MIRA INFORM REPORT

Report Date :

30.09.2011

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 :	Specialized in manufacturing and trading chemical 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 :	Satisfactory
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)
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	150,000,000,000 VND
Tax code	5300299830
Total Employees	217
Note:  The subject's current exact name is above.

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/ 3867275/ 3774553/ 2247811
Fax	(84-20) 3867262/ 3867214
Email	photpho4@vnn.vn
Note: The given address is not correct. The right one is above.

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	66,000,000,000 VND
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

DIRECTORS
2. 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: Formerly, the subject’s director was Mr. Nguyen Vi Hoan and Mr. Nguyen Quoc Trung was deputy director. However, Mr. Nguyen Vi Hoan stopped working since May 2011 and the subject’s current director is Mr. Nguyen Quoc Trung.
3. NAME	Mr. HO MANH LINH
Position	Deputy Director
Nationality	Vietnamese
4. NAME	Mr. PHAM VAN HUNG
Position	Deputy Director
Nationality	Vietnamese

BUSINESS NATURE AND ACTIVITIES

The subject is specialized in manufacturing and trading chemical products

IMPORT & EXPORT ACTIVITIES
IMPORT:
· Types of products	Machinery
· Market	China
· Mode of payment	T/T, L/C
EXPORT:
· Types of products	Products
· Market	India, Western Euro
· 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 (HSBC)
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	66,000,000,000 VND
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	92,897,000,000 VND
Percentage	61.93%
2. NAME	391 OTHER SHAREHOLDERS
Number of shares	5,710,300
Value of shares	57,103,000,000 VND
Percentage	38.07%

FINANCIAL DATA
Following financial data is supplied by the subject.
BALANCE SHEET
Unit: One VND
Balance sheet date	31/12/2010	31/12/2009
Number of weeks	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
II. Short-term investments
1. Short-term investments
2. Provisions for devaluation of short-term investments
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
4. Receivable according to the progress of construction
5. Other receivable	945,303,990
6. Provisions for bad debts
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
V. Other Current Assets	5,698,589,356	1,916,486,679
1. Short-term prepaid expenses
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
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
1. Long term account receivable from customers
2. Working capital in affiliates
3. Long-term inter-company receivable
4. Other long-term receivable
5. Provisions for bad debts from customers
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
- Historical costs
- Accumulated depreciation
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
III. Investment property
Historical costs
Accumulated depreciation
IV. Long-term investments
1. Investments in affiliates
2. Investments in business concerns and joint ventures
3. Other long-term investments
4. Provisions for devaluation of long-term investments
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
3. Other long-term assets
VI. Goodwill
1. Goodwill
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
4. Taxes and other obligations to the State Budget	67,280,281
5. Payable to employees	3,086,572,823	339,990,708
6. Accrued expenses	105,690,110	48,923,843
7. Inter-company payable
8. Payable according to the progress of construction contracts
9. Other payable	43,915,305,658	45,474,159,447
10. Provisions for short-term accounts payable
II. Long-Term Liabilities
1. Long-term accounts payable to suppliers
2. Long-term inter-company payable
3. Other long-term payable
4. Long-term debts and loans
5. Deferred income tax payable
6. Provisions for unemployment allowances
7. Provisions for long-term accounts payable
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
3. Other sources of capital
4. Treasury stocks
5. Differences on asset revaluation
6. Foreign exchange differences	-1,060,758,347
7. Business promotion fund	6,745,462,294
8. Financial reserved fund	3,025,241,217
9. Other funds
10. Retained earnings		-5,494,595,856
11. Construction investment fund
II. Other sources and funds	3,759,607,211
1. Bonus and welfare funds	3,759,607,211
2. Sources of expenditure
3. Fund to form fixed assets
MINORITY’S INTEREST
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
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
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
16. Deferred corporate income tax
17. Interest from subsidiaries/related companies
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	Above average
Financial Situation	Above Average
Development trend	Uptrend
Litigation data	No Record
Bankruptcy	No Record
Payment Methods	T/T, L/C
Sale Methods	Retailer and Wholesaler

INTERPRETATION ON THE SCORES

The subject was established in 2009 as a joint stock company and was granted the business registration No. 5300299830 by Lao Cai Department of Planning and Investment. It has head office and factory at Tang Loong Industrial Park - Bao Thang District - Lao Cai Province - Vietnam. Currently, there are 217 employees working for it.

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 experienced years in the chemical products trading industry, so the subject has been received a lot of support and has been inherited traditional partners from the parent company. Current, the subject imports machinery from China. Its products are not only supplied for domestic market but also exported to India and some Western Euro countries.

Financially, in 2009 the subject just went on test producing, so the operation effectiveness was not good. Although it reached over VND 8 billion of revenue but its profit after tax was negative. However, in 2010, its business result was very impressionable. Its total sales soared to over VND 500 billion. Additionally, its ROE was amplified to nearly VND 66 billion.

Besides, in 2010, the subject's operation ratios were better than the average industry. ROA, ROE, NPM and GPM were good. These shows the subject's sales policy worked efficiently and its management capacities also are fair. Liability by total asset and liability by owner equity were lower than the average industry. Moreover, lately, the subject has increased its registered capital to VND 150 billion. Like this, its capital structure is relatively safe and its self-financing is fairly good. However, the subject's liquidity ratios in 2010 were low because the current liabilities were higher than current assets. Thus, the subject's liquidity was not very good.

In general, the subject is considered as a large scale company. Although it is young business, its business activities are effective. It can develop better in the future. Now, it has capacity to meet small-normal transactions.

----------- 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

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.48.93
UK Pound	1	Rs.76.52
Euro	1	Rs.66.65

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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