MIRA INFORM REPORT

Report Date :

12.12.2008

IDENTIFICATION DETAILS

Name :	DUC GIANG CHEMICAL AND DETERGENT POWDER JOINT STOCK COMPANY
Registered Office :	No. 18, Lane 44 Duc Giang Str, Thuong Thanh Ward, Long Bien Dist, Hanoi city
Country :	Vietnam
Financials (as on) :	31.12.2007
Year of Establishment :	1993
Com. Reg. No.:	0103003850
Legal Form :	Joint Stock Company
Line of Business :	Manufacture and Trading in Chemical Material, Detergent with “Duc Giang” brand. Manufacture and Trading in Rubber, Paint, Plastic, Fertilizer, Ferrous Metals. Manufacture and Trading in Machinery, Electricity Equipment Manufacture and Trading in Mineral Fuel, Mineral Wax

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 :	No Complaints
Litigation :	Clear

SUBJECT IDENTIFICATION & LEGAL FORM
English Registered Name		DUC GIANG CHEMICAL AND DETERGENT POWDER JOINT STOCK COMPANY
Vietnamese Registered Name		CONG TY CO PHAN BOT GIAT VA HOA CHAT DUC GIANG
Trade Name		DGC ., JSC
Current Type of Business		Joint Stock Company
Former Type of Business		State Owned Company
Founded		1993
Equitization Decision		No. 10/2004/QD- BCN
Issuance on		February 13^th 2004
Issuance by		Ministry of Industry
Business Registration		No. 0103003850
Issuance on		May 3^rd 2004 (last revised on November 05^th 2008)
Issuance by		Hanoi Department of Planning and Investment
Current registered capital		30,000,000,000 VND
Former Registered Capital		15,000,000,000 VND
Legal capital		6,000,000,000 VND
Tax Code		0101452588
Total Employees		223 employees
ADDRESSES
Head Office and factory:
Address		No. 18, Lane 44 Duc Giang Str, Thuong Thanh Ward, Long Bien Dist, Hanoi city
Country		Vietnam
Tel		(84-4) 38271620
Fax		(84-4) 38271068
Email		ducgiangchemco@hn.vnn.vn
Binh Duong Factory
Address	Road No. 5, Dong An Industrial Zone, Binh Hoa Dist, Binh Duong Province
Country	Vietnam
Tel	(84-650) 3756576
Fax	(84-650) 3756576
Business license	No. 4613000061
Tax code	No. 0101452588- 001
Contact person	Mr. HOANG MANH HUNG
Lao Cai Factory
Address	Tang Loong Commune, Bao Thang Dist, Lao Cai Province
Country	Vietnam
Tel	(84-20) 3863282
DIRECTORS
1. NAME	Mr. DAO HUU HUYEN
Position	Director
Date of birth	June 07^th 1956
ID No.	011686105
Issuance on	October 01^st 2001
Issuance by	Police Station of Hanoi City
Resident	No.55 Phung Hung, Hang Ma Ward, Hoan Kiem Dist, Hanoi City
Nationality	Vietnamese
2. NAME	Mr. QUACH TIEN NHAT
Position	Deputy Director
Date of birth	1950
Resident	Hanoi city
Nationality	Vietnamese
3. NAME	Ms. DAO THI MAI
Position	Chief accountant
Resident	Hanoi city
Nationality	Vietnamese

