MIRA INFORM REPORT

Report Date :

25.09.2007

IDENTIFICATION DETAILS

Name :	HA THANH COMPANY - MINISTRY OF DIFENCE
Registered Office :	No. 99, Le Duan Str, Hoan Kiem Dist, Hanoi City
Country :	Vietnam
Financials (as on) :	31.12.2006
Date of Incorporation :	1993
Legal Form :	State Owned Company
Line of Business :	Producing and trading porcelain, pottery, building material. Producing and trading furniture wood, plastic goods, forest products, industry foodstuff, nutrition foodstuff. Trading cars and trucks material for textile, textile machines

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					HA THANH COMPANY - MINISTRY OF DIFENCE
Vietnamese Name					CONG TY HA THANH - BO QUOC PHONG
Former name					THANG LONG COMPANY
Type of business					State owned company
Founded					1993
Established Decision					378/QD-QP
Issued on					July 27^th 1993
Issued by					Ministry of Defense
Belongs to					Ministry of Defense
Direct under management of					CAPITAL MILITARY ZONE
Working activities					Limited on Decision No. 460/QDQP on April 07^th 1996 by Ministry of Defense
Business registration No					0106000088
Issued on					August 10^th 1993
Re-issued on					June 21^st 2004
Issued by					Hanoi of Planning and Investment Department
Registered Capital					17,691,803,405 VND
Total Employees					400 employees
Tax code					No. 0100108529
Qualification					Fairly good
Note: According to Decision No. 245/2003/QD-BQP of the Ministry of Defence on September 29^th 2003, the subject changed its name from Thang Long company to Ha Thanh company and merged Long Giang company (address: No. 43, Lane 164, Vuong Thua Vu Str., Hanoi City, Tel: (84-4-5654932) into Ha Thanh company.
ADDRESSES
Head Office in Ha Noi
Address	No. 99, Le Duan Str, Hoan Kiem Dist, Hanoi city
Country	Vietnam
Tel	(84-4) 8224025- 9426608-9426909
Fax	(84-4) 8223440-9426608
SUBSIDIARIES/ BRANCHES
The subject has 9 branches and subsidiaries
1. Branch in Hochiminh City
Address	No. 157/38 D2 Str., 25 Ward, Binh Thanh Dist., Hochiminh City
Country	Vietnam
Tel	(84-8) 5106182
Fax	(84-8) 5106182
2. Branch in Quang Ninh Province
Address	Group 96, Ha Tu Ward, Ha Long City, Quang Ninh Province
Country	Vietnam
Tel	(84-33)834437
3. Branch in Hai Duong Province
Address	Chi Lang Str., Hai Duong City, Hai Duong Province
Country	Vietnam
Tel	(84-320)832310
4. Branch in Hai Phong Province
Address	No. 32, Hoang Van Thu Str., Hai Phong City
Country	Vietnam
Tel	(84-31)745161
5. Long Giang enterprise
Address	No 43, Group 164 Vuong Thua Vu Str, Hanoi City
Country	Vietnam
Tel	(84-4) 5654932
6. X18 enterprise (changed name from X81)
Address	No. 82, Group 164 Thinh Hao, Ton Duc Thang, Hanoi City
Country	Vietnam
Tel	(84-4)8234067
7. Enterprise No. 54
Address	Bat Trang, Gia Lam Dist., Hanoi City
Country	Vietnam
Tel	(84-4)8740479
Besides, the Subject has two enterprises with the name “Enterprise No.99” and “Enterprise No.56”
DIRECTORS
1. NAME	Mr. VU VAN CUONG
Position	Director
Resident	Hanoi City
Nationality	Vietnamese
2. NAME	Mr. PHAM KHAC TAN
Position	Deputy Director
Resident	Hanoi City
Nationality	Vietnamese
3. NAME	Mr. TRAN MINH TOAN
Position	Deputy Director
Resident	Hanoi City
Nationality	Vietnamese
4. NAME	Mr. NGUYEN HUY DUNG
Position	Deputy Director
Resident	Hanoi City
Nationality	Vietnamese
BUSINESS NATURE AND ACTIVITIES
The subject is specialized in following activities:
§ Producing and trading porcelain, pottery, building material, … § Producing and trading furniture wood, plastic goods, forest products, industry foodstuff, nutrition foodstuff, § Trading cars and trucks material for textile, textile machines § Building industry works and civil works, … § Producing and trading informatics equipments, civil electrical goods, … § Producing and trading animal food. § Importing and exporting machines, equipments, materials and consumers’ goods
IMPORT & EXPORT ACTIVITIES
IMPORT: The subject imports from South Korea (motor cars), China (chemical), France (steel),…
EXPORT: The subject exports to Japan, Germany, and Singapore…
