MIRA INFORM REPORT

Report Date :

19.09.2007

IDENTIFICATION DETAILS

Name :	BINH DINH SUGAR JOINT STOCK COMPANY
Registered Office :	Km 52, National Road 19, Tay Giang Commune, Tay Son Dist, Binh Dinh Province
Country :	Vietnam
Financials (as on) :	31.12.2006
Date of Incorporation :	1995
Legal Form :	Joint Stock Company
Line of Business :	Manufacture and trading white sugar, ethanol and related products from sugar cane plat Trading materials and equipments for sugar production Trading in oil, fertilizers, pesticide, agriculture products, alcohol

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	BINH DINH SUGAR JOINT STOCK COMPANY
Vietnamese Name	CONG TY CO PHAN DUONG BINH DINH
Trade Name	BISUCO
Type of Business	Joint Stock Company
Founded	1995
Established decision	387/QD-UB
Issued on	8^th March 1995
Issued by	Binh Dinh People’s Committee
Transform Decision	62/2003/QD-UB
Issued on	31^st March 2003
Issued by	Binh Dinh People’s Committee
Business Registration No.	3503000027
Issued on	31^st March 2003
Issued by	Binh Dinh Department of Planning and Investment
Registered Capital	34,000,000,000 VND
Tax code	4100480519
Total Employees	400
Qualification	Qualified
ADDRESS
Head Office
Address	Km 52, National Road 19, Tay Giang Commune, Tay Son Dist, Binh Dinh Province
Country	Vietnam
Tel	(84-56) 884379 / 884377
Fax	(84-56) 884380
DIRECTORS
1. NAME	Mr. PHAN NGOC LIEN
Position	General Director
Contact Address	Km 52, National Road 19, Tay Giang Commune, Tay Son Dist, Binh Dinh Province
Nationality	Vietnamese
2. NAME	Mr. PHAN LAM TUONG
Position	Vice General Director
Contact Address	Km 52, National Road 19, Tay Giang Commune, Tay Son Dist, Binh Dinh Province
Nationality	Vietnamese
3. NAME	Mr. RAMESH BABU
Position	Vice General Director
Contact Address	Km 52, National Road 19, Tay Giang Commune, Tay Son Dist, Binh Dinh Province
Nationality	Indian
BUSINESS NATURE AND ACTIVITIES
The subject registered in the following lines of business:
- Manufacture and trading white sugar, ethanol and related products from sugar cane plat - Trading materials and equipments for sugar production - Trading in oil, fertilizers, pesticide, agriculture products, alcohol - Manufacture of package, artificial plank - …
IMPORT & EXPORT ACTIVITIES
IMPORT: The subject imports from India, Singapore
EXPORT: N/A
BANKERS
BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM – BINH DINH BRANCH
Address	No. 72 Le Duan Str, Quy Nhon City, Binh Dinh Province
Country	Vietnam
Tel	(84-56) 520009/ 520017
Fax	(84-56) 520033
Account no.	7301-1129G
SHAREHOLDERS
Current Shareholder
1. Name	NAGARJUNA INTERNATIONAL VIETNAM LIMITED
Address	No. 10A Cuu Long Str, Tan Binh Dist, Ho Chi Minh City
Country	Vietnam
Tel	(84-8) 8489401
Fax	(84-8) 8485562
Share	90%
Value	30,600,000,000 VND
Note: Nagarjuna is Indian based company. It invested and operated at factory in Long An Province and Head office in Ho Chi Minh city. It holds share on the subject through its people in Management Board of the subject.
2. Name	Other shareholder
Share	10%
Value	3,400,000,000 VND
Previous Shareholder
1. Name	BINH DINH PEOPLE’S COMMITTEE
Address	No. 1 Tran Phu Str, Quy Nhon City, Binh Dinh Province
Tel	(84-56) 821804
Fax	(84-56) 822057
Share	78.88%
Value	26,819,300,000 VND
2. Name	Staffs of the subject
Nationality	Vietnamese
Share	13.38%
Value	4,547,800,000 VND
3. Name	Outside Investors
Share	7.74%
Value	2,632,900,000 VND

PAYMENT HISTORY AND EXPERIENCES
Trade Morality	Average
Liquidity	Weak
Payments	Average
Financial Situation	Average
Development trend	Above Average
Litigation Data	No reported
Bankruptcy	No reported
Payment Method	TT
Sale Method	Supplying for agent and customers
FINANCIAL DATA
BALANCE SHEET
Unit: Million VND
Balance sheet date		31/12/06		31/12/05
Number of weeks		52		52
ASSETS
A. Working assets & short-term Investment		64,449		38,445
I. Cash and cash equivalents		4,914		16,034
II. Short-term investment		0		0
1. Short-term securities investment		0		0
2. Other short-term investment		0		0
3. Provision for short-term investment		0		0
III. Receivables		12,940		13,093
1. Receivables from customers		2,670		3,004
2. Prepayment for providers		951		1,542
3. Value-added tax deducted		175		2,983
4. Internal receivables		0		0
5. Other receivables		9,144		5,971
6. Provision for bad receivables		0		-407
IV. Inventory		46,395		8,335
1. Purchased goods in transit		0		0
2. Raw materials		0		0
3. Instrument, tools		0		0
4. Cost for production and business in process		0		0
5. End products		0		0
6. Goods		46,395		8,335
7. Goods on consignment		0		0
8. Provision for devaluation of stocks		0		0
V. Other current assets		200		983
1. Advances		0		418
2. Prepaid expenses		0		0
3. Pending expenses for transfer		0		0
4. Pending assets		0		0
5. Mortgage, collateral and short run collateral		200		449
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		103,293		103,825
I. Fixed assets		72,570		77,263
1. Tangible fixed assets		72,383		77,012
+ Original cost		116,058		109,156
+ Accumulated depreciation value		-43,675		-32,144
2. Financial leasing fixed assets		0		0
+ Original cost		0		0
+ Accumulated depreciation value		0		0
3. Intangible fixed assets		187		251
+ Original cost		330		330
+ Accumulated depreciation value		-143		-79
II. Long term investment		26,288		20,386
1. Long-term securities investment		0		0
2. Joint-venture capital contribution		14,388		11,280
3. Other long-term investment		11,900		9,106
4. Provision for long-term investment devaluation		0		0
III. Capital construction in process		3,822		3,691
IV. Other		613		2,485
TOTAL ASSETS		167,742		142,270
LIABILITIES
A. Payable loans		109,732		96,333
I. Short term payables		87,188		59,694
1. Short-term borrowings		65,546		39,352
2. Due long-term liabilities		0		0
3. Payables to supplier		6,794		10,551
4. Prepayment of buyer		1,094		9
5. Taxes and accounts dutiable		2,310		1,672
6. Employee payments		1,083		1,276
7. Payable expenses		3,502		102
8. Other payables		6,859		6,732
II. Long term loans		22,544		36,639
1. Long-term borrowings		22,544		36,639
2. Long-term payables		0		0
III. Other payables		0		0
1. Payable expenses		0		0
2. Pending assets		0		0
3. Receipts long-term collateral and deposit		0		0
B. Owner’s Equity		58,010		45,937
I. Capital and Funds		59,251		46,166
1. Owner’s investment capital		34,000		34,000
2. Other owner’s capital		5,243		4,894
3. Exchange rate differences		0		0
4. Development investment funds		1,536		313
5. Reserved funds		980		980
6. Retained profit		17,492		5,979
7. Construction capital sources		0		0
II. Other administrative and fund sources		-1,241		-229
1. Provident funds for unemployment		0		0
2. Reward and welfare funds		-1,279		-267
3. Management funds of higher level		0		0
4. Functional operation funds		0		0
5. Fund sources formed by fixed assets		38		38
TOTAL LIABILITY AND EQUITY		167,742		142,270
PROFIT & LOSE STATEMENT
Description				FY 2006
Total Revenues				177,562
Deductions Items				821
- Discount				0
- Devaluation				0
- Return of sold goods				821
- Turnover tax, luxury and export taxes				0
1. Net Revenue				176,741
2. Cost of Goods Sold				145,637
3. Gross Profit				31,104
4. Income from financial activities				1,700
5. Expense from financial activities				8,383
In there: Interest expense				8,383
6. Sale expense				2,617
7. Administration expense				5,622
8. Income from business activities				16,182
9. Other incomes				260
10. Other expenses				56
11. Other profit				204
12. Total profit before tax				16,386
13. Income tax				3,250
14. Profit after income tax				13,136
FINANCIAL FACTORS
Description			FY 06	FY 05
Current liquidity ratio			0.74	0.64
Quick Liquidity ratio			0.21	0.50
Inventory circle			5.32	-
Average receive period			26.72	N/A
Utilizing Asset Performance			1.05	-
Liability/ Total Asset (%)			65.42	67.71
Liability/ Owner's equity (%)			189.16	209.71
Income before tax/ Total asset (%) ROA			14.77	-
Income before tax/ Owner's equity (%) ROE			42.70	-
Gross Profit / Total revenue (%) GPM			17.52	N/A
Income before tax/ Total revenue (%) NPM			13.95	N/A

