MIRA INFORM REPORT

Report Date :

12.09.2007

IDENTIFICATION DETAILS

Name :	NGHE AN TEA DEVELOPMENT INVESTMENT COMPANY
Registered Office :	Km 4, No. 376 Nguyen Trai Str, Vinh City, Nghe An Province
Country :	Vietnam
Financials (as on) :	31.12.2006
Date of Incorporation :	1992
Legal Form :	State Owned Company
Line of Business :	Growing, processing, trading in tea to export. Trading in materials, spare parts equipment for tea producing.

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			NGHE AN TEA DEVELOPMENT INVESTMENT COMPANY
Vietnamese name			CONG TY DAU TU PHAT TRIEN CHE NGHE AN
Trade Name			NGHEAN TEA
Type of Business			State Owned Company
Founded			1992
Business Registration			104717
Issued on			December 29^th, 1992
Issued by			Nghe An Planning and Investment Department
Charter Capital			7,195,000,000 VND
Tax Code			2900326223-1
Total Employees			1,400 People
Qualification			Normal
ADDRESS
Head Office:
Address		Km4, No. 376 Nguyen Trai Str, Vinh City, Nghe An Province
Tel		(84-38) 851555
Fax		(84-38) 3851242
Email		natea@hn.vnn.vn
DIRECTORS
1. NAME		Mr. HO NGOC SY
Position		Director
Address		Vinh City, Nghe An Province
Hand Phone		+84913274088
Nationality		Vietnamese
2. NAME		Mr. HO VIET AN
Position		Deputy Director
Address		Vinh City, Nghe An Province
Nationality		Vietnamese
BUSINESS NATURE AND ACTIVITIES
The subject focuses on the business lines:
Growing, processing, trading in tea to export Trading in materials, spare parts equipment for tea producing Tea growing project of Nghe An province.
IMPORT & EXPORT ACTIVITIES
IMPORT: N/A
EXPORT: The Subject mainly exports to Czech, Russia, Kazakstan, Pakistan, Kenya …
BANKERS
1. BANK FOR FOREIGN TRADE OF VIETNAM
Address	No. 9 Nguyen Sy Sach Str, Vinh City, Nghe An province
Tel	(84-38) 3842033
Fax	(84-38) 3842192
Director	Mr. NGUYEN DUY QUANG
2. INDUSTRIAL AND COMMERCIAL BANK OF VIETNAM – NGHE AN BRANCH
Address	No. 7 Nguyen Sy Sach Str, Vinh City, Nghe An Province
Tel	(84-38) 3842842
3. VIETNAM BANK FOR AGRICULTURE AND RURAL DEVELOPEMT
Address	No. 364 Nguyen van Cu Str, Vinh City, Nghe An Province
Tel	(84-38) 3843247
SHAREHOLDERS
The subject is state owned company. 100% share are owned by the State.
FINANCIAL DATA
BALANCE SHEET
Unit: VND million
Balance Sheet Date				31/12/2006
Number of Weeks				52
ASSETS
A. Current assets & Short term Investment				32,513
I. Cash and cash equivalents				3,846
II. Short term investment				0
III. Receivables				14,912
1. Receivables from customers				8,167
2. Prepaid for providers				6,496
3. Value-added tax deducted				36
4. Internal receivables				0
5. Other receivables				2,067
6. Provision for bad receivables				-1,854
IV. Inventory				12,595
1. Purchased goods in transit				14,410
2. Inventory raw materials				-1,815
3. Inventory appliance
4. Cost for production and business in process
5. Inventory finished products
6. Inventory cargoes
7. Entrusted goods for sale
8. Provision for devaluation of stocks
V. Other current assets				1,160
1. Advances				2
2. Prepaid expenses				537
3. Pending expenses for transfer				68
4. Pending assets				553
5. Hypothecation, collateral and short run collateral
VI. Administrative				0
1. Administrative expenses for previous year				0
2. Administrative expenses for current year				0
B. Fixed assets & Long term investment:				45,926
I. Fixed assets				32,989
1. Tangible fixed assets				25,522
+ Original cost				56,119
+ Accumulated depreciation value				-30,597
2. Fixed assets of financing credit				0
+ Original cost				0
+ Accumulated depreciation value				0
3. Intangible fixed assets				0
+ Original cost				0
+ Accumulated depreciation value				0
II. Long term investment				12,868
1. Long-term securities investment				0
2. Joint-venture capital contribution				188
3. Other long-term investment				12,680
4. Provision for long-term investment devaluation				0
III. Capital construction in process				7,467
IV. Other				69
TOTAL ASSETS				78,439
LIABILITIES
A. Payables:				63,561
I. Short term payables				25,111
1.Short-term borrowings				12,359
