MIRA INFORM REPORT

Report Date :

14.12.2007

IDENTIFICATION DETAILS

Name :	JOTUN PAINTS VIETNAM CO., LTD
Registered Office :	No.1, Road No.10, Song Than Industrial Zone, Di An Dist, Binh Duong Province
Country :	Vietnam
Financials (as on) :	31.12.2006
Date of Incorporation :	1996
Legal Form :	Foreign Owned Company
Line of Business :	Production of decoration products, paints, marine coatings and protective coatings.

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 :	Regular
Litigation :	Clear

SUBJECT IDENTIFICATION & LEGAL FORM
English Name		JOTUN PAINTS VIETNAM CO., LTD
Vietnamese Name		CONG TY TNHH SON JOTUN VIETNAM
Trade Name		JOTUN PAINTS
Founded		1996
Type of Business		100% Foreign Owned Company
Current Business Registered		462043000205
Issued on		July 11^th 2007
Issued on		Boad of Management Binh Duong Industrial Park
Former Investment License		No.1566
Issued on		May 11^th, 1996
Issued by		Ministry of Planning and Investment
Investment Duration		30 years
Start operation		September 10^th, 1996
Current Investment Capital		10,000,000 USD
Current Legal Capital		4,440,000 USD
Former Investment Capital		6,300,000 USD
Original Investment Capital		6,100,000 USD
Tax Code		3700230043
Total Employees		About 150 employees (Including staffs and workers)
Qualification		Qualified
ADDRESSES
Head Office & Factory Location:
Address		No.1, Road No.10, Song Than Industrial Zone, Di An Dist, Binh Duong Province
Vietnam		Vietnam
Tel		(84-650) 742206
Fax		(84-650) 742205
Website		www.jotun.com
Production Capacity		13 million litres per year
Liaison office in Hanoi
Address		4^th, Floor, Room 401, 205 Giang Vo Str, Dong Da Dist, Hanoi
Country		Vietnam
Tel		(84-4) 5120973
Fax		(84-4) 5120974
Chief of Office		MS. TRAN THU HA
Liaison office in Hochiminh city
Address		5^th Floor, No.127-129 Nguyen Hue Str, Dist. 1, Hochiminh City
Country		Vietnam
Tel		(84-8) 9141498
Fax		(84-8) 9141499
Liaison office in Hai Phong city
Address		No. 6, Hoang Dieu Str, Hai Phong City
Country		Vietnam
Tel		(84-31) 822891
Fax		(84-31) 822576
DIRECTORS
1. NAME		Mr. BIRENDER SINGH ARORA (PRIEN ARORA)
Position		General Director
Qualification		Management
Nationality		Indian
2. NAME		Mr. DAO TUAN KHOI
Position		Deputy General Director
Qualification		Management
Nationality		Vietnamese
3. NAME		MR. DOAN HAI KHANH
Position		Director of Financial
Nationality		Vietnamese
Tel		(84-650) 742206, ext 214
BUSINESS NATURE AND ACTIVITIES
The subject specializes in production of decoration products, paints, marine coatings, and protective coatings.
IMPORT & EXPORT ACTIVITIES
IMPORT: The subject imports chemicals, materials from its Group in many countries.
EXPORT: Almost of its products are provided for domestic market.
BANKERS
1. CITY BANK
Address	No. 115 Nguyen Hue Str, Ben Nghe Ward, Dist. 1, Hochiminh City
Country	Vietnam
Tel	(84-8) 8242118
Fax	(84-8) 8242267
2. VIETNAM BANK FOR FOREIGN TRADE – HOCHIMINH CITY BRANCH
Address	No.29 Ben Chuong Duong Str, Hochiminh City
Country	Vietnam
Tel	(84-8) 8251317
Fax	(84-8) 8297228
Telex	811234/5 VVB-VT
Swift	BFTVVBVX 007
SHAREHOLDERS
The subject is a 100% Foreign Invested Company. Its investor is as follows:
Name			JOTUN PAINTS
Address			P.O. Box 2021, 3248 SANDEFJORD
Nation			Norway
Tel			+ 47 33457000
Fax			+ 47 33464613
Shares			100%
PAYMENT HISTORY AND EXPERIENCES
Trade Morality			Good
Liquidity			Normal
Previous Payment Status			Prompt
Current Payment Status			Prompt
Past Financial Situation			Fairly good
Current Financial Situation			Fairly good
Legal Action			No recorded
Bankruptcy			No recorded
Reputation			Relative good
Methods of Payment			Direct payment or through its corresponding bank.
Sales methods			Directly to clients or through its agents
FINANCIAL DATA
BALANCE SHEET
Balance Sheet Date				31/12/2006	31/12/2005	31/12/2004
Number of Weeks				52	52	52
Unit				01 USD	Million VND	Million VND
ASSETS
A. Current assets & Short term Investment				8,273,450	83,338	91,804
I. Cash and cash equivalents				248,145	9,210	7,989
II. Short term investment				0	0	0
1. Short-term securities investment				0	0	0
2. Other short-term investment				0	0	0
3. Provision for devaluation of short-term investment				0	0	0
III. Receivables				3,636,661	41,868	41,506
1. Receivables from customers				3,320,512	38,055	40,079
2. Prepaid for providers				0	0	0
3. Value-added tax deducted				25,073	0	2,475
4. Internal receivables				486,759	3,419	1,002
5. Other receivables				93,928	3,110	502
6. Provision for bad receivables				-289,611	-2,716	-2,552
IV. Inventory				4,324,544	32,260	40,421
1. Purchased goods in transit				0	0	2,971
2. Inventory raw materials				0	0	20,824
3. Inventory appliance				0	0	495
4. Cost of production and business in process				0	0	431
5. Inventory finished products				0	0	9,081
6. Inventory cargoes				4,324,544	32,260	7,558
7. Entrusted goods for sale				0	0	152
8. Provision for devaluation of stocks				0	0	-1,091
V. Other current assets				64,100	0	1,888
1. Advances				0	0	251
2. Prepaid expenses				0	0	835
3. Pending expenses for transfer				0	0	0
4. Pending assets				0	0	0
5. Hypothecation, collateral and short run collateral				64,100	0	802
VI. Administrative				0	0	0
1. Administrative expenses for previous year				0	0	0
2. Administrative expenses for current year				0	0	0
B. Fixed assets & Long term investment				5,536,366	79,188	59,246
I. Fixed assets				5,273,579	72,929	20,511
1. Tangible fixed assets				5,273,579	72,929	20,511
+ Original cost				6,455,024	87,698	30,788
+ Accumulated depreciation value				-1,181,445	-14,769	-10,277
2. Fixed assets of financing credit				0	0	0
+ Original cost				0	0	0
+ Accumulated depreciation value				0	0	0
3. Intangible fixed assets				0	0	0
+ Original cost				0	0	0
+ Accumulated depreciation value				0	0	0
II. Long term investment				0	0	0
1. Long-term securities investment				0	0	0
2. Joint-venture capital contribution				0	0	0
3. Other long-term investment				0	0	0
4. Provision for long-term investment devaluation				0	0	0
III. Capital construction in process				0	2,361	35,163
IV. Other				262,787	3,898	3,572
TOTAL ASSETS				13,809,816	162,526	151,050

LIABILITIES
A. Payables	10,099,053	113,062	103,509
I. Short term payables	9,286,790	106,975	97,346
1.Short-term borrowings	7,179,986	80,357	67,642
2. Due long-term liabilities	0	0	0
3. Payable to seller	1,035,495	8,215	13,913
4. Prepayment of buyer	0	0	0
5. Taxes and accounts dutiable	305,430	1,905	1,589
6. Employee payments	4,418	0	0
7. Internal payments	527,739	6,927	11,663
8. Other payables	233,722	9,571	2,539
II. Long term payables	95,869	6,087	0
1. Long-term borrowing	95,869	6,087	0
2. Long-term loans	0	0	0
III. Other liabilities	716,394	0	6,163
1. Disbursed payable	716,394	0	3,092
2. Pending assets	0	0	0
3. Receipts long-term collateral and deposit	0	0	3,071
B. Owner’s Equity	3,710,763	49,464	47,541
I. Capital and Funds	3,561,452	49,464	47,541
1. Working capital	2,309,240	36,717	36,486
2. Differences from assets revaluation	0	0	0
3. Exchange rate differences	0	0	0
4. Business development fund	0	0	0
5. Reserved fund	0	0	0
6. Retained profit	1,252,212	12,747	11,055
7. Construction capital sources	0	0	0
II. Other administrative and fund sources	149,311	0	0
1. Provident funds for unemployment	149,311	0	0
2. Welfare and reward funds	0	0	0
3. Management funds of higher level	0	0	0
4. Functional operation funds	0	0	0
5. Fund sources formed by fixed assets	0	0	0
TOTAL LIABILITY AND EQUITY	13,809,816	162,526	151,050
PROFIT & LOSE ACCOUNTS
Description	F/Y 2006	F/Y 2005	F/Y 2004
Unit	01 USD	Million VND	Million VND
Total revenue	12,734,831	145,255	117,184
Deducted Items	213,181	2,568	1,073
- Discount	213,181	2,568	0
- Devaluation of sale price	0	0	0
- Return of sold goods	0	0	1,073
- Turnover tax, excise tax, import and export duties to be paid	0	0	0
1. Net revenue	12,521,650	142,687	116,111
2. Original rate of goods for sale	7,578,022	87,661	72,074
3. Combined Profit	4,943,628	55,026	44,037
4. Sales costs	2,703,524	28,632	26,280
5. Enterprise administrative costs	1,342,364	17,430	13,067
6. Net income from business activity	897,740	8,964	4,690
Income from financial activities	29,778	193	165
Costs of financial activities	467,494	5,636	1,527
7. Net income from financial operation	-437,716	-5,443	-1,362
Irregular income	190,127	256	308
Irregular expenditure	15,031	2,303	804
8. Irregular Profit	175,096	-2,047	-496
9. Total pre-tax profit	635,120	1,474	2,832
10. Income tax	184,613	509	339
11. After tax profit	450,507	965	2,493
FINANCIAL FACTORS
Description	2006	2005	2004
Current Liquidity Ratio	0.89	0.78	0.94
Quick Liquidity Ratio	0.43	0.48	0.53
Inventory Circle	1.75	2.41	2.38
Average Receivable Period (days)	106.01	107.10	130.48
Utilizing Asset performance	0.91	0.88	0.77
Liabilities / Total Assets (%)	73.13	69.57	68.53
Liabilities / Owner’s Equity (%)	272.16	228.57	217.73
Income before tax/Total assets (%) ROA	4.60	0.91	1.87
Income before tax / Owner’s Equity (%) ROE	17.12	2.98	5.96
Income before tax/Total revenues (%) NPM	4.99	1.01	2.42
Gross profit /Total revenues (%) GPM	38.82	37.88	37.58
INTERPRETATION
Jotun Vietnam is a 100% foreign invested company. It was licensed in 1996 with investment license No. 1566 on May 11^th 1996 by Ministry of Planning and Investment. At July 11^th 2007, The subject has adjusted investment license by changing Investment License Number (following new rule of government). Current investment capital of the subject is 10,000,000 USD. The subject specializes in producing decoration products, paints, marine coatings and protective coatings. The subject is the first & leading company in producing marine paint in Vietnam. After over 10 years of operation in Vietnam, the subject has achieved a certain market share. It was strongly supported from the big group. Currently, the subject is operating well. Its main and famous products are marine coating & protective coatings. The market share of the subject is being increased and it will be more expanded in near future. The subject has good prospects of development. Operating and trading in a developing country like Vietnam, the subject has many advantages and challenges in operation. Its products are mainly used for construction projects in Vietnam. However, at the moment, the subject has to face with difficulties in competing with other competitors in the same industry. The subject is striving for its stable standing. The premises and facilities of the subject are large. Its management capability is good. Turnover and profit of the subject are high. Total revenue of the subject in 2005 was 145 million VND, increased about 24 percent in comparison with 2004. In 2006, revenue was about 208 billion VND, increased about 32,4 percent in comparison with 2005. The position in the industry of the subject is good. Its competitive capability in the market is relative high. In recent years, the subject has invested more in its factory and its current productivity is about 13 million litres per year. Its financial status is rather strong. The subject has capacity to meet financial commitments. Caution needed for the big business transactions with the subject.
To be rated at BBB, the company has ADEQUATE capacity to meet financial commitments.
CREDIT INQUIRY: 1,500,000 USD
Acceptable with the guarantee.

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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