China Industrial Group Inc (OTC:CIND)

Business Description as of the quarterly period ended: February 29, 1996 (GeoInvesting is continuing to investigate current operations)

China Industrial Group, Inc. (the Group) consists of Nova Industrial Holdings Limited, a British Virgin Islands corporation, which is a holding company for four operating entities. The operations of the Group are divided into distribution and manufacturing. In addition, Harrington Worldwide Holdings Limited, a wholly owned subsidiary of the group provides investment and management services to customers in China and the Asia Pacific region.

The Group's distribution activities involve wool, industrial chemicals and pharmaceutical products. The Group purchases wool from unrelated persons mainly in new Zealand and Australia principally for US dollars and, in turn, sells the wool through its sales representative offices to its customers in the Peoples' Republic of China (China).

The Group is responsible for all aspects of delivery of wool to the factory, including customs clearance and transportation. To support its distribution, the Group leases a number of bonded warehouses in China which take delivery of the wool and arrange for shipment directly to the factories.

The Group receives payment of wool in Renminbi, the Chinese Currency (RMB). The Group then uses RMB to purchase industrial raw materials such as chemical and pharmaceutical materials from manufacturers located in China and export to customers overseas. Sales of these products in turn generate U.S. dollars, which are then used to purchase wool in Australia and New Zealand.

Although the Group bears the risk of non-payment from its customers, the Group generally purchases products pursuant to outstanding orders. Thus the Group's exposure to currency risk and inventory problems is minimized.

The Group, through its wholly owned subsidiary, Harrington Worldwide Holdings Limited, is engaged in providing investment, financial, corporate advisory and nominee services to its clients including advice on mergers and acquisitions, and joint ventures with Chinese enterprises. The Company maintains close working relationships with authorities, and commercial communities in China and the Asia Pacific region and provides experienced judgment to help clients to achieve their diverse objectives.

The Company participated in a number of strategically significant transactions, including merger and acquisition, joint ventures and restructuring. The company is responsible for leading and coordinating clients in execution of their capital and investment transactions.

In addition, the Company provides financial and management consultancy services to Chinese enterprise and develops innovative solutions, often involving implementation of strategic initiatives, to meet their needs.

The Company identifies, structures, and manages investments in acquisition and restructuring, on behalf of its clients. In addition, the Company provides nominee services to foreign enterprises for their China ventures.

The Group is also engaged in the manufacture of woolen products through its interest in its joint venture company in China. These facilities produce a variety of wool products ranging from scoured wool (washed and comb wool), wool top (washed and combed wool that has been processed into a spool of rope), yarns, rolls of wool fabric to woolen sweaters mainly for the Chinese consumer market.

In December 1995, the Group changed its fiscal year from December 31 to May 31 to reflect a natural business cycle. (10Q For the quarterly period ended: February 29, 1996)