MIRA INFORM REPORT

Report Date :

22.08.2007

IDENTIFICATION DETAILS

Name :	THU DUC ELECTRO-MACHANICAL COMPANY
Registered Office :	Km 9 Ha Noi Str, Ward 4, Thu Duc Dist, Hochiminh City
Country :	Vietnam
Financials (as on) :	31.12.2006
Date of Incorporation :	01.10.1999
Legal Form :	State Owned Company
Line of Business :	Manufacturing various kinds of MBA and spare parts (equipments, electric board, cable, lines) for power factories. Repairing & maintain diesel generator. Import-export of many kinds of transformers.

RATING & COMMENTS

MIRA’s Rating :

Ba

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Satisfactory
Payment Behaviour :	Regular
Litigation :	Clear

SUBJECT IDENTIFICATION & LEGAL FORM
English name				THU DUC ELECTRO-MACHANICAL COMPANY
Vietnamese name				CONG TY CO DIEN THU DUC
Abbreviated name				THU DUC EMC
Type of business				State Owned Company
Current Business registration				No. 410600279
Issued on				August 29^th, 2006
Issued by				Planning and Investment Department of Hochiminh City
Former Business Registration				No. 103410
Issued on				October 01^st, 1999
Current Registered Capital				54,332,537,244 VND
Next Registered Capital				69,000,000,000 VND
Tax code				0301824508
Total employees				630 employees
Qualification				Qualified
Note: On the registration document, subject is still a state owned company. Currently, subject is under equitization to be joint-stock company and its registered capital will increase up to 69 billion VND. The procedure will be completed and subject will operate as joint stock company in some next months.
ADDRESSES
Head Office
Address			Km 9 Ha Noi Str, Ward 4, Thu Duc Dist, Hochiminh City
Country			Vietnam
Tel			(84-8) 2 144 648
Fax			(84-8) 8 963 159
Email			codientd@hcm.fpt.vn
DIRECTORS
1. NAME			Mr. VO VAN BIEN
Position			General Director
Qualification			Management
Resident			No.14/49 Ham Tu Str, Ward 1, Dist 5, Hochiminh City.
Nationality			Vietnamese
2. NAME			Mr. HO VINH PHU
Position			Business Director
Qualification			Management
Resident			Hochiminh City-Vietnam
Nationality			Vietnamese
Cell phone			+84 963810964
BUSINESS NATURE AND ACTIVITIES
The subject specializes in: - Manufacturing various kinds of MBA and spare parts (equipments, electric board, cable, lines) for power factories. - Repairing & maintain diesel generator. - Import-export of many kinds of transformers.
IMPORT & EXPORT ACTIVITIES
IMPORT: The subject imports from many countries.
EXPORT: The Subject’s products are exported to Japan, Cambodia and Laos.
BANKERS
1. VIETNAM BANK FOR FOREIGN TRADE (VIETCOMBANK)-THU DUC BRANCH
Address		No. 29, Ben Chuong Duong Str, Hochiminh City
Country		Vietnam
Tel		(84-8) 825 1317
Fax		(84-8) 829 7228
Telex		811234/5 VVB-VT
Swift		BFTVVBVX 007
2. ASIA COMMERCIAL JOINT STOCK BANK (ACB BANK)
Address		No. 30 Mac Dinh Chi Str, Da Kao Ward, Dist 1, Hochiminh City
Country		Vietnam
Tel		(84-8) 8243770
Fax		(84-8) 8243946
Telex		813158ACBVT
Swift		ASCBVNVX
3. EXIMBANK – HOCHIMINH CITY
Address		No.7 Le Thi Hong Gam Str, Dist No.1, Hochiminh City
Country		Vietnam
Tel		(84-8) 821 0055
Fax		(84-8) 829 6063
Telex		812690 EIB VT
4. AN BINH COMMERCIAL JS BANK (ABBANK)
Address		78-80 Cach Mang Thang 8 Str, Ward 6, Dist 3, Hochiminh City
Country		Vietnam
Tel		(84-8) 9300797
Fax		(84-8) 9300798
Telex		info@abbank.vn
SHAREHOLDER (S)
The subject is a 100% State Owned Company, under management of ELECTRICITY OF VIETNAM (EVN-TONG CONG TY DIEN LUC VIETNAM). However, it is under equitization to be joint-stock company. The procedure will be completed and subject will operate as joint stock company in some next months. After equitization, the subject’s shareholders will be: STATE OWNED 51% shares; Employees of subject: 11.42% and 37.58 %Public Shares.
PAYMENT HISTORY AND EXPERIENCES
Trade Morality		Normal
Liquidity		Normal
Previous Payment Status		Average
Current Payment Status		Normal
Past Financial Situation		Normal
Current Financial Situation		Developed
Legal Action		No recorded
Bankruptcy		No recorded
Reputation		Fairly good
Modes of Payment		Direct payment or through its corresponding bank. Foreign remittance by letter of credit (L/C) or by telegraphic transfer (T/T).
Sales methods		Directly to clients or through its group's agents.
FINANCIAL DATA
BALANCE SHEET
Unit: million VND
Balance sheet date					31/12/2006	31/12/2005
Number of weeks					52	52
ASSETS
A -	CURRENT ASSETS				206,929	181,366
I.	Cash and cash equivalents				12,434	12,131
1.	Cash				12,434	12,131
2.	Cash equivalents
II.	Short-term investments
1.	Short-term investments
2.	Provisions for short-term investment of short- term investments in securities
III.	Accounts receivable				75,024	44,482
1.	Receivable from customers				59,971	47,014
2.	Repayments to suppliers				3,770	1,420
3.	Value-added tax deducted				0	0
4.	Inter- company receivable
5.	Receivable according to the process of construction contracts				11,283	3,714