2. Due long-term liabilities				3,088
3. Payable to seller				409
4. Prepaid buyer				47
5. Taxes and accounts dutiable				3,555
6. Employee payments				4,792
7. Internal payments
8. Other payables				861
II. Long term payables				38,450
1. Long-term borrowing				38,450
2. Long-term loans
III. Other liabilities				0
1. Disbursement payable				0
2. Pending assets				0
3. Receipts long-term collateral and deposit				0
B. Owner’s Equity				14,878
I. Capital and Funds				13,425
1. Working capital				15,204
2. Differences from assets revaluation
3. Exchange rate differences				0
4. Business development fund				313
5. Reserved fund				0
6. Retained profit				-2,092
7. Construction capital sources				0
II. Other administrative and fund sources				1,453
1. Provident funds for unemployment				91
2. Welfare and reward funds				824
3. Management funds of higher level				538
4. Functional operation funds				0
5. Fund sources formed by fixed assets				0
TOTAL LIABILITY AND EQUITY				78,439
PROFIT & LOSE ACCOUNTS
Description				F/Y 2006
Total revenue				67,776
Deductions Items				0
- Discount
- Devaluation of sale price
- Return of sold goods
- Turnover tax, excise tax, import and export duties to be paid
1. Net revenue				67,776
2. Original rate of goods for sale				52,074
3. Combined Profit				15,702
4. Sales costs				6,158
5. Enterprise administrative costs				7,191
6. Net income from business activity				2,353
Income from financial activities				1,138
Costs for financial activities				2,573
7. Net income from financial operation				-1,435
Irregular income				226
Irregular expenditure				106
8. Irregular Profit				120
9. Total pre-tax profit				1,038
10. Income tax				0
11. After tax profit				1,038
FINANCIAL FACTORS
Description				2006
Current Liquidity Ratio				1.29
Quick Liquidity Ratio				0.79
Inventory Circle				4.13
Average Receive Period				80.31
Utilizing Asset Performance				0.86
Liability / Total Asset (%)				81.03
Liability / Owner's Equity (%)				427.21
Income Before Tax / Total Asset (%) ROA				1.32
Income Before Tax / Owner's Equity (%) ROE				6.98
Income Before Tax / Total Revenue (%) NPM				1.53
Gross Profit / Total Revenue (%) GPM				23.17
INTERPRETATION
Nghe An Tea Development Investment Company (Nghean Tea) is a state owned company, which was established in 1992 in Nghe An province, where is a Middle province of Vietnam. It has biggest area in the whole country covering with hills and mountains. The subject is specialized in growing, processing and exporting tea, trading in material and equipment for tea processing. At present, the subject has about tea 8,000 ha including districts of Nghe An province such as: Thanh Chuong, Anh Son, Con Cuong … Six enterprises are major in manufacturing and processing tea for the subject. Its products are black tea (CTC tea): BOP, BP1, PF1, PD, green tea, orthodox tea trademark …with Kim Lien badge (Native land of Ho Chi Minh President). Its products are mainly exported to Pakistan, Taiwan, UK, to Czech, Russia, Kazakstan, Kenya. At present, the subject is growing new variety tea: LDP1, LDP2, which are high productivity tea (14 – 16 tons per ha) and good quality, corresponding to mountains areas in the North of Vietnam. To be a state owned company, most of operations of the subject are depended on moderate policy of Province and Government. According to Mr. Ho Ngoc Sy – Director of the subject, the subject request to be changed to joint stock company model, but Nghe An province did not have acceptation. In general, the subject’s premises are very large. The subject is projecting and investing to expand area about tea 13,000 ha in 2010. Total number of workers is 1,400 persons. The management capacity of the subject is normal. The financial and operational based of the subject are normal. The business of the subject is stable and development. The subject has capacity to meet financial commitments. No caution needed for the small business transactions.

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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