MIRA INFORM REPORT

Report Date :

16.06.2008

IDENTIFICATION DETAILS

Name :	VIETNAM COTTON JOINT STOCK COMPANY
Registered Office :	Plot I 15-16-17 Str No. D2 , Ward 25, Binh Thanh Dist, Hochiminh City
Country :	Vietnam
Financials (as on) :	31.12.2005
Date of Incorporation :	1993
Com. Reg. No.:	4103007036
Legal Form :	Joint Stock Company
Line of Business :	Growing and Trading in Cotton Processing Cotton Products

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 :	Good
Payment Behaviour :	Regular
Litigation :	Clear

SUBJECT IDENTIFICATION & LEGAL FORM
English Name		VIETNAM COTTON JOINT STOCK COMPANY
Vietnamese name		CONG TY CO PHAN BONG VIET NAM
Abbreviated Name		V.C.C JSC
Founded		1993
Type of Business		Joint stock company
Business Registration No.		4103007036
Date of issuance		June 18^th, 2007
Place of issuance		Planning and Investment Department of Hochiminh City
Registered Capital		50,000,000,000 VND
Tax Code		0301225328
Total Employees		230 employees (including staffs and workers)
Notes: The given name “Cotton Trading Service Enterprise” is branch of the subject. The subject has been re-organized many times. It was officially established since 1993 as a State owned enterprise. It was re-established in 2005 with type of a one-member state liability limited company. In June 2007, the subject was equitized to be joint stock company.
Following are its former identification and legal form:
English Name		VIETNAM COTTON ONE MEMBER OF STATE LIABILITY RESPONSIBILITY COMPANY LIMITED
Former English Name		VIETNAM COTTON COMPANY
Vietnamese name		CONG TY TNHH NHA NUOC MOT THANH VIEN BONG VIET NAM
Former Vietnamese name		CONG TY BONG VIET NAM
Abbreviated Name		VCC. LTD
Founded		1993
Type of Business		One member state liability limited company
Business Registration No.		4104000146
Date of issuance		December 12^th, 2005
Former Business Registration		102855
Date of issuance		July 30^th, 1993
Place of issuance		Planning and Investment Department of Hochiminh City
Registered Capital		38,434,385,462 VND
Former Registered Capital		22,759,597,066 VND
Tax Code		0301225328
ADDRESS
Head Office
Address		Plot I 15-16-17 Str No. D2 , Ward 25, Binh Thanh Dist, Hochiminh City
Country		Vietnam
Tel		(84-8) 899 2668/ 8992667/ 803 5721/ 510 6721
Fax		(84-8) 899 2861
Email		bongvietnam@vnn.vn
COTTON TRADING SERVICE ENTERPRISES
Address		Plot I 15-16-17 Str No. D2 , Ward 25, Binh Thanh Dist, Hochiminh City
Country		Vietnam
Business Registration No.		4113028780
Founded		2000
Tax Code		0301225328-010
Tel		(84-8) 5124319 - 5122774
Fax		(84-8) 5106526
Branch Director		Mr. Pham Quang Thieu
Indent No		024178316
DIRECTORS
1. NAME		Mr. TRAN THANH HUNG
Position		Chairman - General Director
Qualification		Management
Date of birth		February 3^rd, 1963
ID No		024448765
Place of issuance		Police Station of Hochiminh City
Resident		No. 146/4B Xo Viet Nghe Tinh Str, Ward 25, Binh Thanh Dist, Hochiminh City
Nationality		Vietnamese
2. NAME		Mr. BUI CANH HUONG
Position		Vice General Director
Qualification		Management
Resident		Hochiminh City
Nationality		Vietnamese
3. NAME		Mr. TRAN ANH HAO
Position		Vice General Director
Qualification		Management
Resident		Hochiminh City
Nationality		Vietnamese
4. NAME		Mrs. NGUYEN THI MAI
Position		Chief Accountant
Qualification		Bachelor
Resident		Hochiminh City
Nationality		Vietnamese
BUSINESS NATURE AND ACTIVITIES
The subject is specialized in: - Growing and trading in cotton - Processing cotton products - Exporting and importing supplies and equipment use in the cotton industry - Manufacturing and trading in bands and rims, packaging for manufacturing and processing cotton
IMPORT & EXPORT ACTIVITIES
IMPORT: The subject imports materials from China, India, USA
