas high-end luxury brand products. It is a medium sized enterprise. Its annual turnover of 2011 was between 10 billion CNY and 30 billion CNY. 7
SUBJECT: xxxxx Commercial Trading (Shanghai) Co. Ltd Important Ratios: 2010 Industry Financial Indices Return on net assets (%) 23.27 Return on total assets (%) 8.18 Net profit margin (%) 5.79 Turnover of total assets 1.46 Turnover of current assets 1.68 Turnover days of account 65.38 receivable Inventory turnover days 84.77 Asset liability ratio (%) 64.82 Current ratio 1.38 Quick ratio 1.02 Analysis of financial indicator SC mainly deals with sales, wholesale and retail of high-end garments, watches, etc including Ed Hardy, Christian Audigier, etc and belongs to sales and wholesale of luxury goods industry. When luxury goods consuming market was shrinking during economic crisis, China s luxury goods consumption trend was still satisfactory. China s luxury goods consumption market scale is large. SC s industry prospect is bright. Established in 2001, SC s industry experience and sales experience are limited and its competitiveness needs to be improved. Shanghai City, SC s location is a highly developed city with stable foreign trade condition. SC s overall economy environment is satisfactory. As a wholly foreign owned enterprise invested by the Hong Kong enterprise, SC s shareholder and related company enjoy certain popularity in the local industry which is favorable to its business expanding. INDUSTRY PROFILE Industry SIC Code (China): 6332 wholesale of garments Description: wholesale, import and export of men and women s garments, children s garments, sports wear, sweater, underwear, socks etc. Status Quo & Trend Although China is a large producer and exporter of garments, the decrease of its inventory, domestic and international consumption capacity has restricted the development of garment wholesale industry. In 2010, China s garment inventory volume (about 15 billion pieces) reached 20% of the production volume, growing at a speed of 10% per year. Thus dealing with inventory has become the focus of garment wholesale industry. 8
SUBJECT: xxxxx Commercial Trading (Shanghai) Co. Ltd Garment wholesale, which is the main sales method of garments, occupies an important position in the wholesale industry. From January to September in 2011, the export value of China s textile garments was USD 186.139 billion, increasing 24.25% year/year. From January to July in 2011, the export value of China s textiles was USD 54.6 billion, increasing 27.5% year/year; whilst the export value of shoes was USD 23.49 billion, increasing 20.9% year/year. However, China s export status of garment is not satisfactory due to the influence of RMB appreciation, increasing cost, etc Industry Associations Name of association China National Garment Association China Fashion Designers Association Shanghai Garment Industry Association Shanghai Clock Industry Association Membership of subject No No No No GENERAL COMMENTS Established in March, 2009, SC mainly deals with sales, wholesale and retail of overseas luxury brands of garments and clocks including Ed Hardy, christian Audigier, Tendence, etc. It has established brand flagship stores in many cities. With short history, SC s industry experience and clients are limited. However, its shareholder and related companies provide it with certain capital and business expanding supports. SC mainly deals with high-end luxury brands at present and its clients are mainly from high-end market. CREDIT RATING CR4 When performing an analysis on the credit rating of Subject, we takes into comprehensive consideration Subject's size, history and background, finance in comparison with the industrial averages, and operations, credit record, and so on. The definitions of credit ratings are given as follows. Rating Risk Level Suggestion CR1 Very low Credit can be extended in very loose terms. CR2 Low Credit can be extended in rather loose terms. CR3 Below average Credit can be extended in normal terms. CR4 Average Credit should be on close monitoring basis. CR5 Above average Credit should be avoided as much as possible. CR6 High Credit should be on a security basis. 9
SUBJECT: xxxxxxxx Commercial Trading (Shanghai) Co. Ltd CR7 Very high Transaction should be on COD basis. BASE CREDIT LIMIT 150,000.00 Chinese Yuan When calculating base credit limit, we presupposes that Subject purchases main commodities/services equally from many suppliers. Main factors considered include Registered Capital, Net Assets, Total Assets, Turnover, Profit, Credit Rating, etc. No consideration is given to the specific situation of your transaction with Subject. You may refer to the following suggestions when making credit decisions, but it is advisable that proper adjustments be made in accordance with your marketing strategies and credit policies. Annual Supply/Subject's Turnover Suggested Credit Limit Above 40% Above 4 times of base credit limit 30%-40% 3 to 4 times of base credit limit 20%-30% 2 to 3 times of base credit limit 10%-20% 1 to 2 times of base credit limit Below 10% within base credit limit --------- End of the Report --------- 10