BUSINESS NATURE AND ACTIVITIES
The subject registers and operates in the following business activities: - - Manufacture and trading in chemical material, detergent with “Duc Giang” brand - - Manufacture and trading in rubber, paint, plastic, fertilizer, ferrous metals - - Manufacture and trading in machinery, electricity equipment - - Manufacture and trading in mineral fuel, mineral wax
IMPORT & EXPORT ACTIVITIES
IMPORT:
Goods		Phosphate, phosphoric acid, …
Market		Malaysia, Korea, Japan, India
Payment		L/C, T/T
EXPORT:
Goods		LAB, sulfur, electrode
Market		Korea, China, Singapore, India
Payment		L/C, T/T
BANKERS
1. VIETINBANK
Address		Quan Chinh Str, Gia Lam Dist, Hanoi city
Tel		(84-4) 38735055
Fax		(84-4) 38273836
Telex		412259 ICBV-VT
SWIFT		ICBVVNVX
Account No.		10201 00000 48561
2. VIETCOMBANK – HANOI BRANCH
Address		No.334 Ba Trieu Str, Hai Ba Trung Dist, Hanoi city
Country		Vietnam
Tel		(84-4) 9423038
SHAREHOLDER(S)
The subject is a Joint Stock Company, following are founder shareholders of the subject. Its registered capital is 30 billion VND (value: 100,000 VND/ 1share)
1. Name	VIETNAM NATIONAL CHEMICAL CORPORATION
Trade Name	VINACHEM
Business Registration No.	0106000836
Address	No. 1A, Trang Tien Str, Hoan Kiem Dist, Hanoi
Country	Vietnam
Tel	(84-4) 38240551
Fax	(84-4) 38252995
Representative person	Mr. LAI CAO HIEN
Passport No.	S0001096
Resident	No. 41B Hoang Hoa Tham Str., Buoi Ward, Tay Ho Dist, Hanoi City
Nationality	Vietnamese
Share	63,000 VND
Value	6,300,000,000 VND
2. Name	OTHER 142 SHAREHOLDERS
Position	Shareholder
Ratio	79%
Value	11,850,000,000 VND

FINANCIAL DATA
BALANCE SHEET
Unit: VND Million
Balance sheet date			31/12/2007	31/12/2006
Number of weeks			52	52
ASSETS
A – CURRENT ASSETS			57,811	60,365
I. Cash and cash equivalents			3,337	15,980
1.Cash			3,337	15,980
2.Cash equivalents			0	0
II. Short-term investments			0	0
1. Short-term investments			0	0
2. Provisions for devaluation of short-term investments			0	0
III. Accounts receivable			25,848	17,701
1. Receivable from customers			24,739	14,546
2. Prepayments to suppliers			1,267	486
3. Inter-company receivable			0	3,157
4. Receivable according to the progress of construction			0
5. Other receivable			441	134
6. Provisions for bad debts			-599	-622
IV. Inventories			23,434	26,227
1. Inventories			23,434	26,227
2. Provisions for devaluation of inventories			0	0
V. Other Current Assets			5,192	457
1. Short-term prepaid expenses			0	0
2. VAT to be deducted			1,074	416
3. Taxes and other accounts receivable from the State			0	0
4. Other current assets			4,118	41
B. LONG-TERM ASSETS			5,899	2,977
I. Long term account receivable			0	0
1. Long term account receivable from customers			0	0
2. Working capital in affiliates			0	0
3. Long-term inter-company receivable			0	0
4. Other long-term receivable			0	0
5. Provisions for bad debts from customers			0	0
II. Fixed assets			5,143	2,152
1. Tangible assets			5,044	2,152
Historical costs			48,243	44,956
Accumulated depreciation			-43,199	-42,804
2. Financial leasehold assets			0	0
Historical costs			0	0
Accumulated depreciation			0	0
3. Intangible assets			0	0
Initial costs			0	0
Accumulated amortization			0	0
4. Construction-in-progress			99	0
III. Investment property			0	0
Historical costs			0	0
Accumulated depreciation			0	0
IV. Long-term investments			0	0
1. Investments in affiliates			0	0
2. Investments in business concerns and joint ventures			0	0
3. Other long-term investments			0	0
4. Provisions for devaluation of long-term investments			0	0
VI. Other long-term assets			756	825
1. Long-term prepaid expenses			756	0
2. Deferred income tax assets			0	0
3. Other long-term assets			0	825
TOTAL ASSETS			63,710	63,342
LIABILITIES
A- LIABILITIES			23,212	34,320
I. Current liabilities			23,212	34,228
1. Short-term debts and loans			0	0
2. Payable to suppliers			15,862	30,697
3. Advances from customers			328	4
4. Taxes and other obligations to the State Budget			3,466	2,010
5. Payable to employees			2,170	610
6. Accrued expenses			0	0
7. Inter-company payable			0	0
8. Payable according to the progress of construction contracts			0	0
9. Other payable			1,386	907
10. Provisions for short-term accounts payable			0	0
II. Long-Term Liabilities			0	92
1. Long-term accounts payable to suppliers			0	0
2. Long-term inter-company payable			0	0
3. Other long-term payable			0	0
4. Long-term debts and loans			0	92
5. Deferred income tax payable			0	0
6. Provisions for unemployment allowances			0	0
7. Provisions for long-term accounts payable			0	0
B- OWNER'S EQUITY			40,498	29,022
I. Owner's equity			40,258	28,997
1. Capital			15,000	15,000
2. Share premiums			0	0
3. Other sources of capital			0	0
4. Treasury stocks			0	0
5. Differences on asset revaluation			0	0
6. Foreign exchange differences			0	0
7. Business promotion fund			6,910	1,537
8. Financial reserved fund			716	203
9. Other funds			0	0
10.Retained earnings			17,632	12,257
11. Construction investment fund			0	0
II. Other sources and funds			240	25
1. Bonus and welfare funds			240	25
2. Sources of expenditure			0	0
3. Fund to form fixed assets			0	0
TOTAL LIABILITIES AND OWNER'S EQUITY			63,710	63,342
PROFIT & LOSE STATEMENT
Description		FY 2007		FY 2006
Revenue		201,949		205,581
Deductions Items		0		0
Net Revenue		201,949		205,581
Costs of goods sold		181,056		184,174
Gross profit		20,893		21,407
Financial income		771		172
Financial expenses		363		1,478
In which: Loan interest expenses		26
Selling expenses		3,923		2,695
Administrative overheads		6,601		3,446
Net operating profit		10,777		13,960
Other income		2,780		292
Other expenses		49		0
Other profit /(loss)		2,731		292
Total accounting profit before tax		13,508		14,252
Current corporate income tax		1,891		1,995
Deferred corporate income tax		0		0
Profit after tax		11,617		12,257
FINANCIAL FACTORS
Description		2007		2006
Current liquidity ratio		2.49		1.76
Quick Liquidity ratio		1.48		1.00
Inventory circle		7.29		7.02
Average receive period		46.72		31.43
Utilizing Asset Performance		3.17		3.25
Liability/ Total Asset (%)		36.43		54.18
Liability/ Owner's equity (%)		57.32		118.26
EBIT / Total asset (%) ROA		21.24		22.50
EBIT / Owner's equity (%) ROE		33.42		49.11
EBIT / Total revenue (%) NPM		6.70		6.93
Gross Profit / Total revenue (%) GPM		10.35		10.41
PAYMENT HISTORY AND EXPERIENCES
Trade Morality	Relative
Liquidity	Above average
Payment status	Above average
Financial Situation	Fair
Development trend	Above average
Litigation data	No recorded
Bankruptcy	No recorded
Payment Methods	L/C, T/T
Sale Methods	Directly or via agent system