6.	Other receivable				0	-7666
7.	Provisions for bad debts
IV.	Inventories				100,787	121,114
1.	Inventories				100,787	121,114
2.	Provisions for devaluation of inventories				0	0
V.	Other current assets				18,684	3,639
1.	Short-term repaid expenses				162	114
2.	Taxes receivable				3,018	3,525
3.	Other current assets				15,504
B -	LONG TERM ASSETS				31,814	30,654
I.	Long term accounts receivable
1.	Long term accounts receivable from customers
2.	Long term inter- company receivable
3.	Other long term receivable
4.	Provisions for bad debts
II.	Fixed assets				31,457	30,210
1.	Tangible assets				29,830	29,233
	Original costs				58,746	75,959
	Accumulated depreciation				-28,916	-46,726
2.	Financial leasehold assets
	Original costs
	Accumulated depreciation
3.	In-tangible assets
	Original costs
	Accumulated depreciation
4.	Construction in progress				1,627	977
III.	Investment property
	History costs
	Accumulated depreciation
IV.	Long term investments				300	300
1.	Investments in affiliates				0	0
2.	Investments in business concerns and joint ventures				0	0
3.	Other long term investments				300	300
4.	Provisions for devaluation of investments in securities					0
V.	Other long term assets				57	144
1.	Long term repaid expenses				27	114
2.	Deferred income tax
3.	Other long term assets				30	30
	TOTAL ASSETS				238,743	212,020
LIABILITIES
A -	LIABILITIES				174,078	150,464
I.	Short term liabilities				173,499	150,425
1.	Short term debts and loans				90,937	66,247
2.	Payable to suppliers				68,145	62,634
3.	Advances from customers				12,351	14526
4.	Taxes and other obligations to the State Budget				726	991
5.	Payable to employees				0	2,746
6.	Accrued expenses				667	1835
7.	Inter- company payable				633	905
8.	Payable according to the progress of construction contracts
9.	Other payables				40	541
II.	Long term liabilities				579	39
1.	Long term account payable to suppliers
2.	Long term inter- company payable
3.	Other long term payable				39	39
4.	Long term debts and loans
5.	Deferred income tax				540
B -	OWNER’S EQUITY				64,665	61,556
I.	Owner’s equity				64,786	62,541
1.	Capital				62,936	62,265
2.	Share premiums				0	0
3.	Treasury stocks				0	0
4.	Differences on asset re-valuation				0	0
5.	Foreign exchange differences				0	0
6.	Business promotion fund				0	0
7.	Financial reserved fund				0	-1005
8.	Other funds				5,997	1035
9.	Retained earnings				-4,147	246
II.	Other sources and funds				-121	-985
1.	Bonus and welfare funds				-121	-985
2.	Sources of expenditure				0	0
3.	Funds to form fixed assets				0	0
	TOTAL LIABLITIES AND OWNER’S EQUITY				238,743	212,020
PROFIT & LOSE ACCOUNT (INCOME STATEMENT)
	Description				F/Y 2006	F/Y 2005
1.	Sales				192,595	221,666
2.	Deductions				176	0
3.	Net sales				192,419	221,666
4.	Costs of goods sold				169,434	211,502
5.	Gross profit				22,985	10,164
6.	Financial income				895	231
7.	Financial expenses				139	7,838
	- In which : Loan interest expenses
8.	Selling expenses				6,143	5,410
9.	Administrative overheads				14,067	932
10.	Net operating profit				3,531	-3,785
11.	Other income				1,113	2,107
12.	Other expenses				1,497	2,469
13.	Other profits				-384	-362
14.	Profit (loss) before tax				3,147	-4,147
15.	Income tax				935	0
16.	Profit (loss) after tax				2,212	-4,147
FINANCIAL FACTORS
Description					FY 2006	FY 2005
Current Liquidity Ratio					1.19	1.21
Quick Liquidity Ratio					0.61	0.40
Inventory Circle					1.53	1.75
Average Receive Period					142.31	73.25
Utilizing Asset Performance					0.81	1.05
Liability / Total Asset (%)					72.91	70.97
Liability / Owner’s Equity (%)					269.20	244.43
Income Before Tax / Total Asset (%) ROA					1.32	-1.96
Income Before Tax / Owner’s Equity (%) ROE					4.87	-6.74
Income Before Tax / Total Revenue (%) NPM					1.63	-1.87
Gross Profit / Total Revenue (%) GPM					11.93	4.59
INTERPRETATION
The subject is a State owned enterprise under the management of ELECTRICITY OF VIETNAM. The subject specializes in manufacturing & trading in transformers and spare parts, tools & equipments for electric factories. The premise of subject is good. The subject's market share is large. It has been strongly supported from Government. It takes many advantages in this industry. It has a big volume of traditional clients. The position of the company in the industry is good. It is one of the biggest suppliers in Vietnam in industry. Financial situation is normal and it will be better after equitization. In overview, the subject is a medium-big company, which is operating in potential industry, future prospect seems bright.

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	Unfavourable & favourable factors carry similar weight in credit consideration. 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
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

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%)

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