MIRA INFORM REPORT

Report Date :

02.12.2011

IDENTIFICATION DETAILS

Name :	DUCGIANG - LAO CAI CHEMICAL JOINT STOCK COMPANY
Registered Office :	Tang Loong Industrial Park, Bao Thang District, Lao Cai Province
Country :	Vietnam
Financials (as on) :	31.12.2010
Date of Incorporation :	15.04.2009
Com. Reg. No.:	5300299830
Legal Form :	Joint Stock Company
Line of Business :	Specializing in manufacturing and trading chemical products.
No. of Employees :	250

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 :	No Complaints
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 – September 30, 2011

Country Name	Previous Rating (30.06.2011)	Current Rating (30.09.2011)
Viet Nam	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
Registered English Name	DUCGIANG - LAO CAI CHEMICAL JOINT STOCK COMPANY
Registered Vietnamese Name	CONG TY CO PHAN HOA CHAT DUC GIANG - LAO CAI
Registered short name	DLC
Type of Business	Joint stock company
Year Established	2009
Business Registration No.	5300299830
Date of Registration	15 Apr 2009
Place of Registration	Lao Cai Planning and Investment Department
Current registered capital	VND 150,000,000,000
Status	Unlisted
Tax code	5300299830
Total Employees	250
Size	Medium

Historical Identification & Legal form

List	Changed Items	Date of changes
1	Subject has got former Registered capital: VND 100 billion Changed to: VND 150 billion	13 May 2011

ADDRESSES

Head Office
Address	Tang Loong Industrial Park, Bao Thang District, Lao Cai Province, Vietnam
Telephone	(84-20) 3774556
Fax	(84-20) 3867214

SUBSIDIARIES AND RELATED COMPANIES

1. PARENT COMPANY - DUCGIANG CHEMICAL AND DETERGENT POWDER JOINT STOCK COMPANY
Business Registration	0103003850
Date of Registration	05 Mar 2004
Place of Registration	Hanoi Department of Planning and Investment
Registered Capital	VND 66,000,000,000
Tax code	0101452588
Address	No. 18, Lane 44, Duc Giang Str., Thuong Thanh Ward, Long Bien District, Ha Noi City, Vietnam
Tel	(84-4) 38271620
Fax	(84-4) 38271068
Website	http://www.ducgiangchem.vn

DIRECTORS

1. NAME	Mr. NGUYEN QUOC TRUNG
Position	Director
Date of Birth	18 Dec 1971
ID Number/Passport	125449967
ID Issue Date	16 Jun 2008
ID Issue Place	Bac Ninh Police Department
Resident	Quarter II, Dong Nguyen Ward, Tu Son District, Bac Ninh Province, Vietnam
Nationality	Vietnamese
Note: Former director of the subject was Mr. Nguyen Vi Hoan. He stopped working since May 2011. Currently, the subject's director is Mr. Nguyen Quoc Trung.
2. NAME	Mr. HO MANH LINH
Position	Deputy Director
Nationality	Vietnamese
3. NAME	Mr. PHAM VAN HUNG
Position	Deputy Director
Nationality	Vietnamese

BUSINESS NATURE AND ACTIVITIES

The subject is specializing in manufacturing and trading chemical products.

IMPORT & EXPORT ACTIVITIES

IMPORT:
· Types of products	Machinery, equipment and materials
· Market	China
· Mode of payment	T/T, L/C
EXPORT:
· Types of products	Products
· Market	India, Japan, Korea and some EU countries
· Mode of payment	T/T, L/C

BANKERS

1. VIETNAM TECHNOLOGICAL AND COMMERCIAL JOINT STOCK BANK LAO CAI BRANCH
Address	No.10 Hoang Lien, Lao Cai District, Lao Cai Province, Vietnam
Telephone	(84-20) 3822 595
Fax	(84-20) 3822 598
2. HONG KONG & SHANGHAI BANKING CORP LTD
Address	Pacific Place, 83B Ly Thuong Kiet Str., Hoan Kiem District, Ha Noi City, Vietnam
Telephone	(84-4) 39333189
Fax	(84-4) 39460207
3. ASIA COMMERCIAL BANK HOANG CAU TRANSACTION
Address	6-7-8 Hoang Cau Area, O Cho Dua Ward, Dong Da District, Ha Noi City, Vietnam
Telephone	(84-4) 35379736
Fax	(84-4) 35379739

SHAREHOLDERS

1. NAME	DUCGIANG CHEMICAL AND DETERGENT POWDER JOINT STOCK COMPANY
Business Registration	0103003850
Date of Registration	05 Mar 2004
Place of Registration	Hanoi Department of Planning and Investment
Registered Capital	VND 66,000,000,000
Tax code	0101452588
Address	No. 18, Lane 44, Duc Giang Str., Thuong Thanh Ward, Long Bien District, Ha Noi City, Vietnam
Tel	(84-4) 38271620
Fax	(84-4) 38271068
Number of shares	9,289,700
Value of shares	VND 92,897,000,000
Percentage	61.93%
2. NAME	391 OTHER SHAREHOLDERS
Number of shares	5,710,300
Value of shares	VND 57,103,000,000
Percentage	38.07%

FINANCIAL DATA

BALANCE SHEET
Unit: One VND
Balance sheet date	31/12/2010	31/12/2009
Number of weeks	52	52
ASSETS
A – CURRENT ASSETS	98,867,501,821	33,445,118,202
I. Cash and cash equivalents	8,229,644,859	290,634,170
1. Cash	8,229,644,859	290,634,170
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	46,075,453,690	109,200,000
1. Receivable from customers	32,900,786,880	13,200,000
2. Prepayments to suppliers	12,229,362,820	96,000,000
3. Inter-company receivable	0	0
4. Receivable according to the progress of construction	0	0
5. Other receivable	945,303,990	0
6. Provisions for bad debts	0	0
IV. Inventories	38,863,813,916	31,128,797,353
1. Inventories	38,863,813,916	31,128,797,353
2. Provisions for devaluation of inventories	0	0
V. Other Current Assets	5,698,589,356	1,916,486,679
1. Short-term prepaid expenses	0	0
2. VAT to be deducted	4,931,421,466	1,913,486,679
3. Taxes and other accounts receivable from the State	325,000,000	0
4. Other current assets	442,167,890	3,000,000
B. LONG-TERM ASSETS	138,552,924,841	127,557,001,302
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	137,470,264,256	125,671,463,162
1. Tangible assets	86,663,116,365	98,992,383,821
- Historical costs	107,698,707,352	100,685,764,647
- Accumulated depreciation	-21,035,590,987	-1,693,380,826
2. Financial leasehold assets	0	0
- Historical costs	0	0
- Accumulated depreciation	0	0
3. Intangible assets	26,123,794,838	26,679,079,341
- Initial costs	27,094,540,635	27,094,540,635
- Accumulated amortization	-970,745,797	-415,461,294
4. Construction-in-progress	24,683,353,053	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	1,082,660,585	1,885,538,140
1. Long-term prepaid expenses	1,082,660,585	1,885,538,140
2. Deferred income tax assets	0	0
3. Other long-term assets	0	0
VI. Goodwill	0	0
1. Goodwill	0	0
TOTAL ASSETS	237,420,426,662	161,002,119,504
LIABILITIES
A- LIABILITIES	124,950,874,287	66,496,715,360
I. Current liabilities	124,950,874,287	66,496,715,360
1. Short-term debts and loans	22,863,193,592	13,197,649,331
2. Payable to suppliers	54,912,831,823	7,435,992,031
3. Advances from customers	0	0
4. Taxes and other obligations to the State Budget	67,280,281	0
5. Payable to employees	3,086,572,823	339,990,708
6. Accrued expenses	105,690,110	48,923,843
7. Inter-company payable	0	0
8. Payable according to the progress of construction contracts	0	0
9. Other payable	43,915,305,658	45,474,159,447
10. Provisions for short-term accounts payable	0	0
II. Long-Term Liabilities	0	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	0	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	112,469,552,375	94,505,404,144
I. OWNER’S EQUITY	108,709,945,164	94,505,404,144
1. Capital	100,000,000,000	100,000,000,000
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	-1,060,758,347	0
7. Business promotion fund	6,745,462,294	0
8. Financial reserved fund	3,025,241,217	0
9. Other funds	0	0
10. Retained earnings	0	-5,494,595,856
11. Construction investment fund	0	0
II. Other sources and funds	3,759,607,211	0
1. Bonus and welfare funds	3,759,607,211	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	237,420,426,662	161,002,119,504

PROFIT & LOSS STATEMENT
Description	FY2010	FY2009
1. Total Sale	500,443,316,845	8,396,007,997
2. Deduction item	0	0
3. Net revenue	500,443,316,845	8,396,007,997
4. Costs of goods sold	401,710,950,271	15,280,832,953
5. Gross profit	98,732,366,574	-6,884,824,956
6. Financial income	1,407,443,260	4,400,731
7. Financial expenses	4,690,239,296	349,444,246
- In which: Loan interest expenses	2,683,452,381	321,665,196
8. Selling expenses	16,113,351,440	0
9. Administrative overheads	6,311,011,584	2,853,589,600
10. Net operating profit	73,025,207,514	-10,083,458,071
11. Other income	55,122,884	4,656,162,215
12. Other expenses	335,447,909	67,300,000
13. Other profit /(loss)	-280,325,025	4,588,862,215
14. Total accounting profit before tax	72,744,882,489	-5,494,595,856
15. Current corporate income tax	6,745,462,294	0
16. Deferred corporate income tax	0	0
17. Interest from subsidiaries/related companies	0	0
18. Profit after tax	65,999,420,195	-5,494,595,856

FINANCIAL RATIOS AND AVERAGE INDUSTRY RATIOS
Description	FY2010	FY2009	Average Industry
Current liquidity ratio	0.79	0.50	1.98
Quick liquidity ratio	0.48	0.03	1.14
Inventory circle	11.48	0.49	4.57
Average receive period	33.61	4.75	74.01
Utilizing asset performance	2.11	0.05	1.52
Liability by total asset	52.63	41.30	56.31
Liability by owner equity	111.10	70.36	172.82
Ebit / Total asset (ROA)	31.77	-3.21	11.85
Ebit / Owner's equity (ROE)	67.07	-5.47	32.44
Ebit / Total revenue (NPM)	15.07	-61.61	7.81
Gross profit / Total revenue (GPM)	19.73	-82.00	21.11
Note: The Average Industry was calculated by Vietnam Credit based on our owned statistical data

PAYMENT HISTORY & PERFORMANCE EXPERIENCES

Trade Morality	Fair
Liquidity	Low/Medium
Payment status	Normal
Financial Situation	Above Average
Development trend	Developing
Litigation data	No Record
Bankruptcy	No Record
Payment Methods	T/T, L/C
Sale Methods	Retailer and Wholesaler
Public opinion	Well-known

INTERPRETATION ON THE SCORES

The subject is a joint stock company. It was established in 2009 according to the business registration No. 5300299830 granted by Lao Cai Department of Planning and Investment with registered capital VND 100 billion. On May 2011, the subject has increased its registered to VND 150 billion.

Head office and factory of the subject is locating at Tang Loong Industrial Park, Bao Thang District, Lao Cai Province, Vietnam with 250 employees working.

The subject is specialized in manufacturing and trading chemical products, mainly yellow phosphorus. As a member of DUCGIANG CHEMICAL AND DETERGENT POWDER JOINT STOCK COMPANY which has many experience years in the chemical products trading industry, so the subject has been received a lot of support and inherited traditional partners from the parent company. Current, the subject imports machinery, equipment and materials from China. Its products are supplied for domestic market and exported to India, Japan, Korea and some EU countries.

Financially, the subject just went on test producing in 2009, so the operation effect was not good. Although revenues reached VND 8 billion but profit after tax was negative. However, business result has changed significantly in 2010. This was showed by total sale VND 500 billion and nearly VND 66 billion of profit. Operation ratios were better than average industry. ROA, ROE, NPM and GPM were fairly good. However, the subject's liquidity ratios were low because the current liabilities were higher than current assets. Thus, the subject's liquidity was not very good.

According to Mr. Tuan - Accountant of the subject, for 9 first months of 2011, the subject has achieved VND 565 billion of revenues and VND 70 billion of profit, these values are higher than 2010. This proves business operation of the subject is developing.

In general, the subject is a medium company in the industry and it is on the way of development. Although it is a newly established company but its business activities are effective. Now, it has capacity to meet small and normal transactions.

------------ APPENDIXES----------

INDUSTRY DATA
Industry code	Growth speed by price compared with 1994 (%)		Total enterprises 2009		Total employees 2010 (Thous.pers.)	Annual average capital of enterprises 2009 (billion dongs)
	2010	2009
Agriculture, Forestry and Fishing	2.78	1.82	8,749		23,896.3	81,559
Industry and Construction	7.70	5.52	85,115		10,630	2,751,975
Trade and Services	7.52	6.63	154,978		14,522	4,939,069
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			72.2	57.1		62.7
Imports			84.8	69.9		80.7
Trade Balance			-12.6	-12.8		-18

Source: General Statistics Office

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.51.65
UK Pound	1	Rs.81.06
Euro	1	Rs.69.51

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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