EXPORT: The subject exports products for Europe and America countries
BANKERS
INDUSTRIAL AND COMMERCIAL BANK OF VIETNAM (INCOMBANK) - BRANCH NO. 12
Address		No. 366 Truong Chinh Str, Ward 13, Tan Binh Dist, Hochiminh City, Vietnam
Tel		(84-8) 8462499
Fax		(84-8) 8100087
Swift		ICBVVNVX944
SHAREHOLDERS
The subject is a Joint Stock Company. Following are the shareholders:
1. STATE CAPITAL
Share		55%
Representatives
NAME		Mr. TRAN THANH HUNG
Address		No. 146/4B Xo Viet Nghe Tinh Str, Ward 25, Binh Thanh Dist, Hochiminh City
NAME		Mr. NGUYEN TIEN BINH
Address		No. 1/4 Phan Van Tri Str, Ward 10, Go Vap Dist, Hochiminh City
NAME		Mr. TRAN ANH HAO
Address		No. 188/13 Thong Nhat Str, Phan Rang Town, Ninh Thuan Province
2. NAME		AN HUNG PHAT PESTICIDE CO., LTD
Vietnamese Name		CONG TY TNHH BAO VE THUC VAT AN HUNG PHAT
Address		No. 374 Hong Bang Str, Ward 16, Dist 11, Hochiminh city
Share		6%
3. NAME		HOANG VIET COMPANY LIMITED
Vietnamese Name		CONG TY TNHH HOANG VIET
Address		Group 10, Vinh An Town, Vinh Cu Dist, Dong Nai Province
Share		3%
4. NAME		326 OTHER SHAREHOLDERS
Share		36%
Value		18,000,000,000 VND
FINANCIAL DATA
We tried our best to collect the financial data in recent years but not available.
BALANCE SHEET
Unit: 1,000,000 VND
Balance sheet date			31/12/2005
Number of weeks			52
ASSETS
A -	CURRENT ASSETS		200,810
I.	Cash and cash equivalents		38,891
1.	Cash		38,891
2.	Cash equivalents		0
II.	Short-term investments		8,000
1.	Short-term investments		8,000
2.	Provisions for short-term investment of short- term investments in securities		0
III.	Accounts receivable		132,149
1.	Receivable from customers		35,347
2.	Repayments to suppliers		8,077
3.	Inter- company receivable		28,999
4.	Receivable according to the process of construction contracts		0
5.	Other receivable		66,993
6.	Provisions for credit risk		-7,267
IV.	Inventories		20,029
1.	Inventories		20,745
2.	Provisions for devaluation of inventories		-716
V.	Other current assets		1,741
1.	Short-term repaid expenses		0
2.	Taxes receivable		1,741
3.	Other current assets		0
B -	LONG TERM ASSETS		115,959
I.	Long term accounts receivable		0
1.	Long term accounts receivable from customers		0
2.	Long term inter- company receivable		0
3.	Other long term receivable		0
4.	Provisions for bad debts		0
II.	Fixed assets		54,038
1.	Tangible assets		46,263
	Historical costs		80,965
	Accumulated depreciation		34,702
2.	Financial leasehold assets		0
	Historical costs		0
	Accumulated depreciation		0
3.	In-tangible assets		408
	Historical costs		457
	Accumulated depreciation		49
4.	Construction in progress		7,367
III.	Investment property		0
	History costs		0
	Accumulated depreciation		0
IV.	Long term investments		0
1.	Investments in affiliates		0
2.	Investments in business concerns and joint ventures		0
3.	Other long term investments		0
4.	Provisions for devaluation of investments in securities		0
V.	Other long term assets		47,500
1.	Long term repaid expenses		189
2.	Deferred income tax		0
3.	Other long term assets		47,311
	TOTAL ASSETS		316,769
LIABILITIES
A -	LIABILITIES		280,893
I.	Short term liabilities		149,520
1.	Short term debts and loans		29,160
2.	Payable to suppliers		29,504
3.	Advances from customers		25,508
4.	Taxes and other obligations to the State Budget		1,685
5.	Payable to employees		14,982
6.	Accrued expenses		331
7.	Inter- company payable		28,934
8.	Payable according to the progress of construction contracts		0
9.	Other payables		19,416
II.	Long term liabilities		131,373
1.	Long term account payable to suppliers		0
2.	Long term inter- company payable		0
3.	Other long term payable		0
4.	Long term debts and loans		131,373
5.	Deferred income tax		0
B -	OWNER’S EQUITY		35,876
I.	Owner’s equity		34,566
1.	Capital		29,729
2.	Share premiums		0