RATINGS & CREDIT RECOMMENDATIONS
The following ratings and credit recommendations are made by C&R Vietnam basing on our weights and ratios. We give the comments after serious study on the subject by our interviews with the management officers, site checks and with all available data from our own sources.
Factor			Criterion		Evaluated Score	Total Score
Management Factors					18	30
			Organization		6	10
			Facilities		6	10
			Management Capabilities		6	10
Financial Factor					25	40
Other Factors					18	30
			Trademark		6	10
			Current Position in the Industry		6	10
			Future Prospect		6	10
Total Evaluated Scores					61	100
With total scores of 61, the Subject is graded at: BBB
C&R VIETNAM CREDIT RATING SCORES
Score	Rating	Summary		Description
91-100	AAA	Highest		The company has EXCEPTIONAL STRONG capacity for timely payment of all its financial commitments.
81-90	AA	Very high		The company has VERY STRONG capacity to meet its financial commitments but carries a higher risk than AAA companies.
71-80	A	High		The company has STRONG capacity to meet its financial commitments, but has less stability than higher rated companies.
61-70	BBB	Good		The company has ADEQUATE capacity to meet financial commitments but less stability than higher rated companies.
51-60	BB	Above Average		The company is expected to be VULNERABLE TO ADVERSE changes in circumstances and economic conditions.
41-50	B	Average		The company’s stability is expected to be IMPAIRED by adverse changes in circumstances and economic conditions.
31-40	CCC	Below Average		The company’s capacity for meeting financial commitments is SOLELY RELIANT UPON favorable conditions.
21-30	CC	Poor		The company manages to operate but posing HIGH default risk.
11-20	C	Very Poor		The company is posing VERY HIGH default risk.
1-10	D	Default		The company is DEFAULTED.

INTERPRETATION

The subject was a state owned company. It was established in 1993 following the decision of Binh Dinh People’s Committee. In 2003, the State decided to transform the operation of the subject into joint Stock company but the State still holds large amount of shares. On May 2006, the State has sold out its entire share through the public auction in Ho Chi Minh Security Trading Centre. At present, the subject is joint stock company operation in production and trading white sugar products and related materials. The current position in the industry of the subject seems above average.

The sugar production industry in Vietnam including about 44 companies, which mostly located in Southern provinces of Vietnam. The industry which uses large area for growth materials is one of the important sectors of Vietnam economy. The Vietnam sugar production industry is development but it seems not very stable. All most sugar production companies has serious problems in financial investments, many of them get loss for long time and likely bankruptcy.

The subject like almost other companies in the industry. In the first time of establishment, the capital of the subject was VND 40 Billion. After the loss time, it reduced the capital by VND 34 Billion. The subject invested capital into some projects such as plywood factory, ethanol factory, fertilizer factory … These projects seems not effective and the plywood factory has to close.

Since the time of State no longer keeping share on the subject, the operation of the subject seems upward trend. The main shareholder of the subject restructured the operation of management board and reduces the number of employees. At present, the products of the subject focus in sugars, the market share of the subject mainly in Southern province of Vietnam. The turnover of the subject in 2006 seems good. The management capacity of the subject is above average. The subject applied ISO 9001:2000 for the management system and ISO 14000 for the environment protection. Its future prosperity seems good.

In general, the operation and finance of the subject regards good. The business of the subject is stable and development. The subject has capacity to meet the normal financial commitments, no caution needed for the normal business transactions.

The company has ADEQUATE capacity to meet financial commitments.

CREDIT ENQUIRY: 1,500,000 USD

Caution needed

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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