BANKERS
1. VIETNAM BANK FOR FOREIGN TRADE - THANH CONG BRANCH
Address		No.30-32 Lang Ha Str., Hanoi City
Country		Vietnam
Tel		(84-4)7761812
2. MILITARY COMMERCIAL JOINT STOCK BANK (MCSB)
Address			No. 14C Ly Nam De Str, Hanoi City
Country			Vietnam
Telephone			(84-4)7331668
3. BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM
4. EXIMBANK-HAI BA TRUNG BRANCH
5. HABUBANK-XUAN THUY BRANCH
6. TECHCOMBANK-BA DINH BRANCH
7. LAO VIET JOINT VENTURE BANK-HANOI BRANCH
SHAREHOLDERS
The Subject is a State Owned Enterprise, which is under management of:
CAPITAL MILITARY ZONE
Address			No. 33B, Pham Ngu Lao Str, Hanoi city
Country			Vietnam
FINANCIAL DATA
BALANCE SHEET
Unit: VND Million
Balance sheet date						31/12/06	31/12/05		31/12/04
Number of weeks						52	52		52
ASSETS
A. Working assets & short-term Investment						310,657	246,728		223,566
I. Cash and cash equivalents						11,183	6,956		5,483
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 short-term investment						0	0		0
III. Receivables						102,277	101,094		99,364
1. Receivables from customers						61,893	50,727		49,104
2. Prepayment for providers						2,457	377		3,022
3. Value-added tax deducted						26,893	0		0
4. Internal receivables						0	23,390		24,656
5. Other receivables						11,034	26,600		22,582
6. Provision for bad receivables						0	0		0
IV. Inventory						170,684	135,036		115,236
1. Purchased goods in transit						0	0		0
2. Raw materials						0	0		0
3. Instrument, tools						0	0		0
4. Cost for production and business in process						0	0		0
5. End products						0	0		0
6. Goods						170,684	135,036		115,088
7. Goods on consignment						0	0		0
8. Provision for devaluation of stocks						0	0		148
V. Other current assets						26,513	3,642		3,483
1. Advances						6,020	0		0
2. Prepaid expenses						3,282	3,642		3,483
3. Pending expenses for transfer						0	0		0
4. Pending assets						17,211	0		0
5. Mortgage, collateral and short run collateral						0	0		0
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						16,850	18,139		19,831
I. Fixed assets						16,703	17,704		17,593
1. Tangible fixed assets						16,703	17,704		17,593
+ Original cost						31,017	30,755		29,144
+ Accumulated depreciation value						-14,314	-13,051		-11,551
2. Financial leasing fixed assets						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						79	79		229
1. Long-term securities investment						0	0		0
2. Joint-venture capital contribution						20	20		20
3. Other long-term investment						59	59		209
4. Provision for long-term investment devaluation						0	0		0
III. Capital construction in process						68	356		2,009
IV. Other						0	0		0
TOTAL ASSETS						327,507	264,867		243,397
LIABILITIES
A. Payable loans						312,599	250,291		229,096
I. Short term payables						308,318	243,317		219,188
1. Short-term borrowings						130,512	84,724		85,879
2. Due long-term liabilities						1,424	0		0
3. Payables to supplier						49,751	60,126		45,529
4. Prepayment of buyer						72,829	48,582		42,421
5. Taxes and accounts dutiable						4,672	4,994		3,612
6. Employee payments						266	264		167
7. Internal payables						27,993	25,433		26,373
8. Other payables						20,871	19,194		15,207
II. Long term loans						3,685	5,075		8,270
1. Long-term borrowings						0	5,075		8,270
2. Long-term payables						3,685	0		0
III. Other payables						596	1,899		1,638
1. Payable expenses						596	1,899		1,638
2. Pending assets						0	0		0
3. Receipts long-term collateral and deposit						0	0		0
B. Owner’s Equity						14,908	14,576		14,301
I. Capital and Funds						14,835	14,716		13,961
1. Working capital						18,506	18,709		18,105
2. Differences from asset revaluation						0	0		0
3. Exchange rate differences						0	0		0
4. Development investment funds						345	345		344
5. Reserved funds						64	64		64
6. Retained profit						-4,283	-4,402		-4,552
7. Construction capital sources						203	0		0
II. Other administrative and fund sources						73	-140		340
1. Provident funds for unemployment						0	0		0
2. Reward and welfare funds						37	46		92