INTERPRETATION ON THE SCORES

DUC GIANG CHEMICAL AND DETERGENT POWDER JOINT STOCK COMPANY was established upon equitization State Owned Company in 2004 under the business registration no. 0103003850 by Planning and Investment Department of Hanoi City. Now, the subject has just increased the registered capital from 15 billion VND to 30 billion VND. State holds share in the subject with 21 percent, the other 79 percent is sold to employees and outside shareholders.

In the past, the subject was the famous brand name in the field of chemical and detergent power in Vietnam market. Recently, with the presence of many strong brands with good advertising strategy and higher quality, the subject is gradually lost its position. It is now ranked at average level in the field.

The subject is specialized in the manufacture and trading in chemical products for domestic - export demand and detergent product with “Duc Giang” brand which is only distributed in domestic market. It imports some kinds of chemicals for manufacture from Korea, Malaysia, Japan, India and also exports some kinds to overseas. But its main market is still domestic one.

In previous time, detergent power with Duc Giang brand is relatively famous with customers, especially with lower and medium income class. Some recent years, many stronger ones such as Omo, Tide, … hold the leading position.

The premises of the subject are large. Beside head office in Hanoi city, the subject has two factories, one in Lao Cai province and the other in Binh Duong province. According to the information we collected, the factory in Lao Cai province will pass to Vietnam Apatit Limited Company in next month and now, it is constructing another factory in Tang Loong Industrial Complex, Lao Cai Province, this factory will complete and put into operation in May 2009.

As can be seen in the financial data above, its finance status is relative and acceptable although has a slight downtrend. Scale of assets seems not much changed while liabilities are reduced and controllable. Revenue is slight down from 205 billion dong in 2006 by 201 billion dong in 2007. Thus, profit is also decreased. This may affected by the changes in economic market. However, its financial ratios are good. It is reliable for small and medium credit.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.48.71
UK Pound	1	Rs.72.85
Euro	1	Rs.64.70

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%)

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions