MIRA INFORM REPORT

Report Date :

19.08.2011

IDENTIFICATION DETAILS

Name :	MINH CHAU INVESTMENT AND SERVICE CO LTD
Registered Office :	No 21 Trinh Hoai Duc Street - Dong Da District - Ha Noi City
Country :	Vietnam
Financials (as on) :	31.12.2010
Date of Incorporation :	16.10.2009
Com. Reg. No.:	0102037609
Legal Form :	Limited Liability Company
Line of Business :	Trading materials and chemicals

RATING & COMMENTS

MIRA’s Rating :

B

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Status :	Moderate
Payment Behaviour :	Usually Correct
Litigation :	Clear

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – March 31^st, 2011

Country Name	Previous Rating (31.12.2010)	Current Rating (31.03.2011)
Vietnam	b1	b1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

SUBJECT IDENTIFICATION & LEGAL FORM

Current legal status
English Name	MINH CHAU INVESTMENT AND SERVICE CO LTD
Vietnamese Name	CONG TY TNHH DICH VU VA DAU TU MINH CHAU
Short name	MINH CHAU INSER CO., LTD
Type of Business	Limited liability company
Year Established	2009
Business Registration No.	0102037609
Date of Registration	16 Oct 2009
Place of Registration	Ha Noi Department of Planning and Investment
Current registered capital	6,000,000,000 VND
Status	Unlisted
Tax code	0103453530
Total Employees	10

Historical Identification & Legal form

List	Changed Items	Date of changes
1	Subject has got former Registered capital: 2 billion on 25th February 2009 Changed to: 6 billion	16 Oct 2009

company ADDRESSES

Head Office
Address	No 21 Trinh Hoai Duc Street - Dong Da District - Ha Noi City - Vietnam
Telephone	(84-4) 22116474
Fax	(84-4) 37349338
Email	minhchau24@fpt.vn
Website	www.chongthamminhchau.cm

DIRECTORS

1. NAME	Mr. BUI NGOC TU
Position	Director
Date of Birth	19 Feb 1961
ID Number/Passport	160015535
ID Issue Date	06 Mar 1998
ID Issue Place	Police Station of Nam Dinh
Current resident	Doi Can - Ba Dinh District - Ha Noi City - Vietnam
Nationality	Vietnamese
Tel/Mobil phone	(84) 983 532 888
Qualification	Bachelor of Ha Noi University of Science and Technology
2. NAME	Mr. TRAN THI QUYNH NGA
Position	Deputy Director
Nationality	Vietnamese
3. NAME	Mr. PHAM THI NGOAN
Position	Chief Accountant
Nationality	Vietnamese

BUSINESS NATURE AND ACTIVITIES

The subject is specified in several fields:
- Trading materials and chemicals
- Trading building materials
- Handling and waterproofing of building constructions
- Counseling and employment services
- Import and export of commodities the company trades
- Trading telecommunication services and equipments serving for printing, painting, mechanics
- Air ticket agent

IMPORT & EXPORT ACTIVITIES

IMPORT:
· Types of products	Chemicals and copernit waterproofing sheets
· Market	India and Italy
· Mode of payment	L/C, T/T
EXPORT:
Note: The subject company does not export directly

BANKERS

1. VIETNAM JOINT STOCK COMMERCIAL BANK FOR INDUSTRY AND TRADE
Address	No. 108 Tran Hung Dao Str. - Hoan Kiem District - Ha Noi City - Vietnam
Telephone	(84-4) 39421030 / 39421036 / 39421037/ 3942 1158
Fax	(84-4) 3942 1032
2. VIETNAM TECHNOLOGICAL AND COMMERCIAL JOINT STOCK BANK
Address	No.96 Dinh Cong Phuong Liet Ward - Thanh Xuan District - Ha Noi City - Vietnam
Telephone	(84-4) 3665 8516
Fax	(84-4) 3665 8518
3. SOUTHEAST ASIA JOINT STOCK BANK
Address	No.25 Tran Hung Dao - Hoan Kiem District - Ha Noi City - Vietnam
Telephone	(84-04) 3944 8688
Fax	(84-04) 3944 8958

SHAREHOLDERS

1. NAME	Mr. BUI NGOC TU
Position	Director
Date of Birth	19 Feb 1961
ID Number/Passport	160015535
Issued on	06 Mar 1998
Issued Place	Police Stattion of Nam Dinh
Current Resident	Doi Can - Ba Dinh District - Ha Noi City - Vietnam
Mobile phone	(84) 983 532 888
Nationality	Vietnamese
Value of shares	5,100,000,000 VND
Percentage	85%
2. NAME	Mr. NGUYEN VAN MINH
ID Number/Passport	011250774
Nationality	Vietnamese
Value of shares	900,000,000 VND
Percentage	15%

FINANCIAL DATA

BALANCE SHEET
Unit: One VND
Balance sheet date	31/12/2010	31/12/2009
Number of weeks	52	-
ASSETS
A – CURRENT ASSETS	6,705,969,058	2,325,353,295
I. Cash and cash equivalents	2,033,855,199	817,568,218
1. Cash	2,033,855,199	0
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	1,821,133,365	747,037,368
1. Receivable from customers	1,363,561,543	747,037,368
2. Prepayments to suppliers	377,836,000	0
3. Inter-company receivable	0	0
4. Receivable according to the progress of construction	0	0
5. Other receivable	79,735,822	0
6. Provisions for bad debts	0	0
IV. Inventories	2,615,085,847	730,729,184
1. Inventories	2,615,085,847	730,729,184
2. Provisions for devaluation of inventories	0	0
V. Other Current Assets	235,894,647	30,018,525
1. Short-term prepaid expenses	0	0
2. VAT to be deducted	2,494,365	16,321,976
3. Taxes and other accounts receivable from the State	0	0
4. Other current assets	233,400,282	13,696,549
B. LONG-TERM ASSETS	637,726,981	57,242,060
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	637,726,981	57,242,060
1. Tangible assets	637,726,981	57,242,060
- Historical costs	738,832,959	71,780,232
- Accumulated depreciation	-101,105,978	-14,538,172
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	0	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
V. Other long-term assets	0	0
1. Long-term prepaid expenses	0	0
2. Deferred income tax assets	0	0
3. Other long-term assets	0	0
VI. Goodwill	0	0
1. Goodwill	0	0
TOTAL ASSETS	7,343,696,039	2,382,595,355
LIABILITIES
A- LIABILITIES	1,413,510,706	408,439,575
I. Current liabilities	1,136,427,371	408,439,575
1. Short-term debts and loans	0	0
2. Payable to suppliers	905,506,476	408,439,575
3. Advances from customers	132,647,000	0
4. Taxes and other obligations to the State Budget	98,273,895	0
5. Payable to employees	0	0
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	0	0
10. Provisions for short-term accounts payable	0	0
II. Long-Term Liabilities	277,083,335	0
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	277,083,335	0
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	5,930,185,333	1,974,155,780
I. OWNER’S EQUITY	5,930,185,333	1,974,155,780
1. Capital	6,000,000,000	2,000,000,000
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	0	0
8. Financial reserved fund	0	0
9. Other funds	0	0
10. Retained earnings	-69,814,667	-25,844,220
11. Construction investment fund	0	0
II. Other sources and funds	0	0
1. Bonus and welfare funds	0	0
2. Sources of expenditure	0	0
3. Fund to form fixed assets	0	0
MINORITY’S INTEREST	0	0
TOTAL LIABILITIES AND OWNER’S EQUITY	7,343,696,039	2,382,595,355

PROFIT & LOSS STATEMENT
Description	FY2010	FY2009
1. Total Sale	8,041,326,392	2,424,373,083
2. Deduction item	0	0
3. Net Sale	8,041,326,392	2,424,373,083
4. Costs of goods sold	6,323,258,870	1,852,466,880
5. Gross profit	1,718,067,522	571,906,203
6. Financial income	2,814,641	705,483
7. Financial expenses	206,941,725	99,719,879
- In which: Loan interest expenses	23,367,698	0
8. Selling expenses	0	0
9. Administrative overheads	1,557,910,885	498,736,027
10. Net operating profit	-43,970,447	-25,844,220
11. Other income	0	0
12. Other expenses	0	0
13. Other profit /(loss)	0	0
14. Total accounting profit before tax	-43,970,447	-25,844,220
15. Current corporate income tax	0	0
16. Deferred corporate income tax	0	0
17. Interest from subsidiaries/related companies	0	0
18. Profit after tax	-43,970,447	-25,844,220

FINANCIAL RATIOS AND AVERAGE INDUSTRY RATIOS
Description	FY2010	FY2009	Average Industry
Current liquidity ratio	5.90	5.69	1.98
Quick liquidity ratio	3.60	3.90	1.14
Inventory circle	3.78	2.54	4.57
Average receive period	82.66	112.47	74.01
Utilizing asset performance	1.10	1.02	1.52
Liability by total asset	19.25	17.14	56.31
Liability by owner equity	23.84	20.69	172.82
Ebit / Total asset (ROA)	-0.28	-1.08	11.85
Ebit / Owner's equity (ROE)	-0.35	-1.31	32.44
Ebit / Total Sale (NPM)	-0.26	-1.07	7.81
Gross profit / Total Sale (GPM)	21.37	23.59	21.11
Note: The Average Industry was calculated by Vietnam Credit based on our owned statistical data

PAYMENT HISTORY & PERFORMANCE EXPERIENCES

Trade Morality	Normal
Liquidity	Medium/High
Payment status	Above average
Financial Situation	Average
Development trend	Positive
Litigation data	No Record
Bankruptcy	No Record
Payment Methods	L/C, T/T
Sale Methods	Wholesaler

INTERPRETATION ON THE SCORES

MINH CHAU INVESTMENT AND SERVICE CO LTD was founded in 2009 and it has been operating under Business Registration No 0102037609 and tax code 0103453530. At the beginning, the registered capital of the company was 3 billion; however, due to the demand of expanding production, the firm increased its capital to 6 billion on 16th October 2009. Currently, there are officially 10 staffs working for the business; nevertheless, the amount of workers will reach to nearly 30 when the firm hires more employees for the installation in the constructions. The director of the subject - Bui Ngoc Tu and all staffs of the subject graduated from Ha Noi University of Science and Technology, thus they have good knowledge about the chemicals products.

The subject has one head office that is located at No 21, Trinh Hoai Duc Street, Dong Da District, Ha Noi City, Viet Nam. The firm has been operating in two fields: chemicals for paper industry and waterproofing. Through my visit and direct conversation with Ms. Ngoan – chief accountant, it is showed that the subject hires two floors of five-floor building to use as a head office. The first floor the subject retails some waterproofing products and sells air tickets as air ticket agent. The second floor contains accounting and business department. The firm imports chemicals, waterproofing products from India, Italy and stores chemicals in a warehouse in Bac Ninh. Afterward, the subject distributes those products directly to some factories, for instance, Thanh Dat Paper Factory, Thanh Dung Paper Factory, Truc Bach Paper Factory and My Huong Paper Factory.

In term of finance, the company has high liquidity condition. As can be seen, the current and quick liquidity ratios of the firm are greater than 1 and much higher than the average industry index. Thus, the company has enough short-term assets to meet the short-term payment. The company is in quite safe condition because the debt ratio and liability by owner equity ratio are smaller than the average industry index, even both ratios in 2010 increased more than in 2009. This can be explained that over two years, the subject used amount of loans which took small amount in the total assets as well as owner’s equity. Moreover, due to in 2010, the company received more contracts from the customers, so the company needed more capital to import the chemicals, which makes the firm used more loans, especially long term loans.

In contrast with the liquidity situation and debt usage, the subject’s profitability ratios are not good in 2009 together with 2010. Although GPM of the firm are higher than the average industry, ROE, ROA and NPM are negative. The reason is that the administration expenses tripled in 2010 in comparison with 2009, which makes the profit after tax of the business in 2010 is minus figures.

To sum up, over the first two years of operation, even though the profit of the firm is not positive, it is operating following the uptrend. The subject maybe has ability to meet the small financial obligation but there is necessary caution.

APPENDIXES

INDUSTRY DATA
Industry code	Growth speed (%)		Total employees 2009 (Thousand)		Total enterprises	Annual average capital of enterprises
	Predict 2010	2009
Agriculture, Forestry and Fishing	2.8	3.0	24,788.5		2,399	50,530
Trade and Services	7.5	11	10,517.9		79,181	1,754,973
Construction	7	11.3	2,692.8		17,783	248,268
Manufacturing	12	7.6	7,591.2		30,786	967,068
ECONOMIC INDICATORS
			2010	2009		2008
Population (Million person)			86.93	86.02		86.1
Gross Domestic Products (US$ billion)			102.2	91		84.9
GDP Growth (%)			6.78	5.32		6.2
GDP Per Capita (US$)			1,160	1,080		1,040
Inflation (% Change in Composite CPI)			11.75	6.88		24.4
SERVICE TRADE PERFORMANCE
Billion USD			2010	2009		2008
Exports			71.6	56.6		62.9
Imports			84	68.8		76.6
Trade Balance			-12.4	-12.2		-14.6

Bottom of Form

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.45.61
UK Pound	1	Rs.75.32
Euro	1	Rs.65.68

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	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
----	NB	New Business	----

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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This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.