3. Management funds of higher level						0	0		0
4. Functional operation funds						0	-186		45
5. Fund sources formed by fixed assets						36	0		203
TOTAL LIABILITY AND EQUITY						327,507	264,867		243,397
PROFIT & LOSE ACCOUNT (INCOME STATEMENT)
Description						F.Y 2006		F.Y 2005
Total revenue						744,134		615,099
Deductions Items						14		12
- Discount						0		0
- Devaluation						0		0
- Return of sold goods						0		0
- Turnover tax, Luxury tax & Export tax						14		12
1. Net revenue						744,120		615,087
2. Cost of goods sold						722,544		595,947
3. Gross Profit						21,576		19,140
4. Sales expenses						7,522		8,330
5. Enterprise administrative expenses						8,322		6,801
6. Net income from business activities						5,732		4,009
Income from financial activities						587		863
Expenditure from financial activities						6,115		4,706
7. Net income from financial operation						-5,528		-3,843
Irregular income						69		47
Irregular expenditure						108		5
8. Irregular Profit						-39		42
9. Total pre-tax profit						165		208
10. Income tax						46		58
11. After tax profit						119		150
FINANCIAL FACTORS
Description						FY 2006	FY 2005		FY 2004
Current liquidity ratio						1.01	1.01		1.02
Quick Liquidity ratio						0.45	0.46		0.49
Inventory circle						4.73	4.76		0.00
Average receive period						50.17	59.99		N/A
Utilizing Asset Performance						2.27	2.32		0.00
Liability/ Total Asset (%)						95.45	94.50		94.12
Liability/ Owner's equity (%)						2,096.85	1,717.14		1,601.96
Income before tax/ Total asset (%) ROA						0.05	0.08		0.00
Income before tax/ Owner's equity (%) ROE						1.11	1.43		0.00
Gross Profit / Total revenue (%) GPM						0.02	0.03		N/A
Income before tax/ Total revenue (%) NPM						2.90	3.11		N/A
PAYMENT HISTORY AND EXPERIENCES
Trade Morality				Normal
Liquidity				Normal
Previous Payments				Average
Current Payment status				Fairly prompt
Past Financial Situation				Normal
Current Financial Situation				Above average
Litigation data				No record
Bankruptcy				No record
Public opinion				Above average
Mode of Payment				Direct payment or through its corresponding bank
INTERPRETATION
The current name of the subject is Ha Thanh Company, it was changed its name and merged with Long Giang Company under the decision No. 245/2003/QD-BQP of Ministry of Defense, on September 29^th, 2003. At the moment, the subject has 9 branches and subsidiaries which belong to the headquarters of Capital Military Zone of the Ministry of Defense. The subject now specializes in general manufacturing and trading many kinds of goods. Its main import-export goods are porcelain, pottery, machines, equipments, materials and consumers’ goods. It has relationship with many foreign partners in Asia area (Singapore, Japan, Korea…) and Europe (Germany, France). As a state owned company, the subject has got much support and advantages from the Ministry of Defense. This is the primary factor that helps the subject operate effectively and develops. Although, the subject located in centre of Hanoi city, but he premises and facilities of the subject are normal. It has about 400 employees whole company. The management capacity of the subject is fairly good and strict. The business activities of the subject are stable and busy. It has won many contracts with other member of Ministry of Defense. The annual revenue of the subject is fairly high (nearly 700 billion VND), but its profit is not good, only about 200 million VND. In general, the subject is operating medium scale. Its business is fairly busy but not very effective. The development strategy of the company is getting more market share and the subject’s prospect of develop is expected more bright. Now, the subject has ability to meet normal & medium financial commitments. A little caution with big transactions
The company is expected to be VULNERABLE TO ADVERSE changes in circumstances and economic conditions.

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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