3.	Treasury stocks		0
4.	Differences on asset re-valuation		0
5.	Foreign exchange differences		0
6.	Business promotion fund		1,635
7.	Financial reserved fund		344
8.	Other funds		0
9.	Retained earnings		2,858
II.	Other sources and funds		1,310
1.	Bonus and welfare funds		-186
2.	Sources of expenditure		1,496
3.	Funds to form fixed assets		0
	TOTAL LIABLITIES AND OWNER’S EQUITY		316,769
PROFIT & LOSE ACCOUNT (INCOME STATEMENT)
	Description		F/Y 2005
1.	Sales		471,706
2.	Deductions		1,544
3.	Net sales		470,162
4.	Costs of goods sold		443,726
5.	Gross profit		26,436
6.	Financial income		12,495
7.	Financial expenses		9,338
	- In which: Loan interest expenses		0
8.	Selling expenses		6,801
9.	Administrative overheads		22,696
10.	Net operating profit		96
11.	Other income		9,382
12.	Other expenses		4,472
13.	Other profits		4,910
14.	Profit (loss) before tax		5,006
15.	Income tax		719
16.	Profit (loss) after tax		4,287
FINANCIAL FACTORS
Description			FY 2005
Current Liquidity Ratio			1.34
Quick Liquidity Ratio			1.21
Inventory Circle			22.15
Average Receive Period			102.59
Utilizing Asset Performance			1.48
Liability / Total Asset (%)			88.67
Liability / Owner's Equity (%)			782.96
Income Before Tax / Total Asset (%) ROA			1.58
Income Before Tax / Owner's Equity (%) ROE			13.95
Income Before Tax / Total Revenue (%) NPM			1.06
Gross Profit / Total Revenue (%) GPM			5.60
PAYMENT HISTORY AND EXPERIENCES
Trade Morality		Good
Liquidity		Fairly good
Payment Status		Fairly prompt
Financial Situation		Fairly Good
Development trend		Fairly Good
Litigation data		No Recorded
Bankruptcy		No Recorded
Payment Methods		Direct payment or through its corresponding bank. Foreign remittance by letter of credit (L/C) and DA term.
Sale Methods		Direct to Clients
INTERPRETATION ON THE SCORES
Formerly, the subject was a State owned company under Vietnam Textile and Garment Corporation (VINATEX). It was officially established in 1993. On October 26^th, 2005 the subject has transformed to one-member state liability limited company under the name Vietnam Cotton One Member of State Responsibility Company Limited. Until June 2007, the subject was equitized to be joint stock company. The State now takes 55% share of the enterprise and the rest one is held by the strategic investors and employees. The subject is now specialized in growing and trading in cotton; processing cotton products; exporting and importing supplies and equipment used in the cotton industry; manufacturing and trading in bands and rims, packaging for manufacturing and processing cotton. The subject imported materials from China, India and USA. The subject has exported products to Europe and USA market. The subject is one of the relative big companies in this field in Vietnam now. Its registered capital is 50 billion VND. The total employees at currently is a bout 230. Its market share is remarkable. The subject has plans to increase productivity and competition capacity of cotton, expand area to advantage regions, promoting in general business to support for producing in cotton and effect rising in production and business operation. The subject conducted two pilot cotton-growing projects in Binh Duong province and Dong Nai Processing Factory in Dong Nai province as part of efforts to expand cotton cultivation nationwide. The premises and facilities of the subject are standard. Current financial status is relative good. Generally, the subject has prospect of future development. The subject expects profit in 2008 will be 7,680 million VND and 2009 about 8,150 million VND.
The Subject has capacity to meet this credit inquiry with close term.

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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