MIRA INFORM REPORT

Report Date :

31.08.2007

IDENTIFICATION DETAILS

Name :	VEDAN VIETNAM ENTERPRISE CORPORATION LIMITED
Registered Office :	National Road 51, 1A Hamlet, Phuoc Thai Commune, Long Thanh Dist, Dong Nai Province
Country :	Vietnam
Financials (as on) :	31.12.2006
Date of Incorporation :	1991
Legal Form :	Foreign Owned Enterprise
Line of Business :	Manufacturing and trading MSG (Monosodium Glutamate), Glutamic Acid, Sugar syrup, NaOH, HCP, etc.

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				VEDAN VIETNAM ENTERPRISE CORPORATION LIMITED
Vietnamese name				CONG TY CO PHAN HUU HAN VEDAN VIETNAM
Abbreviated name				VEDAN VIETNAM
Legal status				100% Foreign Owned Enterprise
Founded				1991
Year of operation				1994
The first license				No. 171/GP
Date of Issuance				August 1^st 1991
Place of Issuance				National Committee of Co-operation and Investment (Ministry of Planning and Investment currently)
Re-issued License				No. 171A/GP
Date of Issuance				March 8^th 1991
Place of Issuance				National Committee of Co-operation and Investment (Ministry of Planning and Investment currently)
The last adjustment License				No. 171A/GPDC21
Date of Issuance				June 09^th 2006
Place of Issuance				Ministry of Planning and Investment
Current investment capital				USD 452,600,000
Current legal capital				USD 139,058,722
Original Investment capital				USD 183,909,000
Original legal capital				USD 32,000,000
Tax code				3600239719-1
Investment duration				50 years
Total Employees				2,200 persons (Including officers & workers)
Qualification				Fair
Productivity				5,500 tons of glutamate and 40,000 tons of NAOH per month
ADDRESSES
Head office & Factory Location
Address		National Road 51, 1A Hamlet, Phuoc Thai Commune, Long Thanh Dist, Dong Nai Province
Country		Vietnam
Tel		(84-613) 825111
Fax		(84-613) 543160
Area		120 hectares
Email		vnmkt@vedaninternational.com
Website		www.vedan.com.vn
Branch in Hanoi
Address			No.19-20, M13 Lang Trung Str., Dong Da Dist, Hanoi city
Tel			(84-4) 835 9557 / 835 9558
Fax			(84-4) 835 9560
Contact person			Mr. KOU TING HONG
Branch in Binh Phuoc Province
Address			Long Phu Str, Bu Nho ward, Phuoc Long Dist, Binh Phuoc province
Tel			(84-651) 777627
Fax			(84-651) 777631
Main operation			Manufacturing starch
Starch processing factory in Binh Thuan province
Address			Tan Lap ward, Ham Thuan Nam Dist, Binh Thuan province
Tel/ Fax			(84-62) 869371
Director			Mr. HUANJG LIANG MING
Founded			2004
Main operation			Manufacturing starch
Starch processing factory in Ha Tinh province
Address			My Tan Village, Ki Son Ward, Ky Anh Dist., Ha Tinh Province
Tel			(84-39) 866385
Main operation			Manufacturing starch
Contact person			Mr. CHANG JUNG CHON
Factories
At the moment, the subject has a bio - tech and food industrial complex in Phuoc Thai Hamlet, Dong Nai province with the area of 120 hectares, including:
1. MSG & Glutamic acid Factory
2. Lysine Factory
3. Acid & Soda Factory
4. Electric Factory
5. Phuoc Thai Port
6. Starch & Syrup Factory
At the end of 2005, the subject built a fertilizer factory in Dong Nai province, Veyu in Gia Lai and a Starch Factory in Ha Tinh province with the total investment capital of 12 million USD.
DIRECTORS
1. NAME			Mr. YANG TOU HSIUNG (DUONG DAU HUNG in Vietnamese)
Position			Chairman of board of directors
Qualification			Management
Nationality			Taiwanese
Note			Mr. YANG TOU HSIUNG is also the chairman of board of directors of VEDAN INTERNATIONAL (HOLDING) LIMITED incorporated in the Cayman Islands.
2. NAME			Mr. JOEL.J.WANG (VUONG TRIEU THU in Vietnamese)
Position			General Director
Qualification			Management
Nationality			Taiwanese
3. NAME			Mr. KOU TING HONG (QUACH DINH HONG in Vietnamese)
Position			Chief of Hanoi Branch
Qualification			Management
Nationality			Taiwanese
BUSNESS NATURES AND ACTIVITIES
The subject is specializing in manufacturing and trading in the following products: MSG (monosodium glutamate), glutamic Acid, Sugar syrup, NaOH, HCP, , etc High-grade starch, Lysine, caustic soda 45%, 32%, bleaching agent Agricultural products such as additives for cattle feed and fertilizer. Power plant 72MW
QUALITY CERTIFICATES
The subject has granted many awards including:
- Award from the Prime Minister in the “Quality Award in Science and Technology”; Vietnam Gold Quality Award from the Ministry of Science and Technology in December 2004. - Outstanding Exporter in 2003 and 2004 by the Ministry of Trade - Award for the “Outstanding Tax Payer” by the Ministry of Finance in March 2004
IMPORT & EXPORT ACTIVITIES
IMPORT: The subject imports sugar and industrial salt from Taiwan, Japan, and Australia for production. The subject also uses many local materials for production. Its import activities are not remarkable.
EXPORT: The subject exports its products to Taiwan, Japan, China, Hong Kong, Korea, Thailand, India, and Australia.
BANKERS
1. INDUSTRY AND COMMERCIAL BANK OF VIETNAM (ICB) – BRANCH IN DONG NAI
Address					No. 77B, Hung Dao Vuong Str, Bien Hoa City, Dong Nai province
Tel					(84-613) 822851
2. VIETNAM BANK FOR FOREIGN TRADE (VCB)- BRANCH IN DONG NAI
Address					No. 77C, Hung Dao Vuong Str., Bien Hoa City, Dong Nai province
Tel					(84-613) 822539
Facsimile					(84-613) 824191
Telex					611103 VCB DN - VT
Swift					BFTVVNVX 012
3. VIETNAM COMMERCIAL JOINT STOCK EXPORT- IMPORT BANK (VIETNAM EXIMBANK)-BRANCH IN DONG NAI
Address					No.77, Hung Dao Vuong Str, Bien Hoa city, Dong Nai province
Tel					(84-613) 946152/ 947184
Fax					(84-613) 819178/ 827228
Website					www.icb.com.vn
SWIFT					BFTVVNVX
Contact Person					MR. NGUYEN NGOC CHAU
Note: Beside these banks, the Subject also has accounts in some other banks such as ABN-AMBRO BANK; INDOVINABANK; HONGKONG SHANGHAI BANK CORPORATION, CHINFON BANK, and BANKOK BANK.
SHAREHOLDERS
The Subject is a 100% Foreign Owned Enterprise. Following is its investor:
NAME						BURGHLEY ENTERPRISES PTE., LTD (SINGAPORE)
Address						No. 51, Goldhill Plaza#18-05, Singapore, 308900
Country						Singapore
Contribution						100%
Representative						YANG TOU HSIUNG
Note: Formerly, the subject was belonged to VEDAN ENTERPRISE CORPORATION – TAIWAN. In 2002, following the foreign investment law in Vietnam, revised law and degree No.24/2000/ND-CP of Government, the subject was transferred to BURGLEY ENTERPRISE PTE. LTD - SINGAPORE. This corporation now holds 100 percent of the subject’s shares. Following is some information on VEDAN CORPORATION:
NAME						VEDAN ENTERPRISE CORPORATION - TAIWAN
Abbreviated name						VEDAN GROUP
Address						No. 65, Hsin An Road, Shalu, Taichung
Country						Taiwan
Tel						++886 4 26622111
Fax						++886 4 26627351, 266 55 063
Email						vdi@vedaninternational.com
Website						www.vedaninternational.com
FINANCIAL DATA
Unit: 1,000,000 VND
BALANCE SHEET
Balance Sheet Date							31/12/2006	31/12/2005
Number of Weeks							52	52
ASSETS
A. Current assets & Short term Investment							1,710,536	1,476,531
I. Cash and cash equivalents							151,891	156,782
II. Short term investment							0	0
1. Short-term securities investment							0	0
2. Other short-term investment							0	0
3. Provision for discount on value of short-term investment							0	0
III. Receivables							600,845	586,762
1. Receivables from customers							573,706	507,427
2. Prepaid for providers							4,898	22,752
3. Value-added tax deducted								25,652
4. Internal receivables								0
5. Other receivables							37,469	48,233
6. Provision for bad receivables							-15,228	-17,302
IV. Inventory							928,718	732,987
1. Purchased goods in transit
0	0
2. Inventory raw materials								734,588
3. Inventory appliance								0
4. Cost of production and business in process								0
5. Inventory finished products								0
6. Inventory cargoes							929,384	0
7. Entrusted goods for sale							0	0
8. Provision for devaluation of stocks							-666	-1,601
V. Other current assets							29,082	0
1. Advances
0	0
2. Prepaid expenses							25,149	0
3. Pending expenses for transfer								0
4. Pending assets							3,933	0
5. Hypothecation, collateral and short run collateral							0	0
VI. Administrative							0	0
1. Administrative expenses for previous year							0	0
2. Administrative expenses for current year							0	0
B. Fixed assets & Long term investment:							1,891,971	2,069,649
I. Fixed assets							1,697,399	1,704,771
1. Tangible fix assets							1,694,394	1,704,771
+ Original cost							6,904,038	6,559,576
+ Accumulated depreciation value							-5,209,644	-4,854,805
2. Financial leasing fixed assets							0	0
+ Original cost							0	0
+ Accumulated depreciation value							0	0
3. Intangible fix assets							3,005	0
+ Original cost							4,218	0
+ Accumulated depreciation value							-1,213	0
II. Long term investment							101,387	151,483
1. Long-term securities investment							93,410	0
2. Joint-venture capital contribution							0	0
3. Other long-term investment							7,977	151,483
4. Provision for long-term investment devaluation							0	0
III. Construction in progress							50,687	186,507
IV. Long term prepaid expense							42,498	26,888
TOTAL ASSETS:							3,602,507	3,546,180
LIABILITIES
A. Payables:							1,289,000	1,459,483
I. Short term payables							945,595	986,621
1.Short-term borrowings							599,193	573,157
2. Due long-term liabilities							271,637	0
3. Payable to seller							5,547	338,601
4. Prepayment of buyer							4,005	12,585
5. Taxes and accounts dutiable							17,292	9,492
6. Employee payments							47,037	16,282
7. Internal payments							0	0
8. Other payables							884	36,504
II. Long term payables							343,405	472,862
1. Long-term borrowing							0	472,862
2. Long-term loans							343,405	0
III. Other liabilities							0	0
1. Disbursement payable								0
2. Pending assets							0	0
3. Receipts long-term collateral and deposit							0	0
B. Owner’s Equity:							2,313,507	2,086,697
I. Capital and Funds							2,313,507	2,086,697
1. Working capital							1,892,800	1,823,730
2. Differences from assets revaluation							0	0
3. Exchange rate differences							0	0
4. Business development fund							0	0
5. Reserved fund							0	0
6. Retained profit							420,707	262,967
7. Construction capital sources							0	0
II. Other administrative and fund sources							0	0
TOTAL LIABILITY AND EQUITY							3,602,507	3,546,180
PROFIT & LOSE ACCOUNTS
Description							FY 2006	FY 2005
Total revenue							3,926,123	3,634,745
Deductions Items							0	0
1. Net revenue							3,926,123	3,634,745
2. Original rate of goods for sale							3,092,530	3,010,278
3. Combined Profit							833,593	624,467
4. Sales costs							188,721	190,654
5. Enterprise administrative costs							156,959	144,120
6. Net income from business operation							487,913	289,693
Income from financial activities							9,847	9,932
Costs for financial activities							86,276	63,136
7. Net income from financial operation							-76,429	-53,204
Irregular income							12,540	52,432
Irregular expenditure							17,592	43,449
8. Irregular Profit							-5052	8,983
9. Total pre-tax profit							406,432	245,472
10. Income tax							64746	35,020
11. After tax profit							341,686	210,452
FINANCIAL FACTORS
Description							FY 2006	FY 2005
Current Liquidity Ratio							1.81	1.50
Quick Liquidity Ratio							0.83	0.75
Inventory Circle							3.72	4.11
Average Receivable Period (days)							55.86	58.92
Utilizing Asset performance							1.09	1.02
Liabilities / Total Assets (%)							35.78	41.16
Liabilities / Owner’s Equity (%)							55.72	69.94
Income before tax/ Total assets (%) ROA							11.28	6.92
Income before tax/ Owner’s Equity (%) ROE							17.57	11.76
Gross Profit / Total revenue (%) GPM							10.35	6.75
Income before tax / Total revenues (%) NPM							21.23	17.18
FINANCIAL HIGHLIGHTS OF 2004, 2003
Description							FY 2004	FY 2003
Unit							USD	USD
Total revenue							203,211,716.86	187,801,398.90
6. Net income from business operation							32,535,663.69	20,807,967.28
7. Net income from financial operation							-1,750,343.36	-3,763,739.89
8. Irregular Profit							1,146,657.18	2,028,180.27
9. Total pre-tax profit							31,931,977.51	19,440,110.66
10. Income tax							4,892,264.37	3,237,075.75
11. After tax profit							27,039,713.14	16,203,034.91
PAYMENT HISTORY AND EXPERIENCES
Trade Morality						Fairly good
Liquidity						Fairly good
Previous Payments status						Fairly prompt
Current Payment status						Prompt
Past Financial Situation						Fairly good
Current Financial Situation						Bright
Legal Action						Recorded
Decided by						People’s committee of Tay Ninh province
Bankruptcy						No recorded
Sales methods						Sell directly to agency or export
Methods of payment						Payment through banks system by L/C, T/TR, D/A, D/P
Note: In 1998, the subject involved in the case of environment claim. However, the subject won the case.
INTERPRETATION
VEDAN Enterprises Corporation of Taiwan was founded in 1954 in Shalu, Taichung, Taiwan. The business operations of Vedan corporation are diversified such as instant noodles, prepared food, chloral, beverages, construction, banking, stock securities and entertainment. The group decided to invest in Vietnam in 1991. However, VEDEN Vietnam was transferred to BURGLEY ENTERPRISE PTE. LTD - SINGAPORE. This corporation now holds 100 percent of the subject’s shares. VEDAN Vietnam Enterprise Corporation Limited is located in Phuoc Thai village, Long Thanh district Dong Nai province, about 70 kilometers far from the southeast of Ho Chi Minh city. The subject is specializing in manufacturing & export of products: MSG (monosodium glutamate), high-grade starch, lysine, chlori-alkali and fertilizers. At present, the subject has a large system of plants that is a food and biotech industrial complex on the area of 120 hectares in Dong Nai province, Vietnam, including MSG plant, starch and glucose syrup plant, modified starch plant, chlor-alkali plant, lysine plant, co-generating power plant, and fertilizer factory. The subject’s facilities and premises are fairly good and standard. It has sewage treatment systems, a 60,000 m3 water reservoir, VEDAN Phuoc Thai port, and exclusive roads that provide connection to the public road system, as well as administrative, housing and recreational facilities. The subject’s co-generating power plant does not only generate electricity for its production need but also sells to Vietnam Electricity Company to compensate the electricity shortage in Vietnam. The subject has been one of the 10 biggest foreign invested projects in Vietnam so far. In January 2006, the subject completed a three store buildings for seasonings production plant, a technology research and development center and the group’s production management department. The subject also put into operation a wet starch production line in Binh Thuan plant with capacity of 200 tons of wet starch daily in December 2004. In 2006, the new starch factory with capacity of 20,000 tons per year was put into operation in Gia Lai Province. It is estimated that the new starch factory in Ha Tinh Province will be operated in 2007. In 2007, the management board focus on enhancing relationship with local sugar manufacturer, expanding material source, boosting planting and development of trees producing sugar, expanding consumer market, etc. Recently, the subject uses many local materials for production. It does not import much. The subject helps farmers by giving interest-free loans to grow wheat for production. The management capability of the subject is fairly good. Its turnover and profit are high. The turnover increased year after year. In 2005, due to the increase on material price, the subject’s profit is not as high as profit in 2006. The solvency is fairly good. The quick liquidity ratios are maintained at about 0.79% in two consecutive years from 2005 to 2006. The capital structure is good for creditors. Total assets are invested year after year by owner’s equity. The subject’s fixed assets are invested much. This thing improved that the subject commits to operate in Vietnam. The sales operations are busy and its market share is remarkable. The subject is one of the foreign companies that contribute much to the state budget annually. Its current position in the industry is good and the future development seems bright. In general, the subject is a fairly strong company. General unfavorable circumstances will not cause fatal effects. It has ability to meet financial commitment. No caution needed for small & normal business transaction.

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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